Asiana Airlines has ultimately lost its lawsuit against Gate Gourmet Korea (GGK) regarding unpaid payments. With the ruling confirmed that Asiana Airlines must pay GGK 43.2 billion won in outstanding amounts and interest, the payment dispute between the two companies has come to a close.
However, the legal battle to nullify the catering supply contract with GGK, which is valid until 2048, is still ongoing. Asiana Airlines was acquired by Korean Air last year and aims for a chemical merger in 2027, but the integration of catering services remains uncertain.
According to the aviation industry and others on the 11th, the Supreme Court (Civil Division 1) dismissed the appeal filed by Asiana Airlines regarding the approval and enforcement of the arbitration ruling related to GGK on the 7th. The related case has come to an end approximately six years after the payment dispute arose in 2019.
The case arose when GGK applied for arbitration at the International Chamber of Commerce (ICC) in Singapore in 2019, claiming that Asiana Airlines did not pay settlement fees due to differences in the computation of catering sales prices. The ICC ordered Asiana Airlines to pay 42 billion won in 2021. Asiana Airlines did not accept this, and GGK filed lawsuits in domestic courts and U.S. courts.
The U.S. District Court for the Central District of California issued a ruling for the enforcement of unpaid amounts totaling $52.26 million, and Asiana Airlines concluded the case by paying GGK 58.1 billion won in arbitration award and delay interest in July last year. Despite the Seoul High Court dismissing an appeal in a related domestic case in October last year, Asiana Airlines filed another appeal. The company intended to recover the funds paid if the final judgment from the domestic court differed from that of the U.S. court. However, the Supreme Court dismissed the appeal, concluding the matter.
Although the payment dispute with GGK has concluded following Asiana Airlines' loss, conflicts regarding the catering supply contract between the two companies are ongoing. GGK is a company formed through a partnership between Asiana Airport and Swiss catering supplier Gate Gourmet Switzerland (GGS), which is a subsidiary of China's Hainan Airlines Group. It acquired exclusive rights to supply catering to Asiana Airlines for 30 years starting from 2018 for 133.3 billion won. Asiana Airlines has filed a lawsuit to nullify the supply contract, stating that it involves wrongful actions by former Kumho Asiana Chairman Park Sam-koo.
Former Chairman Park has been indicted for allegations of unfairly supporting affiliates with high family equity stakes by transferring the exclusive catering rights of Asiana Airlines at a low price and, in return, allowing him to acquire convertible bonds from Kumho Express. He was sentenced to 10 years in prison in the first trial, and the prosecution demanded the same sentence in the second trial.
Korean Air, which acquired Asiana Airlines, plans to launch the integrated Korean Air in 2027, but the integration of catering services is uncertain. Korean Air's catering is handled by Korean Air C&D. An Asiana Airlines representative said, 'It is difficult to disclose detailed information as the first trial is ongoing.'