Private equity fund (PEF) operator IMM Private Equity (PE) claimed that the domestic court approved the International Chamber of Commerce (ICC) ruling, which states that Shin Chang-jae, chairman and CEO of Kyobo Life Insurance, has an obligation to fulfill the put option, thus Shin must carry out the put option according to the shareholder agreement.
IMM PE distributed a press release on the 3rd, stating, “The ICC arbitration tribunal clearly recognized that Chairman Shin must appoint an appraiser and submit a valuation report according to the shareholder agreement, and since the court approved this, Chairman Shin must submit the valuation report and ultimately fulfill the put option.”
Last month, the Seoul Central District Court's Civil Division 20 approved the ICC ruling, which stated that Chairman Shin must appoint an appraiser and submit a valuation report according to the shareholder agreement in the case involving the dispute over the put option of Kyobo Life Insurance raised by IMM PE and others. It permitted enforcement in Korea if Chairman Shin fails to appoint an appraiser.
However, the court did not recognize the part of the ICC arbitration ruling regarding indirect coercive fines. The ICC arbitration tribunal ruled that if Chairman Shin fails to submit the valuation report for Kyobo Life Insurance, he could be fined $200,000 daily, but the judges did not approve this part, stating that indirect fines must be imposed by Korean courts.
In this regard, IMM PE noted, “Since the court found that indirect coercion can be imposed on Chairman Shin, there should be no hindrance to enforcement against him,” but added, “This ruling, which states that the arbitration tribunal has no authority for indirect coercion, clearly contradicts Supreme Court precedents, and we have filed an immediate appeal.”
Additionally, they stated, “Ultimately, the court's decision acknowledges the central issue of the ICC arbitration ruling regarding Chairman Shin's violation of the shareholder agreement and the obligation to carry out the put option procedures, and we believe it will not have a significant impact on this dispute,” and they added that a swift progression of the put option procedures is expected.