The background and full procedural history of this case can be found here. In sum, the dispute stems from a 2011 agreement by KT Corporation and KTSAT Corporation (“KT”), a Korean satellite communications provider, to sell the KOREASAT-3 satellite for $500,000 to Asia Broadcast Satellite Global Ltd. and Asia Broadcast Satellite Holdings, Ltd. (“ABS”), a Bermuda satellite communications provider based in Hong Kong. It was also agreed that KT would operate the satellite for ABS for an $800,000 fee and additional technical engineering fees. The parties entered into a Purchase Agreement and Operating Agreement, both of which had arbitration clauses. In 2013, however, the Korean government declared the sale “null and void” because KT had failed to obtain a permit necessary to comply with the Foreign Trade Act. The parties then submitted issues relating to the Purchase Agreement and Operating Agreement to an International Chamber of Commerce (“ICC”) arbitration panel. The ICC panel first issued a partial award, which held that ABS has the title to the satellite and that no Korean mandatory law was violated when title passed. KT then moved to vacate the partial award in New York federal court and sought remand of the case to the ICC. ABS cross-moved to confirm the partial award. In April 2018, the New York federal court confirmed the partial award, finding that the ICC panel had not exceeded its authority and had not manifestly disregarded the law. In the meantime, in March 2018, the ICC panel issued its final award, which held that ABS had properly terminated the Purchase and Operating Agreements in response to KT’s breaches and was owed approximately $1 million in damages. ABS then moved to confirm the final award in New York federal court, and KT cross-moved to vacate the final award.
KT’s petition to vacate was based on two grounds: 1) the ICC panel acted in manifest disregard of New York law by failing to award KT the purchase price or other compensation after awarding ABS the title to the satellite; and 2) the ICC panel exceeded its authority by resting its holding on the invalidity of the Korean government’s order. The New York federal court denied KT’s motion to vacate, finding that the ICC panel did not exceed its authority because it found that KT had breached the Purchase and Operating Agreements. Thus, regardless of whether the ICC panel was correct or not in interpreting the Korean government’s order, the court held that the ICC panel had sufficient basis to find that KT had breached the Agreements, which was “squarely in its authority.” The court also held that the ICC panel did not act in manifest disregard of the law.
The New York federal court also granted ABS’ motion to confirm the final award. In so doing, the court noted that KT’s claim that the final award violated public policy is the same argument it made previously, which was rejected by the court in its previous opinion confirming the partial award. For the same reasons, the court again rejected the argument.
KT Corporation, et al. v. ABS Holdings, Ltd., et al., Case No. 17-Civ-7859 (USDC S.D.N.Y. July 12, 2018).
This post written by Jeanne Kohler.
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