SEOUL, September 30 (AJP) - An international arbitration tribunal has thrown out a 770 billion won ($545.7 million) claim that an Iranian family brought against South Korea over late payment of an earlier award, the Ministry of Justice said Wednesday, adding to a string of government wins in high-stakes investment disputes.
The case grew out of a collapsed takeover.
In 2010, the Dayyani family, which controls Iranian appliance and petrochemical group Entekhab, agreed to buy struggling South Korean appliance maker Daewoo Electronics and paid a 57.8 billion won deposit.
Creditors canceled the deal the following year and kept the deposit.
The family challenged the forfeiture through investor-state dispute settlement, an arbitration process that lets foreign investors sue host governments for alleged treaty breaches, and won in 2018.
South Korea was ordered to pay about 73 billion won plus interest, but U.S. sanctions on Iran held up the payment. In October 2021, the family filed a second claim arguing that the delay violated the bilateral investment treaty between the two countries.
The tribunal unanimously rejected that claim on Sept. 28. It ordered the family to pay about 4 billion won, or 75 percent of South Korea's legal costs, along with about 800 million won in arbitration expenses.
The claim initially sought about 1.26 trillion won before the family reduced it to roughly 770 billion won.
The tribunal found the delay justified. Under U.S. sanctions, the payment first needed approval from the U.S. Treasury Department's Office of Foreign Assets Control, which enforces those sanctions. The tribunal also rejected the family's argument that the process discriminated against Iranian investors.
South Korea eventually paid about 62.2 billion won of the 85.8 billion won it owed and deposited the remaining 23.6 billion won under a domestic court order.
The ruling is the latest in a run of investor-state dispute settlement (ISDS) victories for South Korea.
In November 2025, the government won an annulment proceeding against U.S. private equity firm Lone Star Funds, erasing about 400 billion won in liability tied to its sale of Korea Exchange Bank. In February, a British court sided with South Korea in its challenge to a roughly 160 billion won award won by U.S. hedge fund Elliott Management and sent the case back to arbitration.
In March, South Korea defeated a 325 billion won claim from Swiss elevator maker Schindler and recovered about 9.6 billion won in legal costs. That award became final this week after Schindler let the deadline pass without seeking to set it aside in a Paris court.
Earlier this month, South Korea also won an annulment proceeding brought by Chinese investor Min Fengzhen, upholding a 2024 ruling that rejected his claim of about 264.1 billion won.
The Entekhab link, the 57.8 billion won deposit, the 2011 cancellation and the October 2021 filing were not in the junior's copy. They come from Korean media coverage of the ministry briefing, so check them against the release before publishing.
AJP Takeaways
- Korea defeated the Dayyani family's 770 billion won second ISDS claim.
- The tribunal ordered the claimants to pay about 4.8 billion won in legal and arbitration costs.
- The ruling follows favorable outcomes involving Lone Star, Elliott, Schindler and Fengzhen Min.
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