President hails LG-SK battery dispute settlement
A day after U.S. President Joe Biden declared the last-minute settlement between LG Energy Solution (LGES) and SK Innovation (SKI) a victory for Washington’s efforts to construct a solid supply chain for electric vehicles (EVs), President Moon Jae-in also hailed the closure.
“It’s fortunate that LGES and SKI settled all legal disputes. When it comes to the core meaning, the settlement has its importance in terms of pursuing collaboration between constituents in the local ecosystem based on mutual trust, while competing with each other,” Moon wrote on social media Monday.
“From the standpoint of the national interest and long-term profits for individual companies, the settlement between the two companies is of significant importance,” the President added. “I hope Korea’s secondary battery industry including LGES and SKI will develop rapidly so as to lead in the development of eco-friendly EV industries. The government will embrace the settlement as an opportunity to strengthen collaboration between interested parties within the relevant ecosystem.”
A senior presidential aide told reporters the government “did a lot” to settle the dispute, with the presidential chief of staff and secretary for economic policies taking roles assigned to close the issue.
LG Chem, the parent company of LGES which was spun off last year, claimed SKI had stolen its battery-related intellectual property by hiring away LG’s experts, in order to win more battery orders from top-tier clients such as Volkswagen. SKI denied the allegation. LG brought the issue to the United States International Trade Commission (USITC), which finally ruled in its favor.
The U.S. Trade Representative reviewed the USITC results before a White House deadline to veto the ruling, as the issue had become an economic matter with SKI was constructing a multi-billion-dollar plant in the U.S. state of Georgia, considered a linchpin for President Biden’s green growth initiative. This led to SKI officials lobbying the White House to veto the USITC ruling.
However, the companies agreed to drop litigation both in the United States and South Korea and not pursue further lawsuits for a decade, after SKI agreed to pay LGES $1.7 billion in cash and royalties. Previously, LGES was said to have asked SKI for more than $2.5 billion.
On a related note, LGES CEO Kim Jong-hyun told his employees the settlement was an illustration of LGES’ victory in its battery patents and how they will be protected within international legal frameworks.