South Korea defeats Chinese investor's final arbitration bid over 264.1 billion won claim

South Korea has defeated a Chinese investor’s final bid to revive claims for at least 264.1 billion won ($197 million), after an international arbitration committee rejected his challenge to an earlier award dismissing the case.

An annulment committee at the International Center for Settlement of Investment Disputes rejected Fengzhen Min’s application Saturday morning, the government said Sunday. The decision leaves intact a May 2024 award that found his investment was unlawful and therefore outside the protection of the Korea-China investment treaty.

Min initially sought approximately 2 trillion won in damages. In his final submissions, he sought restitution of his shares in Pi Korea or monetary compensation of at least 264.1 billion won, along with other damages.

"This was the first case in which a foreign investor directly claimed that Korean civil and criminal proceedings and their outcomes constituted violations of an investment treaty," the government said in a joint statement Sunday.

"The government's victories in both the original arbitration and the annulment proceedings firmly established the principle that investments made in violation of domestic law are not protected under investment treaties."

The case dates to 2007, when Min set up Pi Korea in South Korea to borrow 380 billion won to buy the Huapu Building in Beijing. The loans were backed by a Korean bank.

When Pi Korea failed to repay the money, the bank sought to recover the unpaid loans by selling shares in Pi Korea that had been pledged as collateral. Min challenged the disposal of the shares in the Korean court system, but lost the civil case in a final Supreme Court ruling in 2017.

Separately, he was convicted over promises and transfers of money and benefits to bank employees during the loan process.

Just over three years after losing the civil case, Min filed an investor–state dispute settlement claim in 2020, arguing that the bank’s enforcement of the collateral and related Korean civil and criminal proceedings violated the Korea-China investment treaty, including its protections against unlawful expropriation.

The tribunal dismissed all his claims in May 2024 after accepting the Korean government’s argument that Min’s establishment of Pi Korea and acquisition of its shares formed part of an illegal scheme to obtain financing through improper payments.

It found that the investment was not protected under the treaty and that it therefore lacked jurisdiction over the dispute.

Min sought annulment of the award, arguing that the tribunal had gone beyond its authority, had not given him a fair chance to present his case and had failed to clearly explain its decision.

The committee rejected his application, leaving the original award intact. It also ordered him to pay about 1.51 billion won for the Korean government’s legal costs, plus interest, and to bear the full $426,751 in costs of the annulment proceedings.

The ruling follows a series of victories for the Korean government in major investor-state disputes. In November 2025, South Korea won its annulment case against Lone Star, eliminating an earlier order to pay about 400 billion won, including interest.

The government also won a court case against Elliott Management in February this year, although the dispute next heads to an arbitration panel. In March, a tribunal rejected all claims brought by Swiss elevator-maker Schindler, which had sought 325 billion won from Korea.