South Korea Triumphs in Schindler ISDS Case: What This Means for Future Investments

The government defeated Swiss elevator company Schindler Holding AG in an investor–state dispute (ISDS).

Justice Minister Jeong Seong-ho told reporters at a briefing at the Government Complex in Seoul on the 14th that “at approximately 2:03 a.m. today, the arbitral tribunal of the Permanent Court of Arbitration (PCA) dismissed all of Schindler’s claims.”

Under the ruling, Schindler’s claim for about 320 billion KRW (approximately $240 million) was entirely rejected. The government is also expected to recover about 9.6 billion KRW (approximately $7.2 million) in legal costs it incurred.

Jeong emphasized, “The Republic of Korea achieved a complete victory.”

The dispute began in 2018 when Schindler filed an ISDS case against the South Korean government. Schindler argued it suffered losses because the government neglected its investigation and supervisory duties during Hyundai Elevator’s paid-in capital increase and the transfer of call options carried out between 2013 and 2015.

At the time, Schindler — then the second-largest shareholder of Hyundai Elevator — said the capital increase was aimed primarily at securing funds to preserve control over affiliates such as Hyundai Merchant Marine, rather than addressing legitimate business needs.

Schindler claimed regulators failed to properly exercise their authority, causing at least 259 million Swiss francs (about 500 billion KRW, approximately $375 million). During arbitration, Schindler adjusted its final damages claim to roughly 320 billion KRW (approximately $240 million).

However, the tribunal found that the Korean government’s actions were within its lawful authority and had been subject to adequate investigation and review. It concluded that South Korea did not violate its investment agreement and has no state responsibility under international law.

Jeong said, “Following the Lone Star and Elliott cases, this victory further demonstrates the government’s strong ISDS defense capabilities on the international stage. We will continue to mobilize all available resources to respond to investor–state disputes, prevent capital outflows and protect national interests.”

Reporter Hong Seung-pyo sphong@viva100.com