The foreign commercial arbitration case between South Korean Kookmin Bank and World City Asset Management and World City, two real-estate development firms, has been received by the Cambodian Court of Appeals.
World City Asset Management received a loan from Kookmin bank in Korea in 2007 to aid World City Co Ltd to develop Camko City on the outskirts of Phnom Penh. However, a few years later, both companies were late in repaying the loan.
World City invested US$2 billion to develop Camko City on 119 hectares in the Sen Sok district of Phnom Penh and planned to be finished by 2018.
The Post reported recently that Lee Sang-ho, the company’s chief executive, and Korean business leader Lee Tae-hwan, also connected with loans from the now-bankrupt Busan Savings Bank, are still serving suspended sentences on embezzlement charges.
Kookmin bank submitted its case through the Korean Commercial Arbitration Board (KCAB) on January 30 2012. On May 9, KCAB accepted the case for arbitration.
“The Korean Commercial Arbitration Board confirms that the Award No11113-0021 dated 30 January 2012 of the Korean Commercial Arbitration Board is final and may be enforced in any court in the world which has legal jurisdiction,” the letter endorsed by Daesoo Kweon, president of the KCAB stated.
Ros Monin, an attorney for Kookmin bank, said the case had been submitted to the Cambodian appeals court on May 18.
However, it has been delayed several times after the court received a request from the defendants.
“They have suspended three times already, after they received a request from the defendants since the court accepted the case from us. And, we did not get any clear explanation over the suspension,’ he said. “Actually, the court has self judgment. I don’t know why it is very late in speeding up this process.”
He said that his client had loaned millions of dollars to the defendants since 2007. At the time, both sides already agreed to foreign arbitration should any problems arise.
Seng Sivutha, chief judge on the case at the appeals court, said the court had already begun the hearing three times, however a postponement had been requested by the defendants. “The delay is not the fault of the court because we already set the date for hearing. But, we got the request from the defendants,” he said.
Kheng Ser, assistant to managing director for World City, was not aware of the issue.
Cambodia had acknowledged the law on the Approval and Execution of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards on June 10, 1958, in New York and was acknowledged by Cambodia on January 5, 1960.
Article 8 of the law specifies that the appeals court, following receipt of an application for recognition and enforcement, shall provide notice of the complaint to the other party that the award is to be implemented against within a period of 10 days after the court has received the application.
The party which the award is to be implemented to shall be entitled to file an objection to the appeals court not to recognise and enforce the foreign arbitral award by stringently providing evidence and legal basis within a period of 60 days after the appeals court has received the application for recognition and enforcement.
Ros Monin plans to send a letter to the appeals court about the case. “I plan to write some more letters in order to urge the court to expedite the process. I plan to submit the letter this week.”
Seng Sivutha said that the court will resume the hearing next month. “We are going to hold the final proceeding on the decision in October, to let them report to us then we will check and see what their report says before we make a decision.”
To contact the reporter on this story: May Kunmakara at [email protected]