The International Court of Arbitration (ICC) has just issued a 122 page opinion awarding $64 million to client Olympus Capital, a leading U.S. private equity firm specializing in the Asian market. The case involved two motions and discovery hearings in London, followed by a two-week arbitration trial in Singapore in November 2010. An eminent three-member tribunal found Lone Star Funds and Korea Exchange Bank jointly liable for tortious conduct under Korean law in forcing Olympus Capital to sell its stake in KEB's credit card subsidiary to Lone Star at an artificially low price. The tribunal agreed that Olympus Capital had been treated unfairly and that Lone Star and KEB took advantage of Olympus's distress, and set aside the parties' share purchase agreement (which included Olympus' earlier release of Lone Star and KEB from liability). The Tribunal awarded Olympus Capital economic damages and, as the prevailing party, its full legal costs as well.
The arbitration involved unusually fierce battles over whether the Olympus Capital/Lone Star share purchase agreement (including its release provision) should be set aside, and over the scope of document discovery that Lone Star and KEB would be required to provide to Olympus Capital. On both issues, Olympus Capital prevailed, which led to its victory in the arbitration.
"The award is significant, as it shows that even in the rough and tumble world of private equity and corporate acquisitions, there are minimum rules of business conduct that will be enforced," said Cedric Chao, Morrison & Foerster partner and Olympus Capital's lead trial counsel. "This case is also significant because the arbitration tribunal required respondents to divulge their documentary evidence to ensure a transparent proceeding."
The trial team was led by partner Cedric Chao and included partner George Harris and of counsel Grant Kim. Co-counsel at trial were Bae Kim & Lee of Seoul and Simon & Luke of Houston.