New rules set to boost South Korea’s reputation in international arbitration

The Korea Commercial Arbitration Board International Arbitration Centre (KCAB International) revised its International Arbitration Rules, which took effect on 1 January 2026 (the ‘2026 Rules’). This marks the first comprehensive update since 2016 and is aimed at enhancing efficiency and transparency in international arbitration. The 2026 Rules introduce a number of notable changes that are expected to make proceedings more efficient, flexible and cost-effective, and boost transparency in the overall arbitration process.

• Read more: international arbitration developments and trends for 2025-26

KCAB International also announced the establishment of the International Arbitration Court, which will be responsible for key procedural decisions, including the appointment and challenge of arbitrators, decisions on joinder before the constitution of the tribunal and other significant matters. Major institutions such as the Singapore International Arbitration Centre (SIAC), the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA) have similar systems. This development represents an important step toward strengthening institutional independence and creating a more structured and transparent approach to case management.

The 2026 Rules

The 2026 Rules include several notable changes to the draft rules that were published for public consultation in 2025.

There are a number of measures that embrace technological advances to save time and enhance the cost-effective conduct of the proceedings. These include express adoption of electronic processes, so requests for arbitration can now be submitted electronically. By agreeing to arbitration under the rules, parties are deemed to have consented to receive and accept service of the request electronically. The rules also expressly allow for hearings to be conducted in hybrid or virtual formats, with the arbitral tribunal having discretion to determine the mode of hearing. This digital shift is expected to streamline communication and make participation more accessible.

Procedural flexibility has also been improved in the 2026 Rules, which allow the tribunal to respond more effectively to the needs of each case. The tribunal now has the authority to extend time limits for submissions beyond 45 days without requiring party agreement, which is a change from the draft rules. The Secretary-General or the Court may also extend time limits on their own initiative if necessary.

The expedited, fast-track and emergency arbitrator procedures have also been revised to promote efficiency. The expedited procedure now applies automatically unless parties opt out or the Secretary-General of KCAB International determines that it is inappropriate in the circumstances, and introduces dual monetary thresholds: KRW 500 million (approx. US$340,000) for agreements concluded before 1 January 2026; and KRW 4 billion for those concluded on or after. For the expedited procedure, the tribunal is required to hold a case management conference within 15 days of receiving the file, with limited scope for extension by the Secretary-General.

The fast-track procedure automatically applies where the disputed amount does not exceed KRW 500 million or where the parties agree, unless the arbitration agreement was concluded before 1 January 2026, the parties have opted out, or the Secretary‑General of KCAB International determines that the procedure is incompatible or inappropriate. A case management conference must be held within seven days of file transmission. The 2026 Rules also require a sole arbitrator to be appointed for fast-track procedures unless the court deems it appropriate to appoint three.

In emergency arbitrator proceedings, the emergency arbitrator’s decision may now take the form of an order or interim award and is immediately enforceable.

The updated approach to consolidation and early determination reflects KCAB International’s effort to simplify complex proceedings and provide clearer guidance on dismissing unsustainable claims. Under the 2026 Rules, the court may now consolidate arbitrations where the arbitration agreements are compatible and the disputes arise from the same legal relationship. References to “transactional relationships” and ancillary contracts present in the draft rules have been removed, thereby narrowing the grounds for consolidation. The standard for early determination has also shifted from a focus on whether a claim or defence is manifestly outside the tribunal’s jurisdiction, to whether the claim or defence is manifestly unsustainable. The time limit for making an order or award on early determination is now “as soon as practicable”, rather than within a fixed period.

The new rules also update provisions to promote transparency in the arbitration process. Parties are now required to promptly inform the secretariat, tribunal and other parties of any third-party funding arrangements, or as soon as practicable after the arrangement is concluded, and to notify any changes to the funding arrangement or funder.

Prospective arbitrators must submit statements of availability, impartiality and independence, and disclose any circumstances that may raise reasonable doubts about their impartiality or independence prior to appointment. This requirement, maintained from the draft rules, is expected to reinforce the integrity of the tribunal and maintain confidence in the arbitration process.

Pro-arbitration approach of the Korean courts

In its judgment, Case No. 2024Da243172 (in Korean) rendered in January 2025, the Korean Supreme Court upheld the validity of an arbitration agreement despite drafting deficiencies, thereby affirming its pro-arbitration stance. The court reiterated that contract interpretation should go beyond literal wording to reflect the parties’ true intent, even when the contract is drafted in multiple languages with differences in content. If terms are unclear, the text serves as the starting point, but any agreed meaning takes precedence. In case of dispute, interpretation must consider the contract’s form and content, the circumstances and purpose of its formation, the parties’ genuine intent, and commercial practices, applying logic, experience and common sense. These principles apply to contracts with multiple language versions or mixed languages, unless the parties agreed that one language would be primary.

The Supreme Court held that minor defects, such as ambiguous wording or naming a non-existent institution, do not automatically invalidate the parties’ arbitration agreement as long as the intent to arbitrate is clear. It also noted that the absence of language expressly excluding litigation does not, by itself, indicate that the parties intended to resolve disputes through litigation alongside arbitration.

Potential increase of energy disputes in South Korea

A surge in renewable energy projects has translated into a growing number of disputes worldwide. These disputes often involve multi-party contracts, cross-border supply chains and complex regulatory frameworks, making arbitration the preferred dispute resolution mechanism for this type of energy project. 

South Korea continues to invest heavily in renewable energy – especially offshore wind – and in February 2025 the National Assembly of the Republic of Korea passed the Special Act on the Promotion of Offshore Wind Power and Industrial Development (OWP Promotion Act) to provide a legal framework for offshore wind development. The act is tipped to accelerate offshore wind development in the country by streamlining site selection and permitting processes. The extent to which this act will make Korea a hub for renewable energy projects or propel South Korea’s status as a preferred forum for resolving such disputes through international arbitration remains to be seen.