Overview of ADR in Korea

Introduction

South Korea introduced formal arbitration practices in the 1960s, with the Arbitration Act in 1966. A critical step in establishing a global ADR presence was Korea’s adoption of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1973. The establishment of the Korean Commercial Arbitration Association (KCAA), now the Korean Commercial Arbitration Board (KCAB), provided an institutional foundation for arbitration in Korea, especially as the board developed specific arbitration rules under the Supreme Court’s guidance. A significant update in 1999 aligned Korea’s Arbitration Act with the UNCITRAL Model Law, further standardising its practices in line with international norms.

ADR Approaches

In Korea, ADR encompasses arbitration, mediation, conciliation, and consultation, with arbitration and mediation being the most common. Arbitration involves a binding decision by an arbitrator, who is selected by the respective litigants, and whose award is enforceable in court.

Mediation, by contrast, is non-binding unless it results in a court-approved settlement. Mediation often relies on a mediator who guides the parties toward a mutually acceptable agreement without imposing a solution.

Unique to Korea is “statutory conciliation,” a government-backed process where settlements reached are enforceable like judicial rulings, differentiating it from general mediation.

Court-Annexed Conciliation and Mediation Structures

The Civil Conciliation Act (CCA) enacted in 1990 broadened the scope of court-annexed conciliation, previously limited to specific civil disputes. The process involves a judge, or conciliation committee, helping parties reach a settlement that has the legal effect of a court judgment if successful.

The KCAB’s arbitration services extend beyond mere facilitation, allowing parties flexibility in tailoring proceedings to meet their needs, such as choosing arbitrators and setting procedures. KCAB arbitrations are fully enforceable but require a court order for enforcement.

Mediation in Korea is often encouraged by government agencies at minimal or no cost. A good example is the Electronic Commerce Mediation Committee (ECMC), which conducts both in-person and virtual mediations, particularly benefiting e-commerce disputes.

Other statutory conciliation bodies, including the Consumer Dispute Settlement Committee (CDSC) and the Copyright Deliberation and Conciliation Committee (CDCC), address specialised disputes and provide resolutions that carry judicial weight upon settlement.

ADR Organizations and Panel Composition

The KCAB has more than 1,000 arbitrators with varied professional backgrounds, including law, academia, and business. Other ADR bodies, such as the ECMC, draw experts from consumer protection and electronic transactions fields to provide sector-specific dispute resolution services. These organisations provide training to ensure mediators and arbitrators meet the professional standards expected in increasingly complex dispute contexts.

Process and Integration with Court Procedures

Korean courts support ADR by requiring certain disputes to go through conciliation or mediation before litigation, a system known as “mediation-first.” Additionally, judges can refer cases for conciliation if appropriate. Although courts do not directly refer cases to arbitration, an existing arbitration agreement typically precludes litigation, as courts dismiss cases covered by such agreements.

In terms of evidence collection and assistance, arbitrators can request court support under the Arbitration Act, which allows for investigation and recording of evidence when necessary. Court-annexed conciliations also enable judges to gather evidence relevant to the dispute.

Enforcement and Future Prospects of ADR in Korea

The enforceability of ADR outcomes varies by method: arbitration awards have the same effect as court judgments, while mediated settlements require court validation to be enforceable.

It is arguable that a unified mediation law is needed to streamline the diverse conciliation processes under a general statute. Such a statute could enhance efficiency, coherence, and accessibility in Korea’s ADR landscape.

Overall, Korea’s ADR system has evolved to provide cost-effective, flexible dispute resolution alternatives suitable for both domestic and international litigants, reflecting a significant shift toward expeditious legal processes that accommodate the demands of a globalised economy.

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