Study on the features and development trends of the commercial arbitral institution in Korea

Abstract

Even though given recent trends of rapidly increasing caseloads and expanding interest of arbitration, it seems that ADR in the area of commercial activities may not be yet fully institutionalized in Korea. Because Korea has a status as the seventh biggest export country in the world, with a population of 48 million people and relatively low reported caseload in arbitration and mediation for commercial disputes, In order for Korea to join in a line of leading countries in international commercial arbitration, it needs to overcome the following weaknesses to run a successful arbitration management by the KCAB. First of all, the expertise of arbitrators and their training have to be reinforced. Even though Korea has many industrial experts in various fields, a majority of arbitrators are constituted by lawyers and professors who seem not to be familiar with the arbitration system and short on industrial practical expertise. The Korean arbitration system run by the KCAB was established for political reasons to meet the new demands under the increasing transactional environment. That is why the Korean government has given financial support for all or part of its necessary expense for the KCAB under the Korean Arbitration Act. The financial assistance seems to support the KCAB in performing a public service without any concern for bankruptcy. However this financial support may bring out an unnecessary misapprehension that the government participates in private arbitral proceedings as well as undermining the KCAB's independence financially. Also, the KCAB establishes or amends its rules, which they should be obtained by the approval of the Chief Justice of the Supreme Court. It can also undermine its independence administratively. So the KCAB has an effort to reinforce its financial independence and the relevant provisions in its rules have to be revised by itself. Finally, mediation has been increased its status as one of the most important ADR methods in Korea. But only a few of staff numbers in KCAB oversee mediation cases with free of charges. They are not independent professional mediators and cannot deal with every business field disputes effectively. Therefore, the KCAB has also the responsibility to recruit and train mediators who would be available for disputants who need them, just like arbitrators.