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OPUS2

Elliott Associates, L.P. v Republic of Korea

Day 4

November 18, 2021

Opus 2 - Official Court Reporters

Phone: 020 3008 6619

Email: [email protected]

Website: https://www.opus2.com

[Page 1]

Thursday, 18 November 2021

(8.00 am)

MR [Redacted] (continued)

Cross-examination by MR PARTASIDES (continued)

(Evidence given through an interpreter)

THE PRESIDENT: Good morning, ladies and gentlemen. We are ready to start after a few technical issues.

Any case management issues that either side would like to raise?

MR PARTASIDES: Not on our side at this point, Mr President.

MR TURNER: Not on our side this morning, sir.

THE PRESIDENT: Very good. So we go on. Mr Partasides?

MR PARTASIDES: Thank you, Mr President.

Good morning, Mr [Redacted]

A. Good morning.

Q. Let's pick things up where we left them yesterday. We were looking at the letter that you drafted for Chairman [Redacted] of the Experts Voting Committee on 11 July, the day after the Investment Committee meeting, in which, amongst other things, a meeting of the Experts Voting Committee was to be convened on 14 July, the following Tuesday, after that Friday, 14 July 2015. Do you remember that?

THE INTERPRETER: Before I offer the translation, could I ask someone to log into Opus transcript for me,

[Page 2]

thank you.

A. Yes, I do remember.

MR PARTASIDES: Let's turn together to tab 18 of your bundle. This is {C/469/12}, please, in the English and in the Korean.

A. Which page was it, please?

Q. Page 12. Again, Mr [Redacted] you will see if it helps the relevant page on the screen in front of you?

A. Yes, I'm looking at it, thank you.

Q. To remind ourselves, this is where you, in answer to the prosecutor's question, expressed your anger at the decision taken by the Investment Committee without the Experts Voting Committee on 10 July, and I want to focus on the second paragraph of your reported answer which you say that:

And you remember that we discussed that yesterday?

A. Yes, I do remember.

Q. Now, let's just all remind ourselves who Director [Redacted] from the Ministry was.

Members of the tribunal, it may help at this point

[Page 3]

for you to be making use of the demonstrative that we provided you with. We will also provide one to the witness.

So that we are all clear, the Mr [Redacted] I'm told it's pronounced, that we are discussing here, you see in the red box, the Ministry box, in the middle of our demonstrative, it is Mr [Redacted] the Director of Pension Finance within the Department responsible for pensions within the Ministry of Health and Welfare. It is that Director [Redacted] that we are discussing here.

Mr [Redacted] could you confirm that the Director [Redacted] that we are discussing here is the man whose photograph you see at the far right of our red box on the demonstrative?

A. I do remember Mr [Redacted]'s name. I don't think the photo is an accurate representation of his face, but anyway, I remember his name.

Q. We are all used to using slightly older photos of ourselves, myself included, on the Three Crowns website. But I think we are talking about the right person.

Now, Director [Redacted]'s outrageous behaviour before the meeting continued during your meeting on 14 July, didn't it, Mr [Redacted]

A. Can you put it to me again, please?

Q. Yes. Director [Redacted]'s outrageous conduct before the

[Page 4]

meeting continued during your meeting on 14 July, didn't it, Mr [Redacted]

A. I could not say that all of his conduct and comments at that meeting of which he made many were outrageous. So if you could kindly point out for me which specific conduct you are referring to, I think I'll be able to offer an assessment on whether it was outrageous or not.

Q. I'm about to do that, but have I understood correctly that you considered some of his conduct at that meeting to be outrageous?

A. Yes, it is correct that that was my position regarding some of his conduct and comments made at that meeting.

Q. Indeed, if we look further down this same page of the meeting minutes -- sorry, of the statement that you made to the Special Prosecutor in December 2016 to your last answer on this page, Mr [Redacted] we see that you said to the Prosecutor that he:

You remember saying that to the Prosecutor, Mr [Redacted]?

A. Yes, that's correct.

Q. You expressed the same view in your first statement to the General Prosecutor as well; isn't that so?

[Page 5]

A. That's correct.

Q. Let us turn to that first statement report. It's at tab 17, exhibit C-459, and I'll ask you to turn your attention to page 11 {C/459/11}.

A. What was the page number again on tab 17?

Q. Page 11.

A. Yes, I'm on that page.

Q. If I could ask you just to take a moment to familiarise yourself with the record of what you said to the General Prosecutor.

A. Yes, I have read it.

Q. And if I can summarise, we see that [Redacted] this is from the top of that page -- [Redacted] You record that [Redacted] and you go on in your answer to the final question, which was: [Redacted] to say [Redacted] and if we read your final answer to the final question, you state again to the General Prosecutor that [Redacted] and if we turn over the page to {C/459/12}, that [Redacted]

[Page 6]

So my question to you, Mr [Redacted] is to confirm that Director [Redacted] remained uncooperative throughout the meeting; yes?

