Hyonhee Shin

SEOUL (Reuters – South Korea has agreed to compensate Iran’s Dayyani Group for a dispute that occurred in 2015. The payment will be made after the United States allowed the country to proceed without violating sanctions.

Dayyani, the Iranian family that owns Entekhab electronic consumer electronics company, has filed an investor dispute settlement (ISDS), complaint against South Korea’s government in 2015. It cited breach of an agreement. Seoul failed to return $50 million of its deposit for the unsuccessful bid to buy a large stake in Daewoo Electronics.

Seoul was ordered by the International Centre for Settlement of Investment Disputes of World Bank to compensate the Dayyani family with a total of 73 billion won (or $61.4 million). However, this payment is still not due to sanctions by the United States against Iran.

According to the South Korean foreign ministry, the U.S. Treasury’s Office Of Foreign Assets Control has issued a “specific licence” for payment through the U.S. financial systems on Wednesday.

The ministry stated that the license would provide the foundation for the speedy settlement of ISDS with Dayyani’s family. This has been a pending issue between the countries.

An ISDS permits a foreign company to arbitrate against another country in which it has invested.

South Korea suffered its first investment treaty conflict loss with South Korea in the Dayyani case. It appealed in 2019.

Washington reinstated sanctions against Iran after President Donald Trump withdrew Iran from the 2015 nuclear accord with six major powers. Under that agreement, Tehran was required to curtail its nuclear programme in return for U.S. sanctions relief.

Iran has repeatedly demanded the release of about $7 billion of its funds frozen in South Korea, calling it “hostage https://www.reuters.com/world/asia-pacific/iran-says-south-korea-holding-7-bln-iran-funds-hostage-2021-01-05.”

($1 = 1,188.4300 won)