Westinghouse, KHNP seek licensing dispute arbitration

Korea Hydro & Nuclear Power Co. (KHNP) and Westinghouse Electric Corp. have taken their almost one-year dispute over South Korea’s nuclear power plant exports to Poland back to a South Korean arbitration body after their talks for an out-of-court settlement faltered, according to nuclear and legal industry sources.

The Korean Commercial Arbitration Board is now assessing damages claimed by each side in relation to the case, which could amount to several hundred million dollars, the sources said on Tuesday.

Their dispute arose after Westinghouse filed complaints against KHNP and its parent Korea Electric Power Corp. in a US court in October of last year to block exports of nuclear power reactors to Poland.

The move came shortly after KHNP inked a letter of intent with Poland’s state-run power company Polska Grupa Energetyczna (PGE) and private firm Zespol Elektrowni Patnow-Adamov-Konin (ZE PAK) to build a nuclear power plant consisting of two or four power units with a 1.4-gigawatts (GW) capacity each.

Westinghouse argued the Korean nuclear reactor model, APR1400, was based on its original design and technology, therefore the two South Korean companies should be held accountable for any damages caused by their export of the APR1400-modeled nuclear reactors.

In response, KHNP lodged countersuits in the US to force Westinghouse to drop the case, while trying to resolve their dispute out of court.

KHNP claimed it was licensed to use the technology, thus it is able to export them without permission from the US nuclear plant developer and is not liable for royalty payments.

Earlier this year they suspended legal proceedings over the dispute and sought to resolve the issue through the domestic arbitration board, but to no avail.

If the dispute is prolonged, it could be a hurdle to South Korea’s efforts to export nuclear power plants and reach a definitive deal with Poland to build a nuclear power plant there, industry observers said.

A nuclear power industry official said, however, that both KHNP and Westinghouse will continue to negotiate under the table, while awaiting the international arbitration body’s decision.

In April of this year, Wojciech Dabrowski, chief executive of PGE Polska Grupa Energetyczna SA, told reporters in Seoul that it was closing in on a binding agreement with KHNP to build a nuclear plant in Poland.

They are discussing details about each party’s stake ownership in their joint venture to be established for the nuclear power project.

Once the deal is finalized, it would be South Korea’s first massive overseas nuclear power plant contract since 2009, when it signed a $20 billion deal with the United Arab Emirates to build and operate four Korea-made APR1400 nuclear reactors.

(The second paragraph from the top was corrected on August 9, 2023. The Korean Commercial Arbitration Board is in charge of the arbitration, not the International Chamber of Commerce)

Write to Jin-Seong Kim and Han-Shin Park at jskim@hankyung.com


Yeonhee Kim edited this article.