Seoul hires legal advisers as U.S. Coupang investors move toward arbitration

SEOUL, March 05 (AJP) -South Korea has recruited legal advisers to respond to a notice of intent to arbitrate filed by U.S. investors in e-commerce giant Coupang, the Ministry of Justice said Thursday, marking the first formal step in a potential investor–state dispute under the Korea–U.S. Free Trade Agreement.

The ministry said it selected South Korean law firm Peter & Kim and U.S.-based Arnold & Porter Kaye Scholer LLP to represent the government during the initial phase of the dispute. 

Officials said the firms were chosen for their experience in international investment arbitration, including their previous representation of South Korea in the high-profile dispute with U.S. private equity firm Lone Star over the sale of Korea Exchange Bank.

The legal teams will assist the ministry during the 90-day “cooling-off period” that follows a notice of intent under the Korea–U.S. Free Trade Agreement (KORUS FTA), during which the parties may attempt consultations before formal arbitration can be filed. 

The dispute was triggered after Greenoaks Capital Partners LLC and Altimeter Capital Management LP, U.S. investment firms holding shares in Coupang, submitted a notice of intent to arbitrate on Jan. 22. 

The investors argue that South Korea’s regulatory and political response to a major personal data leak at Coupang violated protections for foreign investors under the bilateral trade agreement.

In the notice, the investors claim Seoul’s actions amounted to “discriminatory, disproportionate, and pretextual” measures against the company and damaged U.S. investments worth billions of dollars.

The filing states that the investors collectively hold more than $1.5 billion worth of Coupang shares, and alleges that government actions — including investigations and regulatory measures following the data breach — threaten further losses.

The dispute centers on a cybersecurity incident disclosed by Coupang in November 2025 involving the leak of over 30 million customer accounts. The breach sparked a wave of regulatory probes, parliamentary hearings and public criticism from Korean officials. 

Coupang, founded in 2010 and dubbed as the “Amazon of Korea,” operates primarily in South Korea but is incorporated in Delaware and listed on the New York Stock Exchange. Its shareholder base is dominated by U.S. investors, placing the case within the scope of the investment protections contained in the KORUS FTA. 

Under the treaty’s investor–state dispute settlement provisions, foreign investors can seek damages through international arbitration if they believe government actions violated treaty obligations such as fair and equitable treatment or protection from expropriation. 

Additional notices of intent were filed in February by other investors, including Foxhaven Capital GP LLC, Durable Capital Associates LLC and Abrams Capital LLC, expanding the group of claimants considering arbitration. 

The Justice Ministry said its international investment dispute response team will work with the appointed advisers to review the claims and prepare the government’s response during the consultation period. 

If arbitration proceeds, the case could become one of South Korea’s most closely watched investment disputes since the long-running Lone Star case, which tested the country’s defenses under international investment treaties.