NEW YORK, June 11, 2019 /PRNewswire/ -- The Gale Investments Co., LLC (Gale), a U.S. family-owned real estate development company, today announced that it has submitted a notification of intent to arbitrate a $2+ billion dispute with the Republic of Korea (Korea) at the World Bank's International Centre for Settlement of Investment Disputes (ICSID) as a result of contested actions by Korea relating to the development of the $35 billion Songdo International Business District (Songdo).
In 2001, Korea invited Gale and it's best-in-class partners to spearhead the development of Songdo, a brand-new city and gateway to Northeast Asia, which has become an international model for smart-connected cities and city-scale sustainable development. Korea instructed Gale to partner with POSCO Engineering & Construction (POSCO E&C), which is owned by POSCO Group (PKX).
Songdo is the largest Korea-U.S. joint real estate venture ever developed. Built on 1,500 acres of waterfront property, land reclaimed from the West Sea, Songdo is located near Incheon International Airport 40 miles southwest of Seoul. Today, Songdo boasts a landmark sky-scraper - the Northeast Asia Trade Tower (the second tallest tower in Korea), more than 20,000 residential housing units, a retail mall, luxury hotels, a convention center modeled after the iconic Sydney Opera House, an arts, performances, and culture complex with waterfront views, the world-class Chadwick International School, a 100-acre Central Park reminiscent of the eponymous park in New York City, Venetian-style canals, and a Jack Nicklaus Signature golf course and clubhouse which served as the location for the 2015 President's Cup.
"Gale achieved these remarkable results despite multiple impediments raised by the Korean government, including seizing land and profits and facilitating POSCO E&C's seizure of Gale's real estate and development rights," said Gregory M. Williams, of Wiley Rein, LLP, lead counsel for Gale. "POSCO E&C itself also overcharged hundreds of millions of dollars in construction work and engaged in extensive violations of its contractual and statutory duties to Gale. Korea expropriated a substantial portion of Gale's investment in an unlawful manner and unfairly and inequitably took from Gale the value of investments, discriminated against Gale, conspired to divest Gale of its investments, and used its public powers to harass and coerce Gale into ceding valuable rights. Through these actions, Korea caused Gale more than U.S. $2 billion in damages," Williams added.
In response to POSCO E&C's conduct, Gale has commenced arbitration at the International Court of Arbitration of the International Chamber of Commerce (ICC) as well as initiated proceedings in the U.S. District Court for Southern District of New York (SDNY) (Case 1:19-cv-02498-JGK).
"Eighteen years ago, Gale International, my family-owned, third-generation company was honored to be invited by the South Korean Government to build an environmentally-friendly, international destination that would serve as the gateway to the Korean peninsula," said Stan Gale, Chairman and CEO of Gale International. "This project has been the culmination of a lifetime of work, transforming Korea's dream of Songdo into a reality. In designing and developing that dream, our team was inspired by two things of great importance to the people and culture of Korea, education and golf. So, we built the remarkable Chadwick International School and worked with our good friend and partner Jack Nicklaus to develop a beautiful Jack Nicklaus Signature golf course, which served as the location for the 2015 President's Cup. I have a deep admiration and appreciation for the Korean people, but I cannot let POSCO E&C further damage my family's name and our business. We are determined to resolve this matter and trust that the reform-minded Administration of President Moon Jae-in will support the recovery of the losses we incurred due to the actions of POSCO E&C and the prior Government."
Arbitration before the ICSID requires a 90-day notification period before official proceedings begin. Gale will issue regular updates on this and the company's other actions.
About Gale International
Gale, established in New York City in 1922, is one of the pre-eminent U.S. family owned real estate development companies. With multiple projects throughout America and the world, the company has achieved global recognition as a best-in-class, full-service real estate business and the foremost expert in smart, sustainable city-scale development. http://www.galeintl.com/
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