Arnold & Porter Obtains Victory for the Republic of Korea in Second Dayyani Investment Treaty Arbitration
Arnold & Porter has secured a victory for the Republic of Korea in a second investment treaty arbitration brought by six Iranian investors, members of the Dayyani family. In an award dated September 28, 2026, the arbitral tribunal dismissed all of the Claimants’ claims on the merits and awarded Korea 75% of its legal and expert costs, as well as its full share of the administrative costs of the arbitration. The Claimants had initially sought damages of approximately US $1 billion, but later reduced their claim to roughly US $555 million.
The arbitration arose from the Claimants’ allegations that Korea had violated the bilateral investment treaty between Korea and Iran by allegedly delaying payment of, and failing to pay in full, an award rendered in an earlier arbitration between the parties under that same treaty. The Claimants alleged breaches of the treaty’s fair and equitable treatment and free-transfer provisions, as well as its provisions concerning the final and binding status of arbitral awards issued pursuant to the treaty.
The dispute concerned Korea’s efforts to pay the earlier award while addressing the application of U.S. sanctions against Iran, Korea’s challenge to the earlier award before the English courts, and attachment and collection orders issued by Korean courts in proceedings brought by a third-party creditor against one of the Claimants. The tribunal unanimously rejected all of the Claimants’ claims on the merits, upholding Korea’s position that it had acted reasonably and did not breach the treaty.
Arnold & Porter partner Anton A. Ware, who acted as lead counsel for Korea in the arbitration, commented: “The Tribunal’s Award not only vindicates Korea’s good-faith compliance with its international obligations, but also clarifies important issues involving the interplay of investment treaty protections, award compliance, and third-country sanctions regimes, with implications far beyond this case. We are honored to have helped to achieve this important victory for Korea.”
The arbitration was conducted under the 1976 UNCITRAL Arbitration Rules and administered by the Permanent Court of Arbitration as PCA Case No. 2022-12, Mohammad Reza Dayyani, Abbas Dayyani, Mohammad Hossein Dayyani, Ali Dayyani, Fatemeh Dayyani and Kosar Dayyani v. Republic of Korea. The tribunal was composed of presiding arbitrator Professor Albert Jan van den Berg, Dr. Michael W. Bühler, and Professor John R. Crook.
The Arnold & Porter team was led by partners Jun Hee Kim and Anton A. Ware, senior counsel Paolo Di Rosa, senior associates Bart Wasiak and Tereza Gao, and associates Dianne Lake, Peter J.C. Saban, Grace Yang, and Lyuzhi Wang. Korea was jointly represented by Arnold & Porter and Peter & Kim.
