Hyundai Heavy Industries Co., Ltd. et al. v. International Petroleum Investment Company, et al.

Compass Lexecon expert Joseph Kalt, supported by Nancy Bonn and a team in our Cambridge, MA office, was retained by attorneys for claimants, Hyundai Heavy Industries, Co. and a group of Hyundai related entities and shareholders in an ICC arbitration in 2008 involving a breach of contract and other claims related to a large Korean petroleum refining and marketing company. Claimants asserted that the respondents underpaid dividends as described in the shareholder’s agreement. Dr. Kalt examined the economics of the decision to underpay dividends in order to finance two expansion projects being undertaken by the company. Dr. Kalt concluded that paying the dividends as described under the agreement would have had no material effect on the company’s ability to obtain financing for these projects or on the financial condition of the company. The ICC agreed with Dr. Kalt’s conclusions stating that underpaying the dividend “…was not justified by the need for the financing of the Projects in either 2006 or 2007.” Dr. Kalt provided written and oral testimony before the arbiter, and the ICC ruled that the respondents breached the agreement by refusing to pay the appropriate dividends. The ICC award was worth hundreds of millions of dollars to Hyundai. We worked with David Rivkin and Christopher Tahbaz of Debevoise & Plimpton LLP, and Kevin Kim of Bae, Kim and Lee LLC.