A. In terms of overall attitude, one could say that he was uncooperative.

Q. Now, he was there ostensibly in the capacity of administrative secretary to the committee meeting, but the truth is that Director [Redacted] was a senior official within the Ministry of Health and Welfare; yes?

A. That is correct.

Q. He was the director of the Ministry's Pension Finance department; yes?

A. That is my understanding.

Q. And you agree that that is not a junior position, is it?

A. I am not in a position to make that kind of an assessment. However, at that meeting I did not treat him as a director of the Ministry of Health and Welfare, but rather my relationship with him at the meeting was with the administrative secretary to the Special Committee.

Q. Do you know why [Redacted] has not been offered as a witness in this case, Mr [Redacted]?

A. No, I do not know at all.

Q. Let us continue with your answers to the General

[Page 7]

Prosecutor on page 12 of exhibit C-459. {C/459/12} This is tab 17, the same exhibit. We see that the next question at the top of page 12 that you were asked by the Prosecutor is:

If I could ask you to familiarise yourself with the answer you gave to that question, and then I'II ask you some questions about it.

A. Yes, I have read it.

Q. We see in your answer, Mr [Redacted] that you say -- this is on the fourth line in the English version:

Do you see that?

A. Yes, I see it.

Q. Now, you told us yesterday that you were the lawyer on the committee and that Chairman [Redacted] often asked you for legal advice. Am I to understand that you helped the committee reach the conclusion that the procedure was unlawful?

A. My initial impression was that this procedure was unlawful and the term that I used in the notice to convene the meeting on July 14 was a 'violation of the regulations'. That was the expression I used in the notice.

[Page 8]

So my thought from a legal standpoint was that there had been a violation of the regulation, but in the course of discussion at the committee, I changed my mind.

Q. Yes. Well, let's take this change of mind step by step, Mr [Redacted]

If we continue on the fifth line of your answer to the Prosecutor, we see that [Redacted] we see that:

Let's pause there. Do you remember [Redacted] persistently stopping you from inserting the word "unlawful" and saying that it would lead to serious consequences?

A. Yes, I do remember.

Q. With his references to "serious consequences", sir, what was he referring to? Serious consequences for who?

A. I remember them making their appeal to us that if it is assessed as being 'unlawful', then as public servants they would be held legally responsible for the illegality

Q. Who would be held legally responsible, Mr [Redacted]?

[Page 9]

A. Well, there was no mention of the party that would be held liable and I recall it being a general expression that as public servants, they would be at risk.

Q. Then you go on to say in the very next sentence:

Am I to understand that you changed the outcome of your meeting as a consequence of the intervention of Director [Redacted]?

A. One might understand it that way, but in actuality there were some parts to what Mr [Redacted] said that were reasonable and we believed that it was worth taking into consideration.

In past committee meetings, we had never accepted making an unreasonable decision even when there was a request to do so. So in this decision as well there was an appeal and we found that there was a rational point or reasonable point that he was making that we came on to later on which we decided to accommodate.

Q. So you are telling us that at the same time on the one hand he behaved so outrageously that you wished for him to be removed from the meeting, but at the same time he was making some reasonable points that persuaded you to change the outcome of the meeting; have I understood your evidence correctly?

[Page 10]

A. Yes, among the various conducts of Mr [Redacted] there were the unreasonable and outrageous aspects, but there were also in his opinions and position points that were reasonable.

Q. Director [Redacted] was worried that if you issued a statement saying that the Investment Committee's decision was unlawful, this might result in the reversing of the Investment Committee's decision; isn't that right?

A. I have no way of knowing what Mr [Redacted] thought internally.

Q. The reason I said that, Mr [Redacted], is if we turn back to page 11 {C/459/11} of the same minutes, we see that in your answer to the first question on that page asked by the General Prosecutor [Redacted] you appeared to be able to explain Director [Redacted]'s motivation then by saying:

So it appears that you were able to anticipate his discomfort; yes?

A. In terms of Mr [Redacted]'s actions and words, he was opposed and concerned that if the Special Committee decided or

[Page 11]

worked in a way to overturn the Investment Committee's decision, or issued a negative opinion of the Investment Committee's decision, that would be onerous. So that was the concern for -- concern of Mr [Redacted] as seen in his conduct and words according to my recollection and assessment.

Other than that, I do not know his internal motivations or reasons.

