U.S. Grants South Korea to Pay Overdue Compensation to Iranian Firm

- 13 January 2022 21:22 WIB
South Korea will pay overdue compensation to Iranian company. (Unsplash/Sharon McCutcheon)
South Korea will pay overdue compensation to Iranian company. (Unsplash/Sharon McCutcheon)

JAKARTADAILY.ID - According to Seoul's foreign ministry, the U.S. has allowed the South Korean government to deliver the delayed compensation to Iran's Dayyani Group under a 2018 investor-state dispute settlement (ISDS), as reported by Reuters today (January 13, 2022).

In 2015, Dayyani, the family behind Entekhab, an Iranian consumer electronics company, made an investor-state dispute settlement (ISDS) lawsuit against the South Korean government, claiming violation of the contract.

It argued that Seoul did not send the $50 million deposit that ended up unsuccessful to buy a majority interest in the insolvent Daewoo Electronics.

According to the South Korean foreign ministry, the US Treasury's Office of Foreign Assets Control issued a particular authorization on January 6 to permit payment through the U.S. financial system.

"The license is expected to lay important groundwork for a speedy conclusion of the ISDS settlement with the Dayyani family, which has been one of the pending issues between the two countries," the ministry explained.

The World Bank's International Centre for Settlement of Investment Disputes directed Seoul to pay the Dayyani family 73 billion won ($61.4 million) in compensation in 2018, but the transaction has yet to be paid due to U.S. sanctions against Iran.

More sanctions were imposed on Iran in 2018 when former President Donald Trump pulled from Iran's 2015 nuclear deal with six major nations, under which Tehran pledged to curtail its nuclear program in return for respite from US sanctions.

The ISDS authorizes a corporation from one country to pursue arbitration against a firm from another country in which it has invested.

South Korea's first setback in an investment treaty issue occurred in the Dayyani case, and its appeal was denied in 2019.

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Editor: Djauhari Effendi

Source: Reuters

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