The Traces Han Dong-hoon Left on South Korea

Lone Star, Elliott, Schindler: Three ISDS Victories

The Man Who Safeguarded 6 Trillion Won: Han Dong-hoon's Three Victories in Battles Everyone Said He Would Lose

Chapter 1: The Lone Star Investigation, The Night of a Thirty-three-Year-Old Prosecutor

On a late night in 2006, the lights were on in the 7th floor of the Central Investigation Division of the Seoul District Prosecutor's Office in Seocho-dong.

The glittering night view of Seoul flickered across the glass window, but the thirty-three-year-old prosecutor inside the office had no time to notice. Stacks of documents reaching tens of thousands of pages were piled on the desk, and empty cups of instant coffee filled the wastebasket. Prosecutor Han Dong-hoon was wrestling with numbers all night, highlighter in hand.

The case he was investigating was Lone Star.

This massive private equity fund based in Texas acquired Korea Exchange Bank in 2003 for 1 trillion 383.4 billion won. During a time when the wounds of the foreign exchange crisis had not yet healed, the government had to quickly sell the troubled bank, and Lone Star seized that opportunity.

The problem came after.

While merging Korea Exchange Bank and Korea Exchange Card, Lone Star spread rumors in the market about a capital reduction to lower merger costs. Capital reduction causes share prices to fall. Investors, gripped by fear, sold off their Korea Exchange Card shares, and the stock price plummeted. Lone Star then merged Korea Exchange Card at a bargain price based on the depressed share price.

Everyone could have predicted this. But no one could easily prove it.

Lone Star had the world's best legal advisors, and their logic appeared ironclad. The materials transferred from the Financial Supervisory Service contained only suspicious circumstances, with no decisive evidence to prove guilt in court.

Prosecutor Han Dong-hoon had just completed the Hyundai Motor Group investigation and was preparing to return to his assigned office. His superiors gave him another assignment. He was assigned to the Lone Star case alongside a fellow prosecutor.

When he first reviewed the case files, he felt despair. He had suspicions but no tangible evidence.

But Han Dong-hoon did not back down.

He slept in the prosecutor's office five nights a week. He would lie down on the couch with a newspaper as his blanket, wake before dawn, and go back through the files. No one forced him to do this. It was a hardship he chose for himself.

His decisive move was a search and seizure at the foreign investment bank that had served as Lone Star's advisor. A compulsory investigation of a foreign financial institution was taboo at the time. Superiors, concerned about diplomatic friction, urged caution, and some voices said, "We'll only suffer international embarrassment if we interfere."

Han Dong-hoon convinced the court. A warrant was issued.

And in that dawn, among tens of thousands of seized emails, he finally found the decisive evidence.

Right at the moment when Lone Star announced its capital reduction plan, emails exchanged between staff members contained this sentence: "Capital reduction is not a matter for discussion." While publicly creating fear in the market by appearing to consider capital reduction, internally they had already abandoned the plan. It was deliberate dissemination of false information. It was stock price manipulation.

Han Dong-hoon recalls that moment this way: "I wanted to show justice against their arrogance in taking South Korea lightly."

Based on this evidence, he summoned the foreign executives and, after rigorous questioning, obtained a confession. The court rejected the arrest warrant for the Lone Star Korea representative four times. There was invisible tension between the judiciary and prosecutors, and hints of external pressure coming from somewhere. Through it all, he did not give up.

The trial lasted 10 years.

Even after receiving a transfer to the Busan District Prosecutor's Office, which some saw as a demotion, Han Dong-hoon went up to Seoul twice a week to attend hearings. This case was not merely work for him. It was a matter of South Korea's national pride.

In 2011, the Supreme Court finally confirmed Lone Star's guilt for stock price manipulation. The representative was sentenced to three years in prison.

This verdict was not merely the punishment of one criminal. It was a historic event in which South Korea's judiciary officially confirmed that Lone Star was an unscrupulous capital that committed crimes.

No one knew at the time. That a single guilty verdict that Han Dong-hoon had uncovered and secured would become the only weapon to save South Korea from an astronomical lawsuit of 6 trillion won 20 years later.

Chapter 2: Lone Star ISDS, The Decisive Move That Safeguarded 6 Trillion Won in National Interests

In November 2012, Lone Star filed a lawsuit against the South Korean government at the International Centre for Settlement of Investment Disputes (ICSID) under the World Bank.

