U.S. investors holding stakes in Coupang signalled they would additionally take part in investor-state dispute settlement (ISDS) procedures, taking issue with the South Korean government's response to a personal data leak case. The South Korean government plans to respond through an inter-agency "international investment dispute response team".

Industry sources said on Feb. 12 that three additional investors submitted notices of intent to arbitrate over the government's handling of the Coupang case. U.S. investment firms Abrams Capital, Durable Capital Partners and Foxhaven announced this in a press release on Feb. 11 local time. They also said they would join legal objections filed against the South Korean government by Coupang shareholders Green Oaks and Altimeter.

South Korea's Justice Ministry said in a notice that Abrams Capital, Durable Capital Partners, Foxhaven and related companies had additionally submitted notices of intent to arbitrate against the South Korean government based on the South Korea-U.S. free trade agreement (FTA). It added that the additional claimants directly relied on the facts and related arguments in the existing notices filed by Green Oaks and Altimeter.

Earlier, Green Oaks and Altimeter argued that the South Korean government violated the FTA by treating Coupang in a discriminatory way, resulting in losses including a fall in the share price. They submitted notices to the South Korean government last month saying they would initiate ISDS arbitration proceedings. The two firms also previously filed a petition with the U.S. Trade Representative (USTR) requesting an investigation and trade remedy measures over what they called South Korea's "unfair and discriminatory actions" under Section 301 of U.S. trade law.

Abrams Capital, Durable Capital Partners and Foxhaven said they formally notified the South Korean government of their intent to initiate ISDS arbitration. They also sent a letter supporting the request for a USTR investigation related to the existing petition.

The three firms said U.S. shareholders suffered losses worth billions of dollars because of selective law enforcement targeting Coupang, a technology company incorporated in the United States and headquartered there, unbalanced regulatory investigations and false claims that damage reputations.

The South Korean government says it is responding to Coupang's customer data leak issue in accordance with due process and that there is no discrimination against U.S. companies. The government also views related moves in U.S. political circles as being influenced by lobbying by Coupang.

The Justice Ministry said that, as with the notices submitted in January by Green Oaks and others, it would ensure a systematic and professional response to the additional notices from Foxhaven and others, centred on the international investment dispute response team.

A notice of intent to arbitrate is a procedure in which a claimant notifies the other country in writing of its intention to file for arbitration. A formal arbitration filing can be made after 90 days from submission.

Related moves are also continuing in U.S. political circles. The U.S. House Judiciary Committee was reported to have sent an open letter to Harold Rogers (해롤드 로저스), Coupang's interim chief executive, criticising the South Korean government's response and seeking testimony in connection with an appearance before the committee on the 23rd. The testimony is expected to be conducted not as a public hearing but as a closed-door session to hear a statement.

[Yonhap News Agency]