I. PROCEDURAL BACKGROUND
I. On 30 August 2022, the Tribunal rendered its Award in LSF-KEB Holdings SCA and others v. Republic of Korea (ICSID Case No. ARB/12/37) (the "Award"), together with Judge Brower's Concurring Opinion and Professor Stern's Dissenting Opinion.
2. On 14 October 2022, pursuant to Article 49(2) of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the "ICSID Convention") and Rule 49 of the Rules of Procedure for Arbitration Proceedings (2006) (the "ICSID Arbitration Rules"), the Republic of Korea ("Korea" or the "Respondent") submitted a Request for Rectification ofthe Award (the "Rectification Request"), together with Legal Authorities RA-381 through RA-385, 1 to the ICSID Secretary-General.
3. Article 49(2) of the IC SID Convention provides as follows :
(2) The Tribunal upon the request of a party made within 45 days after the date on which the award was rendered may after notice to the other party decide any question which it had omitted to decide in the award, and shall rectify any clerical, arithmetical or similar error in the award. Its decision shall become part of the award and shall be notified to the parties in the same manner as the award. The periods oftime providedfor under paragraph (2) ofArticle 51 and paragraph (2) ofArticle 52 shall run.from the date on which the decision was rendered. (Emphasis added)
4. Korea asked the Tribunal to "rectify and amend" the Award by:
a. modifying the final sentence ofAwardfootnote 184 to state that "the Claimant's requested damages are USD 433 million, a figure that includes interest from 24 May 2011 to 30 September 2013," not "the Claimants damages are USD 433 million, a figure that includes interest from 24 May 2011 to 30 September 2011 ";
b. indicating that the total loss resulting from the Hana transaction was USD 432,037,364, not USD 433,000,000; and
c. indicating that the principal amount ofdamages incurred by Claimant as of 3 December 2011 was USD 216,018,682, not USD 216,500,000.2
5. Korea also requested that Judge Brower's Concurring Opinion be modified to substitute "USD 432,037,364" instead of "USD 433 million" as the principal sum. 3
6. On 19 October 2022, the IC SID Secretary-General registered the Rectification Request and notified the Parties and the Tribunal of its registration pursuant to Rule 49(2) of the ICSID Arbitration Rules. 4
7. In accordance with ICSID Arbitration Rule 49(3), on 21 October 2022 the Tribunal fixed a schedule for the Parties to file additional rounds of observations on the Rectification Request.
8. Pursuant to the Tribunal's schedule, on 21 November 2022, LSF-KEB Holdings SCA, LSF SLF Holdings SCA, HL Holdings SCA, Kukdong Holdings I SCA, Kukdong Holdings II SCA, Star Holdings SCA, Lone Star Capital Management SPRL and Lone Star Capital Investments S. ar. I. (the "Claimants") filed a response to the Rectification Request (the "Claimants' Response"). As part oftheir prayer for relief, the Claimants "request[ed] that the Tribunal rectify the 'mismatch' error identified by [the] Respondent, but do so completely [...]" by also modifying all of the relevant exchange rate calculations.
Specifically, the Claimants ask[ed] the Tribunal by way of Counter-Request to:
- Rectify the Award to reflect that, upon application ofthe correct exchange rate as calculated on the date of the relevant agreement, the US. Dollar value ofthe price set in the July 2011 SPA was USD 4.168 billion;
- Rectify the Award to reflect that, upon application ofthe correct exchange rate as calculated on the date of the relevant agreement, the US. Dollar value of the price set in the December 2011 SPA was USD 3.461 billion; and
- Rectify the Award to reflect that, once the errors above are rectified, the pre-interest value of Claimants' loss, as assessed on December 3, 2011, is USD 706.8 million (prior to any reduction for contributory fault). 5 (Emphasis added)
9. The Claimants also asked that Judge Brower's Concurring Opinion be updated to use "USD 706.8 million" instead of "USD 433 million."6
10. On 29 November 2022, the Respondent applied to have the Claimants' Response declared inadmissible as unresponsive to the question before the Tribunal (the "Respondent's Application"). On 2 December 2022, the Claimants filed an opposition to the Respondent's Application to strike their Response which was accompanied by Legal Authorities CA-866 and CA-867.
11. On 20 January 2023, the Tribunal issued its "Decision on the Respondent's Application,"
ordering that certain portions of the Claimants' Response be struck out and inviting the Claimants to redact or resubmit a revised Response to the Rectification Request on or before 30 January 2023. The Tribunal also amended the schedule for the Parties' second round of pleadings on the Rectification Request.
