1. Publication and Implementation of the Amended Arbitration Act
The amended Arbitration Act was published as Act No. 14176 on May 29, 2016, and will be implemented starting on November 30, 2016. The purpose of the amendments to the Arbitration Act is to expand and promote the arbitration system by securing quick and effective arbitral awards, and there have been considerable amendments to the provisions regarding the scope of arbitration, the form of arbitration agreements, arbitrator selection, interim measure, cost of arbitration, and delay interest, etc. The major contents of the amended Arbitration Act are as below:
2. Summary of the Major Amendments
(1) Expansion of the Scope of Arbitration
The scope of arbitration in the amended Arbitration Act has been expanded from "dispute in private law" to "any property dispute and non-property dispute which may be resolved by the parties' reconciliation" (Article 3(1)).
(2) Relaxation of the Form of Arbitration Agreement
The amended Arbitration Act has expanded the circumstances in and methods through which an arbitration agreement can be acknowledged as being valid, by relaxing the existing "in writing" requirement for an arbitration agreement and recognizing any instances in which an arbitration agreement is recorded regardless of its form (Article 8(3)).
(3) Challenge of the Arbitral Tribunal's Decision Regarding Its Jurisdiction
In order to resolve the unreasonableness of having no other option than litigation to challenge the arbitral tribunal's decision on lack of jurisdiction under the current system, the amended Arbitration Act allows for requesting the court's review on jurisdiction within 30 days from the date of arbitral tribunal's decision on the existence or lack of jurisdiction (Article 17(6) and (9)).
(4) Expansion of the Arbitral Tribunal's Authority for Granting and Enforcing interim measure
There was a complete amendment to the interim measure provision under the current system. The amended Arbitration Act reflects Article 17 of the UNCITRAL Model Law and includes various types of interim measures and makes such interim measures enforceable. Specifically, it expanded the scope of interim measures and stipulates that an interim measure can be not just in the form of a decision but also in the form of an arbitral award, thereby making it possible to request the court for approval/enforcement decision (Article 18 to Article 18(8)). It is expected that the likelihood of utilizing interim measure by arbitral tribunal in the future will increase.
(5) Expansion of Court's Cooperation in Examination of Evidence
While the current law only stipulates the circumstance in which the arbitral tribunal requests the court for examination of evidence, the amended Arbitration Act expands such circumstances to include when the arbitral tribunal on its own authority or based on request from a party can request the court for examination of evidence or request the court for its cooperation in relation to the examination of evidence. As a result, it is now possible for the court to participate in the examination of evidence by directly conducting such examination or in the way of cooperation (for instance, the court's ordering the witness to appear before the arbitral tribunal or for the document holder to produce the relevant documents to the arbitral tribunal) (Article 28).
(6) New Provisions for the Basis of Arbitration Costs and Delay Interests
As the current law does not contain any provision dealing with arbitration costs, there was a need to include the grounds and principles based on which the arbitral tribunal can decide on the allocation of arbitration costs. Therefore, the amended Arbitration Act includes a provision that would allow the arbitral tribunal to consider all the facts of the arbitration in deciding how to allocate the arbitration costs, if the parties did not agree otherwise (Article 34(2)).
Moreover, As the current law does not contain provisions for delay interest, the amended Arbitration Act includes a provision that would allow the arbitral tribunal to order the payment of appropriate delay interests after consideration all the facts (Article 34(3)).
(7) Change in the Process of Approval/Enforcement of Arbitral Awards
The current law requires the trial for approval/enforcement of arbitral award to be a process for obtaining the court's judgment, and for submission of a duly authenticated or duly certified copies of both the original award of the arbitral tribunal and the arbitration agreement. In an effort to simplify and to accelerate the approval/enforcement process, the amended Arbitration Act has simplifies the document submission requirement. As a result, the amended Arbitration Act has changed the enforcement process from one that requires court's judgment to court's order (however, in the process for obtaining an order a hearing or alternatively a trial must be set ), and the documents that must be submitted have been changed to the original or copy of the arbitral award (Article 37).
3. Effect of the Amendments Bolster the Use of Arbitration by Ensuring Speed and Effectiveness
In order to bolster the use of arbitration, the amended Arbitration Act has expanded the scope of arbitrable disputes, simplified the requirements for an arbitration agreement, specified the definition, requirements, and process for interim measures that reflect the UNCITRAL Model Laws in order to ensure speed and effectiveness of arbitration, permitted the court's to enforce such interim measures, and made it possible for arbitral awards to be enforced through the process of court's order rather than that of a judgment. As the Ministry of Justice that led the efforts in amending the Arbitration Act explained, we expect that the arbitration system will be bolstered as a result of these amendments.