Business lawsuits in Korea run through ordinary civil courts under a judge-managed, document-heavy process with no juries and tightly controlled discovery, and the current environment layers aggressive antitrust enforcement, a 2025 corporate governance overhaul, and pending class action legislation on top of that procedural baseline. If you are weighing a dispute, planning around enforcement risk, or deciding whether to arbitrate rather than litigate, the mechanics and the direction of travel both matter.
How Korean Courts Handle Business Disputes
South Korea has a three-tier court system. District Courts hear cases at first instance, High Courts handle appeals, and the Supreme Court is the final court of appeal.1 There are no specialized commercial courts, so business cases are treated as ordinary civil matters. Some district courts assign specialized panels for complex international transactions, securities, or large corporate disputes, but the forum itself is a general civil court.
Trials are decided by judges, not juries. Rather than one continuous proceeding, a case moves through a series of hearings spaced at regular intervals for case management, oral argument, and witness examination. Judges run the process actively and often press parties toward settlement. Documentary evidence carries more weight than live testimony, and dispositive motions like summary judgment are rarely filed and rarely granted.
Discovery looks nothing like the U.S. version. Parties cannot demand documents directly from each other. All production is court-supervised, and a party seeking documents must apply for a court order. Proceedings run in Korean, and foreign-language documents must be submitted with Korean translations.
Appeals to the High Court cover both law and fact, which amounts to a fresh look at the case. The notice of appeal is due within two weeks of receiving the lower court’s decision. The Supreme Court takes only questions of law and generally decides on the papers, without a hearing.
Enforcing a Foreign Judgment in Korea
Korea is not party to any treaty on the recognition and enforcement of foreign judgments, so enforcement runs through domestic law. Under Article 217 of the Civil Procedure Act, a foreign judgment must be final and conclusive and meet four conditions: the foreign court had jurisdiction under Korean standards, the losing party was properly served, recognition would not violate Korean public policy, and the foreign country reciprocally recognizes Korean judgments.
Two points trip up foreign businesses. Korean courts may refuse to recognize foreign awards of punitive damages that exceed actual compensatory losses, treating those portions as contrary to Korean legal order. And interlocutory or non-final decisions cannot be recognized at all, even where they are provisionally enforceable at home.
Arbitration as an Alternative
The Korean Commercial Arbitration Board, established in 1966, is the only officially recognized arbitral institution in Korea. Korea was the first Asian country to adopt the UNCITRAL Model Law, in 1999, and updated its Arbitration Act in 2016 to incorporate the 2006 UNCITRAL revisions. It has been a party to the New York Convention since 1973, so Korean arbitral awards are enforceable in over 150 jurisdictions.
The KCAB’s international arbitration rules changed effective January 1, 2026. The update introduced the KCAB International Arbitration Court, modernized procedural rules, built in an expedited procedure that applies automatically to claims under 4 billion won, and explicitly encouraged diversity in arbitrator selection. Seoul has been promoted as a neutral arbitration seat, backed by the 2017 Arbitration Industry Promotion Act, which funds facility expansion and professional development.
Korean courts have been willing to uphold arbitration agreements despite drafting defects where the parties’ intent to arbitrate is clear. One drafting trap matters: courts treat “optional” arbitration clauses, which let a party choose between arbitration and litigation, as inherently invalid. If you want arbitration, commit to it.
Antitrust Enforcement by the KFTC
The Korea Fair Trade Commission has sharply increased enforcement against both domestic conglomerates and international companies. Since June 2025, it has imposed or decided on more than 2 trillion won (roughly $1.33 billion) in penalties. The agency is adding 237 officials and standing up a dedicated economic analysis bureau and a major investigation planning unit, aimed at digital platforms, cartels, and chaebol self-dealing.
Bank Loan-to-Value Cartel
In January 2026, the KFTC fined four of Korea’s largest commercial banks a combined 272 billion won (about $183.7 million) for colluding on mortgage loan-to-value ratios. Hana Bank, KB Kookmin Bank, Shinhan Bank, and Woori Bank, which together hold roughly 60 percent of the domestic mortgage market, exchanged internal LTV data between March 2022 and March 2024, sharing between 736 and 7,500 data points to coordinate lending limits. The KFTC estimated the banks earned about 6.8 trillion won in interest income through the coordinated behavior.
The case was the first test of the information-exchange collusion prohibition added to the Fair Trade Act in a 2020 revision. The banks publicly called the collusion allegations “false” and signaled they would likely challenge the decision through administrative lawsuits once the formal written ruling arrived.