12. In particular, in its Decision the Tribunal noted:
(i) The Claimants' "alternative solution" to the Request for Rectification was untimely, and therefore inadmissible, unless it could be admitted as a valid response to the error raised by the Respondent. 7 It was therefore necessary to define the precise "error" in the Award sought to be addressed by the Respondent's Request for Rectification "in relation to the computation of interest"; 8
(ii) Both Parties agreed that the Tribunal had made a "clerical arithmetical or similar error in the Award" within the scope ofICSID Convention Article 49(2);
(iii) The Tribunal was therefore required (TCSID Convention Article 49(2) uses the term "shall") to consider adjustments to the interest calculation to update Professor - interest calculations to 3 December 2011 being the "Date of Injury"; 9
(iv) However, the Tribunal did not agree with the Claimants that the Respondent had requested whatever modifications were necessary to correct the alleged "misalignment" between the Tribunal's reasoning and its award of damages. In the Tribunal's view, the Respondent had clearly sought only rectification of the interest component of an award stated in U.S. Dollars; 10
(v) The Respondent's request made no reference to exchange rates and in the Tribunal's view, foreign currency exchange rates constituted an allegation of an entirely different "clerical, arithmetical or similar error" in the Award not raised by the Respondent's request for an interest correction; 11
(vi) Accordingly, the Claimants were not entitled under the guise of a "response" to raise an entirely new complaint about foreign currency exchange issues that were not part of the Respondent's request and that ought to have been raised by the Claimants, if pursued at all, as an independent request for rectification under Article 49(2) of the ICSID Convention, which had not been done; 12
(vii) The Claimants' Response was therefore struck from the record to the extent that it sought to raise foreign exchange issues rather than observations on the Respondent's request to rectify the alleged erroneous interest calculation; 13 and
(viii) The Claimants were invited to resubmit their Response on or before 30 January 2023 either in a redacted format or by way of a fresh document. 14
13. On 30 January 2023, the Claimants filed a Revised Response to Korea's Rectification Request (the "Claimants' Revised Response") in which they "insisted" (their choice of word) that despite the strike-out, the Tribunal address and resolve their foreign exchange rate arguments:
[The] Claimants insist that Respondent's proposed rectifications will leave uncorrected significant errors caused when the Tribunal relied in the Award on calculations that did not reflect the Tribunal 's own reasoning in the Award, as identified (albeit only in part) in Respondent's Request. 15 (Emphasis added)
14. On 2 February 2023, the Respondent requested the Tribunal to declare the Claimants' Revised Response inadmissible and "order Claimants again to submit a revised response limited to observations on Korea's submissions concerning interest on the US Dollar- denominated damages computation in the Award and eliminating any request that the Tribunal rectify purported errors in foreign currency exchange rates." The Claimants filed observations opposing this request on 3 February 2023.
15. On 7 February 2023, the Tribunal informed the Parties that it saw "no compelling need to strike out" the Claimants' Revised Response as "it will only be considered insofar as the content deals with the interest question raised by the Respondent." The Tribunal then invited the Respondent to reply to the Claimants' Revised Response by 21 February 2023.
16. On 14 February 2023, the Respondent notified the Tribunal that it would not be filing a reply to the Claimants' Revised Response and requested that the Tribunal proceed to issue a ruling on Korea's Rectification Request.
17. Further to the Tribunal's 11 April 2023 request, on 18 April 2023, the Parties presented their Submissions on Costs (the "Claimants' Cost Submission" and the "Respondent's Cost Submission"). 16
18. On 1 May 2023, the Tribunal declared the proceedings closed pursuant to ICSID Arbitration Rules 49(4) and 46.
60. For the reasons set out above, the Tribunal grants the Respondent's request for rectification of the Award by:
a) Modifying the final sentence of Award footnote 184 to state that "the Claimant's requested damages are USD 433 million, a figure that includes interest from 24 May 2011 to 30 September 2013," not "the Claimants damages are USD 433 million, a figure that includes interest from 24 May 2011 to 30 September 2011; "
b) Providing that the total loss resulting from the Hana transaction was USD 432,037,364, not USD 433,000,000;
c) Providing that the principal amount of damages due Claimant LSF-KEB Holdings SCA as of 3 December 2011 was USD 216,018,682, not USD 216,500,000; and
d) Amending the text of the Award as more specifically provided in Appendix A.
61. The Tribunal orders the Claimants to pay USD 53,779.05 and KRW 2,659,500 to the Respondent plus interest, compounded annually at the average one-year U.S. Treasury rate, from the date of this Decision on Rectification to the date of payment.