Seoul: The justice ministry announced that it has sent a formal request to Lone Star, a private equity fund, asking for the reimbursement of legal costs resulting from an investor-state dispute settlement related to the 2012 sale of a local bank. This follows the recent ruling by the International Center for Settlement of Investment Disputes (ICSID), which favored South Korea by nullifying its previous decision that required Seoul to compensate Lone Star with US$216.5 million plus interest.

According to Yonhap News Agency, the ICSID's decision mandates Lone Star to cover South Korea's legal expenses incurred during the proceedings within 30 days, with the deadline set for December 18. The justice ministry's letter specifies a reimbursement total of 7.4 billion won (approximately US$5 million), accounting for legal expenses and interest.

The ministry emphasized its commitment to protecting national interests and promptly recovering legal costs. It also noted that Lone Star has voluntarily withdrawn a lawsuit filed at a U.S. federal court in 2023.

The dispute traces back to Lone Star's acquisition of Korea Exchange Bank (KEB) in 2003 for 1.38 trillion won and its subsequent sale to Hana Financial Group for 3.92 trillion won in 2012. Lone Star alleged that government interference led to a missed opportunity to sell KEB at a better price, resulting in significant financial losses.

After the ICSID's 2022 ruling requiring compensation to Lone Star, South Korea appealed the decision. In July 2023, Lone Star sought to annul the ruling, stating the compensation was inadequate. Simultaneously, Seoul filed a petition to overturn the award and suspend the decision, citing concerns over the tribunal's authority and procedural violations.