（株）KSP (英文名称：KSP Co., Ltd.) v. 抚顺中兴重工有限公司

At a glance

Parties

(株)KSP / KSP Co., Ltd. (Korea) v. 抚顺中兴重工有限公司 (Fushun Zhongxing Heavy Industry Co., Ltd., formerly STX 重工（抚顺）有限公司)

Case no.

(2020)辽04民再7号 (retrial); original ruling (2019)辽04外协认13号

Court

Liaoning Fushun Intermediate People's Court (辽宁省抚顺市中级人民法院)

Underlying award(s)

Korean Commercial Arbitration Board (大韩商事仲裁院) Award No. 17113-0030 of 2 July 2019

Treaty

New York Convention, Articles IV and V

Sector

Heavy industry; investment by way of loan

Outcome

The court first recognised the Korean award (12 November 2019). On retrial it set that ruling aside (25 March 2020) because it lacked jurisdiction over foreign-related arbitration review cases.

Amount

Award: KRW 25,000,000,000 plus interest, and arbitration costs of KRW 126,795,000. Court application fee of RMB 400: first charged to the respondent, then refunded to KSP on retrial.

The dispute

On 8 January 2014 the Korean company KSP Co., Ltd. signed an Investment Contract as investor with STX 重工（抚顺）有限公司 (now Fushun Zhongxing Heavy Industry Co., Ltd.) and 株式会社 STX. Under the contract KSP transferred KRW 25,000,000,000 to the Fushun company. KSP started arbitration before the Korean Commercial Arbitration Board on 17 August 2017. The Fushun company took no part. On 2 July 2019 the Board ordered it to repay KRW 25,000,000,000 with interest and to pay KRW 126,795,000 in arbitration costs. KSP then applied in Fushun for recognition and enforcement under the New York Convention. The Fushun company admitted receiving the money but argued that it was an investment, not a loan: after the first transfer, KSP had reconstituted the board, appointed the chairman and taken over management until early 2017. The company admitted receiving the arbitration notices and the award, and explained that it did not attend because both KSP and STX were running the company.

Key holdings

1. The court found that it had jurisdiction under Article 283 of the Civil Procedure Law, because the respondent's domicile and main assets were within its district. KSP's originals of the award and the Investment Contract, with Chinese translations certified by a Chinese consulate, met Article IV of the Convention. 2019 Ruling, p. 3
2. There was no ground to refuse recognition under Article V(1)(b). The Board had sent the notice of arbitration by express mail and later served the arbitration materials, and the respondent had confirmed receipt. The award was recognised, and KSP could apply separately for enforcement once the ruling took effect. 2019 Ruling, p. 4
3. On retrial, the court held that it had no jurisdiction even though both parties argued that it did. Under Article 2(10) of the Supreme People's Court Notice Fa [2017] No. 359, arbitration judicial review cases go to the foreign-related trial divisions or specialised panels. Under Article 3 of the Liaoning High People's Court Notice on adjusting jurisdiction over foreign-related civil and commercial cases, those cases are heard only by the designated courts. 2020 Retrial Ruling, pp. 3–4
4. The court set aside its ruling (2019)辽04外协认13号 and refunded the RMB 400 application fee to KSP. The retrial ruling is final. 2020 Retrial Ruling, p. 4

Procedural history

1. 8 January 2014KSP, STX 重工（抚顺）有限公司 and 株式会社 STX sign the Investment Contract.
2. 17 August 2017KSP files its request for arbitration with the Korean Commercial Arbitration Board.
3. 2 July 2019The Board issues Award No. 17113-0030 against the Fushun company.
4. 27 August 2019The Fushun Intermediate Court registers KSP's application for recognition and enforcement.
5. 12 November 2019The court recognises the award.
6. 10 December 2019KSP applies, as a creditor, for bankruptcy liquidation of the Fushun company.
7. 22 January 2020By ruling (2020)辽04民监1号, the court orders a retrial of the 2019 ruling and suspends its enforcement.
8. 25 March 2020Retrial ruling: the 2019 recognition ruling is set aside for lack of jurisdiction.

Tribunal, counsel and experts

For the claimant

北京市中伦律师事务所

For the respondent

In-house (company employee)

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Keywords

• New York Convention
• recognition and enforcement
• Article V(1)(b)
• proper notice
• Article IV documents
• Korean Commercial Arbitration Board
• KCAB
• China
• Korea
• retrial
• jurisdiction
• centralised jurisdiction
• foreign-related arbitration review
• Fa [2017] No. 359
• STX
• loan or investment
• bankruptcy liquidation

Summary generated with AI from the published documents — refer to the award for the authoritative text.