The amount claimed was 4.6795 billion dollars. At the exchange rate at the time, it was over 6 trillion won. It was the largest international lawsuit in South Korean constitutional history.

If it is hard to grasp the scale, think of it this way. 6 trillion won is enough to provide free school meals to all elementary school students across the country for 10 years. It is a budget sufficient to build an entirely new subway line 2 in the Seoul metropolitan area.

Lone Star's logic was this: "We tried to sell Korea Exchange Bank, but the Korean government unfairly delayed approval of the sale while watching public opinion. As a result, we suffered enormous losses." On the surface, it was a plausible claim. It was an attempt to pocket huge profits from a bank acquired at a bargain price, then extract several more trillion won by claiming that the sale approval was delayed.

Bureaucrats were bewildered. A defeatist sentiment of "let's settle and reduce the amount" began spreading in government circles.

But the key to changing the course of this battle was already there. It was the criminal guilty verdict that young Prosecutor Han Dong-hoon had secured in 2011.

There is a principle in international law called the Clean Hands Doctrine. It means that one with dirty hands cannot seek the protection of the law. Lone Star had committed the crime of stock price manipulation, and South Korea's Supreme Court had confirmed it as guilty. They could argue that the Korean government's delay in approving the sale was not unwarranted interference but a legitimate response to a criminal investigation.

A single line of an email that Han Dong-hoon had found 20 years earlier returned as the defense logic that protected 6 trillion won of taxpayer money.

Throughout his career as a prosecutor, Han Dong-hoon carried the records of this case like a burden of life. Every time he moved, he brought copies filling an entire truck. Most government officials who knew the lawsuit well had retired, and he was virtually the only active official who fully understood this case from beginning to end.

In August 2022, the results of the first arbitration award were announced. The arbitration tribunal rejected most of Lone Star's claim of 6 trillion won but ruled that South Korea should compensate approximately 216.5 million dollars, roughly 280 billion won. The majority opinion acknowledged Lone Star's stock price manipulation while recognizing some responsibility on the part of the Korean government for delaying approval, while the dissenting opinion explicitly stated, "Because Lone Star engaged in stock price manipulation, compensation liability is zero."

This dissenting opinion was evidence that the stock price manipulation guilty verdict that Han Dong-hoon had designed and proven was valid even on the international stage.

At this time, what blocked Han Dong-hoon's path was not Lone Star but politicians from his own country. An opposition member said that putting forward Han Dong-hoon in a low-odds appeal process would be cruel false hope, making them a traitor. A broadcaster asked, "With interest accumulating, shouldn't Han Dong-hoon take responsibility?" Another member attacked the Lone Star stock price manipulation investigation itself as inadequate. "This is cruel false hope through a fight with no chance of winning." "If we lose, Han Dong-hoon should pay out of his own pocket." Curses mixed with attacks poured in from all sides.

Looking back, their actions were bullets fired not from enemy lines but from friendly forces. While the Minister of Justice fought against the massive speculative capital of Lone Star, politicians from the same country pulled the trigger on his back.

Justice Minister Han Dong-hoon's thinking was different. "Even if the probability of success was not 100 percent, the government had to work night and day to make it 100 percent. How could I turn a blind eye to a criminal who committed stock price manipulation taking away precious national funds?"

The probability that an ICSID arbitral award would be overturned was statistically less than 10 percent. Even legal experts advised that "annulment is extremely unlikely." Practically speaking, paying 280 billion won and ending the matter seemed like the safe choice.

He did not surrender to the odds.

In an internal meeting, he reportedly said: "If this goes wrong, I will take responsibility. But let us not say we should not do it." He was equally firm with his staff: "Do not try to protect me. I will protect you."

What civil servants fear most is bearing responsibility when they fail. Han Dong-hoon took that fear upon himself.

He firmly refused demands to replace the litigation counsel. The law firm representing the government had previously won a case against Lone Star. He protected his staff and the counsel team with the principle: "One does not change commanders in the middle of war."

In August 2023, he established the International Legal Affairs Bureau within the Ministry of Justice. Until then, response to international litigation had been handled by a small organization with only a handful of staff. Han Dong-hoon elevated this to the bureau level and significantly expanded the expert personnel. Under the bureau, he created three departments,the International Legal Affairs Policy Division, the International Legal Affairs Support Division, and the International Investment Dispute Division,and stationed 25 personnel. Han Dong-hoon explained: "ISDS cases are costly because we lack domestic capacity and must rely on foreign law firms. With experience, we can respond adequately ourselves, protect national interests, and save costs." This International Legal Affairs Bureau became the core foundation for defending South Korea not only in the Lone Star case but in all subsequent international disputes.

