In recent years, Korea has become an increasingly important venue for arbitration. In 2005, the Korean Commercial Arbitration Board (KCAB) handled 213 arbitration cases (including 53 international arbitrations, which is almost three times the number it handled in 1995). In line with this growth, the KCAB has enacted a new set of arbitration rules designed specifically for use in international arbitrations (New Rules). Prior to the enactment of the New Rules, the same set of rules was used for both international and domestic arbitrations, even though the requirements for either type of arbitration are not always the same.
The New Rules are designed to give greater autonomy to arbitrating parties, to help expedite arbitration proceedings and to enhance the ability of the KCAB to handle international arbitration cases. They came into effect on 1 February 2007, and apply to international arbitrations where parties agree to resolve their disputes through the New Rules. Where no such agreement exists, the pre-existing arbitration rules will apply unless all of the parties agree otherwise.
Noteworthy provisions include:
- Number of arbitrators: Unless parties agree otherwise, a sole arbitrator will be appointed. However, the KCAB Secretariat may, upon request by one of the parties, appoint three arbitrators, having taken into consideration the size, complexity and nature of the case. This contrasts with the previous arrangement where the number of arbitrators was based on the amount in dispute.
- International Arbitration Committee (IAC): The KCAB will establish an IAC to deal with the challenges faced by arbitrators and the conduct in arbitration proceedings. The purpose of this new feature is to bring KCAB practice more closely in line with that of other leading international institutions.
- Parties to share any advance costs: Parties now pay an equal share of the deposit on arbitration costs, which is an improvement over the previous position, which mandated that the claimant would bear the entire deposit on arbitration costs in advance