Korea has now revised its Arbitration Act, with amendment taking effect on November 30, 2016. The revised Arbitration Act applies to all arbitrations seated in Korea. Significantly, the revised Arbitration Act also coincides with the new International Arbitration Rules and new Code of Ethics for Arbitrators adopted by the Korean Commercial Arbitration Board (KCAB) effective June 1, 2016. Along with the new KCAB Rules and the Code of Ethics, the revised Arbitration Act further modernizes the legal framework for arbitration in Korea and fosters an even more arbitration-friendly environment.

The revised Arbitration Act closely follows the 2006 UNCITRAL Model Law on International Commercial Arbitration, even more faithfully than the previous Arbitration Act had followed the 1985 UNCITRAL Model Law. Several of the most significant changes in the revised Arbitration Act are highlighted below.

Adoption of Option I alleviating the "writing requirement" for arbitration agreements

The revised Arbitration Act adopts Option I of Article 7 of the 2006 UNCITRAL Model Law. Similar to the previous Arbitration Act, the revised Arbitration Act provides that an arbitration agreement need not be in writing, as long as it is possible to confirm later through written records that there was an arbitration agreement between the parties. Further, the language of the revised Arbitration Act more closely follows the language of the 2006 Model Law than did the previous Arbitration Act with respect to the 1985 Model Law. It is anticipated the new wording will be more familiar and more clear, therefore, to non-Korean parties and international counsel.

Interim Measures by a Tribunal

The revised Arbitration Act also adopts the 2006 UNCITRAL Model Law regime on interim measures, including its section on enforceability. As with the Option I writing requirement noted above, the language of the revised Arbitration Act on interim measures also follows the 2006 Model Law. In fact, Korea is now one of the few countries that closely adhere to the Model Law's enforcement regime for interim measures. But there are two notable differences between the revised Arbitration Act and the Model Law's interim measures regime: (i) only interim measures issued in arbitrations seated in Korea may be enforced by Korean courts; and (ii) provision for preliminary orders (which do not exist within the Korean legal system) is not included in the revised Arbitration Act.

Court assistance in respect to the taking of evidence

Prior to the revised Arbitration Act, an arbitral tribunal could either take evidence on its own, or alternatively, the tribunal could (ex officio or upon application of the parties) entrust the court with the taking of evidence. The revised Arbitration Act, on the other hand, has broadened the alternatives slightly. That is, under the revised Arbitration Act, the court may also be involved in a more focused manner to simply assist the tribunal in taking evidence. Rather than limiting the court to either taking the evidence itself and sending records of the evidence to the tribunal (as provided under the previous Arbitration Act), or doing nothing while the tribunal takes the evidence on its own, now the court may provide assistance to the tribunal by ordering witnesses to appear before the tribunal or document holders to submit requested documents to the tribunal. This important amendment in the revised Arbitration Act allows a means of interim relief to the parties and the tribunal that was previously unavailable, and it allows the tribunal much greater control and direction over taking evidence.

Simplification of recognition and enforcement of arbitral awards

The process of recognition and enforcement of arbitral awards under the revised Arbitration Act will now be carried out through issuance of an order, providing greater assurance to parties and their counsel that enforcement proceedings will be concluded in an expeditious manner. The previous Arbitration Act had provided for recognition and enforcement of arbitral awards through entry of a judgment. While it is anticipated the new process will be simpler and more efficient under the revised Arbitration Act, the court will still formally hear all parties before issuing an enforcement order.

In contrast to the process of issuing an order to recognize and enforce an arbitral award, however, the revised Arbitration Act still provides that awards may only be set aside by a judgment. This distinction reflects the perspective that a court should not easily set aside an award, and it must even more carefully review the reasons for such an action beforehand.

Implications of the Revised Arbitration Act

It is envisioned that the revisions made to the Korean Arbitration Act will help establish Korea as a leader among a growing number of countries that seek to distinguish themselves in the field of international arbitration. Indeed, these revisions - especially together with significant strengthening of the overall arbitration regime by KCAB and others in Korea - will significantly strengthen Korea's role as an international arbitration hub in Northeast Asia as well as an important civil law based arbitration hub in the Asia-Pacific Region.