That August, he stood before the press. "This is blood-earned tax revenue. It is the precious property of our people. The Ministry of Justice will challenge the award and file for annulment. We have a winning case."

Many shook their heads. They said it was like striking a rock with an egg. He held a hammer that could crack the rock. It was a conviction he had carried for twenty years.

On November 18, 2025, the final ruling came down. The ICSID annulment committee entirely annulled the original award requiring the Korean government to pay compensation to Lone Star. Compensation: zero won. Lone Star's initial claim of approximately 6 trillion won was reduced to 280 billion won in the first award, and under Han Dong-hoon's leadership, the annulment petition ended in complete victory,not a single won to pay. South Korea would even recover approximately 7.2 billion won of its litigation costs. It was a dramatic reversal unparalleled in international arbitration history.

When the verdict was announced, the Prime Minister of the Lee Jae-myung administration called it "a triumph for the new government" in a briefing. Han Dong-hoon responded, "It is a strange sight, like one who cursed the players for ninety minutes straight, then rushed onto the field to hoist the trophy upon winning the match." Those who had previously opposed the appeal and attacked Han Dong-hoon fell silent or changed their tune. The words "traitor" vanished, and no one mentioned the "interest responsibility theory" again.

Noteworthy was the reaction of the current justice minister, who stood at the opposite political pole. He described Han Dong-hoon's decision as "a well-executed act and a conviction-driven decision worthy of praise." He acknowledged that, setting aside factional logic, the decision was right for the national interest.

Han Dong-hoon calmly shared his thoughts: "I simply did what I had to do. Because this money is not mine but belongs to the people of this nation."

Chapter 3: The Elliott ISDS, Threading the Needle

Before the Lone Star dispute was resolved, another international lawsuit file lay on Han Dong-hoon's desk. This one was from Elliott Management, an American activist hedge fund, targeting the South Korean government.

In 2015, South Korea's largest electronics conglomerate pursued a merger among its subsidiaries. It was intended to secure management succession, but controversy arose over merger terms unfavorable to one shareholder. Elliott, which held shares in the subsidiary at the time, opposed the merger, but the proposal passed when the National Pension Service cast a vote in favor.

After the merger, the state affairs crisis erupted, overturning the situation. It was revealed that the government at the time had pressured the National Pension Service to support the merger, and criminal convictions against those involved were finalized. Elliott used this as grounds to file, in July 2018 under the Korea-U.S. Free Trade Agreement, an ISDS claim for approximately 1 trillion won.

After five years of dispute, in June 2023, the Permanent Court of Arbitration ruled that the Korean government must pay Elliott approximately 160 billion won in principal damages of about 60 billion won plus interest. The PCA determined that while the National Pension Service was not a state organ under Korean law, it could be considered a de facto state organ.

Han Dong-hoon thought differently. The National Pension Service is not a state organ. Therefore, he believed the award treating the National Pension Service's actions as government actions was fundamentally flawed. In July 2023, less than a month after the ruling, he himself held a briefing and announced that he would file an annulment petition in the English courts.

The success rate for ISDS annulment petitions was only about 3 percent in recent years. This meant putting the nation's name behind a case with a 97 percent probability of loss. Attacks poured down in the same pattern as before. "Han Dong-hoon should even be charged with breach of duty for filing an annulment petition." "Will you pay the interest instead?" The pattern was identical to the Lone Star case.

Han Dong-hoon did not waver.

The annulment petition went through three stages in the English courts. It was dismissed at the first stage. In August 2024, the English High Court dismissed the lawsuit. The Korean government appealed. In July 2025, the English Court of Appeal reversed the first decision and remitted the case back to the High Court. Then, on February 23, 2026, in the remand hearing, the English High Court finally ruled in favor of the Korean government.

The English court cited the fact that the National Pension Service has separate legal personality from the government, that the management of public pension funds does not constitute a core state function like national defense or public order, and that the National Pension Service's routine decisions are not entirely subordinate to the government. The very logic that Han Dong-hoon had made central to his annulment petition was upheld intact, two years and seven months later.

Upon hearing of the victory, Han Dong-hoon immediately issued a statement: "Following the Lone Star case, the people of South Korea have won in the Elliott ISDS annulment petition as well. I thank the civil servants and others who did their best to protect our precious tax revenue."