Google and YouTube Music
The KFTC closed its investigation into Google’s bundling of YouTube Music into YouTube Premium through a consent decree finalized in November 2025. YouTube Music’s market share in Korea rose from 6.02 percent to 38.48 percent between 2018 and 2025, which the regulator attributed in part to the tying arrangement. Google agreed to launch a standalone “YouTube Premium Lite” service priced at 8,500 won for Android and web users, contribute 30 billion won (about $20.5 million) to a fund supporting the domestic music industry through public broadcaster EBS, and freeze the price of its full Premium plan for one year.
Coupang and Platform Oversight
In February 2026, the KFTC imposed corrective orders and an administrative surcharge of 2.185 billion won on Coupang, the dominant domestic e-commerce platform, for violations of the Act on Fair Transactions in Large Retail Business. The agency has flagged ongoing investigations into other major platform operators, including Naver and Baedal Minjok, as part of a broader focus on algorithm-based dominance, data concentration, and network effects.
Corporate Governance Reforms Affecting Shareholder Claims
Korea has been pursuing a governance overhaul aimed at the so-called Korea discount, the persistent undervaluation of Korean equities attributed to weak shareholder protections and chaebol dominance.
In mid-2025, the National Assembly passed amendments to the Commercial Act that expand directors’ fiduciary duties under Article 382-3 to explicitly include shareholders. Directors must now protect and equitably consider the interests of all shareholders, not only the company itself. The amendments also strengthen audit committee elections and minority shareholder representation, including an “aggregated 3 percent rule” that caps any single shareholder’s voting power in audit committee elections. Electronic shareholders’ meetings become mandatory for larger companies starting January 2027.
A December 2025 dividend tax reform cut the top rate on dividend income from 45 percent to a range of 14 to 30 percent, intended to push companies toward higher payouts. The government’s Value-Up initiative, launched in 2024, asks companies to disclose Corporate Value-Up Plans; 174 companies had done so by the end of 2025. Dividends and share cancellations have risen, but the rally has been narrow: Samsung Electronics and SK Hynix together accounted for about half the total increase in KOSPI market capitalization, and more than 60 percent of Korean firms still report returns on equity below the 7 percent long-term average.
For litigation planning, the practical consequence is a broader statutory hook for shareholder claims against directors. The pending civil damages suit filed by the National Pension Service in September 2024 against Lee Jae-yong and Samsung C&T over the 2015 merger ratio illustrates the direction: the NPS, which held an 11.21 percent stake at the time of the merger, is pursuing damages even after the related criminal charges were resolved in Lee’s favor at the Seoul Central District Court in February 2024 and affirmed by the Supreme Court in July 2025. The first hearing in the civil case took place on March 19, 2026, with a second scheduled for June 4, 2026.
Pending Class Action Legislation
The biggest change on the horizon for business litigation exposure is a push to introduce U.S.-style class actions. As of early 2026, six competing bills were pending in the 22nd National Assembly, most of which would create an opt-out system under which court judgments bind all affected individuals unless they actively withdraw.
The bills would lower the plaintiff’s burden of proof, introduce pre-certification discovery, and allow courts to presume a plaintiff’s assertions true where a company fails to comply with document production orders. Some versions include punitive damages of three to five times actual losses. The most contested piece is retroactivity: the lead bill, sponsored by Democratic Party lawmaker Park Kyun-taek, would apply to claims arising from conduct that occurred before the law’s enactment, with the Ministry of Justice proposing a three-year lookback as a compromise.
The People Power Party has formally opposed the legislation, arguing it could trigger excessive lawsuits, burden corporations, and sweep victims into litigation without their full understanding. The party has also pointed to the absence of protective measures found in U.S. systems, such as the business judgment rule. On April 29, 2026, the National Assembly’s Legislation and Judiciary Committee subcommittee postponed processing the bill due to disagreements between ruling and opposition parties, choosing further negotiation over a forced vote.
Human Rights and Environmental Due Diligence Bill
A separate bill would impose mandatory human rights and environmental due diligence obligations on larger Korean companies. The “Bill for the Protection of Human Rights and the Environment for Sustainable Business Management,” reintroduced by Representative Jung Tae-ho in June 2025, would cover companies with at least 500 full-time employees or annual revenue exceeding 200 billion won (roughly $144 million). If enacted, it would be the first mandatory human rights due diligence law in Asia.
Covered companies would need to appoint responsible individuals, form board-level oversight committees, conduct annual impact assessments, and publicly disclose due diligence reports. Enforcement would include potential restrictions on public procurement bids, fines, and civil liability for damages caused by violations. Small and medium-sized enterprises are explicitly excluded. The bill is in the early stages of legislative review.