Arbitration over the Barakah plant reveals governance failures and threatens Seoul’s “One Team” credibility abroad

South Korea’s two state-run energy firms, Korea Electric Power Corp. (KEPCO) and Korea Hydro & Nuclear Power (KHNP), are locked in a costly legal dispute over final settlement payments for the Barakah nuclear power plant project in the United Arab Emirates. KHNP filed for arbitration with the London Court of International Arbitration in May, seeking about $1 billion in additional compensation for delays and extra work orders it says were caused by KEPCO and the UAE client, Emirates Nuclear Energy Corporation. The Barakah project, awarded in 2009 and completed last year, was South Korea’s first overseas nuclear power export and a landmark $14.1 billion (20 trillion won) deal.

According to reports submitted to ruling Democratic Party lawmaker Kim Dong-ah, KEPCO and KHNP expect to spend a combined $26 million (36.8 billion won) in legal fees — $9.9 million (14 billion won) by KEPCO and $16.1 million (22.8 billion won) by KHNP. The lawmaker said parliament will review how the previous Yoon Suk-yeol administration managed coordination between the two utilities and hold those responsible accountable. The arbitration follows January’s global settlement between Westinghouse Electric, KEPCO and KHNP, which ended a long-running intellectual property dispute and reopened the path for future nuclear cooperation.

South Korea’s two state-run energy firms, Korea Electric Power Corp. (KEPCO) and Korea Hydro & Nuclear Power (KHNP), are locked in a costly legal dispute over final settlement payments for the Barakah nuclear power plant project in the United Arab Emirates. KHNP filed for arbitration with the London Court of International Arbitration in May, seeking about $1 billion in additional compensation for delays and extra work orders it says were caused by KEPCO and the UAE client, Emirates Nuclear Energy Corporation. The Barakah project, awarded in 2009 and completed last year, was South Korea’s first overseas nuclear power export and a landmark $14.1 billion (20 trillion won) deal.

According to reports submitted to ruling Democratic Party lawmaker Kim Dong-ah, KEPCO and KHNP expect to spend a combined $26 million (36.8 billion won) in legal fees — $9.9 million (14 billion won) by KEPCO and $16.1 million (22.8 billion won) by KHNP. The lawmaker said parliament will review how the previous Yoon Suk-yeol administration managed coordination between the two utilities and hold those responsible accountable. The arbitration follows January’s global settlement between Westinghouse Electric, KEPCO and KHNP, which ended a long-running intellectual property dispute and reopened the path for future nuclear cooperation.

Get your
KoreaPro
subscription today!

Unlock article access by becoming a KOREA PRO member today!

Unlock your access
to all our features.

Standard Annual plan includes:

• Receive full archive access, full suite of newsletter products

• Month in Review via email and the KOREA PRO website

• Exclusive invites and priority access to member events

• One year of access to NK News and NK News podcast

There are three plans available:
Lite, Standard and
Premium.

Explore which would be
the best one for you.

Explore membership options

© Korea Risk Group. All rights reserved.
No part of this content may be reproduced, distributed, or used for
commercial purposes without prior written permission from Korea Risk
Group.