However, the Elliott case is not completely concluded. With the English court remitting the award, further arbitral proceedings remain. In another case by hedge fund Mason, which claimed damages from the same merger process, compensation of approximately 86 billion won was already confirmed, so additional dispute is anticipated in subsequent arbitration. Yet the essential point remains unchanged. Han Dong-hoon succeeded in challenging the 3 percent odds and overturning an award for approximately 160 billion won in damages.

Chapter 4: The Schindler ISDS, The Designer's Victory

While the Lone Star and Elliott cases were pending, another international lawsuit was approaching South Korea.

Schindler, a global elevator company headquartered in Switzerland, filed an ISDS claim against the South Korean government in 2018. The claim amount was approximately 320 billion won.

In this case, Han Dong-hoon's role differed from that in Lone Star or Elliott. In Lone Star, as a prosecutor, he directly investigated and secured a guilty verdict. In Elliott, as justice minister, he disregarded criticism and decided to file an annulment petition. In Schindler, he neither conducted investigations nor made litigation decisions himself. What he did was lay the foundation and draw the blueprint to win this battle.

The International Legal Affairs Bureau he established in August 2023 was precisely that blueprint.

The International Legal Affairs Bureau established three divisions under its authority. The International Legal Affairs Policy Division handled legal consultation on treaty conclusion and international negotiation, the International Legal Affairs Support Division oversaw international dispute prevention and legal review, and the International Investment Dispute Division managed ISDS response and operational matters. The work previously handled by small teams in two divisions was expanded to one bureau with three divisions and a staff of twenty-five.

Because of this organization, the government could recruit an international arbitration specialist. The first director appointed to lead the International Legal Affairs Bureau was an expert who had practiced law at a U.S. law firm and had served as mediator and arbitrator at international arbitration institutions. This director led the operational work on the Lone Star annulment petition and subsequently oversaw the Ministry of Justice's response in the Schindler case.

The head of the responding team at the law firm representing the government in the Schindler case stated, "This was a difficult case involving three complex issues: international arbitration, finance, and fair trade regulation. Experts from each field worked together as one team to logically and consistently demonstrate the international law validity of government regulation." The International Legal Affairs Bureau served as the control tower, coordinating external law firms, the Fair Trade Commission, the Financial Services Commission, the Financial Supervisory Service, and other relevant agencies.

On March 14, 2025, the Permanent Court of Arbitration dismissed Schindler's claim entirely. It was a complete victory requiring no payment of the full 320 billion won.

Han Dong-hoon commented on the news: "This is thanks to the expertise and patriotism of the civil servants and others in the International Legal Affairs Bureau, which I established with the highest priority as justice minister." He defined his role as the designer who created the system and placed the credit for the work squarely on his staff.

And he added one more point: "In the Lone Star and Elliott cases, opposition politicians and civic leaders strongly obstructed by saying 'either pay with your own money or do not sue,' but in the Schindler case they did not obstruct to that extent." By winning consecutively in Lone Star and Elliott, the very criticism of "pursuing a hopeless lawsuit" could no longer be voiced.

Chapter 4 Conclusion: What the Three Victories Left Behind

In 2003, there was a thirty-three-year-old prosecutor deployed to the Lone Star investigation. Over the course of more than twenty years, he carried the case records with him, filling a truck bed worth of moving boxes. Even when transferred, he came to Seoul to attend trials. As justice minister, he challenged 97 percent odds to sue in the name of the nation. Though criticism poured in from all directions, he did not waver. And after leaving office, he witnessed the organization he had built deliver a third victory.

In Lone Star, he escaped liability for approximately 400 billion won in compensation. In Elliott, he overturned an award for approximately 160 billion won. In Schindler, he defeated a claim for 320 billion won entirely. He threaded the 3 percent needle twice and secured a complete victory in the third battle.

Han Dong-hoon spoke as follows.

"In the end, we could fail. But if self-interest does not taint public decisions, I can accept responsibility for the outcome. There is no free lunch. If something is gained, something must be surrendered."

"Courage is not the absence of fear and anxiety. Courage is acting while feeling them."

This story shows how one person's expertise and courage can change a nation's fate. Someone who said no when everyone urged surrender, who fought to the end. His twenty years left this lesson for South Korea.

Justice does not protect itself. It is protected through someone's courageous decisions and relentless effort.