Challenging Domestic Judgments through Investment Arbitration: Implications for the Forced Labour Litigation in Korea?

Abstract

This paper considers the international legal implications of certain civil lawsuits that recently resulted in Japanese companies being ordered to pay compensation to Korean victims of forced labour, focusing specifically on whether investor-state arbitration could provide a means of redress against judgments affecting those companies. After identifying the jurisdictional hurdles that those companies might face were they to challenge those judgments before an Arbitral Tribunal, this paper explores the most relevant treaty protection disciplines that could be relied upon in bringing such challenges, and discusses the remedies that a competent Arbitral Tribunal could prescribe were it to find that those judgments were not in conformity with Korea's international obligations. Building on existing jurisprudence, this paper shows that investment arbitration may provide a means for offsetting the adverse consequences of Korean forced labour litigation, but also highlights a number of difficulties that the Japanese companies would face in pursuing such an avenue.