Q. What do you mean by "onerous", Mr [Redacted] and for who?

A. The first item on the agenda of the Special Committee meeting was whether to overturn the Investment Committee's decision. Chairman [Redacted] as well, when we were working on sending out the notice to convene the Special Committee meeting, had asked me whether it was possible for us to overturn a decision of the Investment Committee in which it voted in favour of. When we were preparing the notice to convene the meeting of [Redacted] the Special Committee, we reviewed the relevant regulations and confirmed that there was no basis in the regulations for us to overturn the Investment Committee's decision, and to do so, to overturn the Investment Committee's decision, would be problematic from a legal procedural standpoint, and so I was opposed to this.

So if you look at the agenda for the meeting as seen

[Page 12]

in the notice of convocation of the Special Committee, the vote on the proposed Samsung-Cheil Industries merger is not on the agenda. Rather, the meeting is being convened to establish the Special Committee's position regarding the decision as of 14 July made by the NPSIM, the investment management.

This is why the wording of the agenda is precisely crafted with caution. The meeting was being convened to establish the position of the Special Committee, not the Samsung C&T and Cheil Industries merger.

Regarding the first item on the agenda of the meeting held on 14 July by the Special Committee, it was -- regarding the topic of whether to overturn the decision made by the Investment Committee, and after a debate in the course of which I put forward my opinion, we came to the conclusion that there was no legal basis for us to overturn the decision, and it would not be possible for us to deliberate an item that had not been referred to us.

So the merger vote itself was not a topic or subject of discussion at all at that meeting.

Q. Let me return to my question, Mr [Redacted] which you did not answer.

You said in response to my prior question that if the Special Committee decided or worked in a way to

[Page 13]

overturn the Investment Committee's decision or issued a negative opinion of the Investment Committee's decision, Director [Redacted]'s view is that that would be onerous. That was your evidence. And I asked you what do you mean by "onerous", Mr [Redacted] and for who, and I repeat that question.

A. When we were discussing the possibility of overturning the Investment Committee's decision, Mr [Redacted]'s position was that it could not be overturned, and so our decision was not reached because Mr [Redacted] felt it would be onerous or burdensome, but rather we reached our decision because there was no relevant basis in the regulations. While it was of concern to Mr [Redacted] we found there was basis in the regulations in [Redacted]'s concern that the Special Committee could not overturn the Investment Committee's decision.

Q. Let's continue with your answers to the prosecutor's questions, Mr [Redacted] because if we turn to your final answer to the final question on page 12 we see that [Redacted] but you also tell us there that [Redacted] do you see that? {C/459/12}

[Page 14]

A. Yes, I'm looking at it.

Q. You decided to delay your statement until after the SC&T shareholder vote because you were concerned that it may have an impact on the outcome of that vote; isn't that so?

A. That's correct.

Q. And you did delay your statement until after the general shareholders' meeting took place on 17 July. That's right, isn't it?

A. Among our conclusions there were points that were announced prior to the shareholders' meeting. There were points that were announced after the shareholders' meeting.

What was announced prior to the general shareholders' meeting or prior to the shareholders' meeting was that the NPSIM had not requested that the Special Committee deliberate the proposed Samsung C&T merger and as a result the Special Committee was unable to deliberate or make a determination on this because it was never requested to do so.

That was the conclusion that we announced before the shareholders' meeting. As for the procedural issue, which was the topic of a legal debate, and it was -- there was a discussion or debate taking place regarding the vote itself, and announcing this at this date would

[Page 15]

have an influence one way or the other. So this is why this was announced after the shareholders' meeting.

Q. When you say it would have an influence on the shareholder vote one way or another, it may have an impact on support for the merger; isn't that so?

A. Whether it be in favour of or against, I believe there would have been an influence or impact, yes.

Q. Mr [Redacted] are you asking this tribunal to believe that your criticism of the procedure within the NPS decision-making would likely have led to greater support for the merger? Is that your evidence to this tribunal?

A. When a shareholder decides whether to exercise a vote in favour of or against, there are many things to consider. Because we considered that the announcement of the Special Committee's position on the procedural issues was a factor that could impact the votes in any way, whether it be in favour or against, we did not consider whether it would lead to more in favour or more against. However, in any case, we were of the position that we should not exert undue influence at the shareholders' meeting. That is why we decided not to announce it before the shareholders' meeting.

Q. Okay.

A. And at the meeting itself it was never discussed whether our announcement would have an impact more on the vote

[Page 16]

vote in favour or or the vote against.

Q. Did Director [Redacted] encourage you to delay your press release of criticism of the decision within the NPS, Mr [Redacted]?

A. That, I have no recollection of, but the members had a considerable discussion on how to make the announcement. As always, we decided on what to announce prior to the shareholders' meeting and what to announce after the shareholders' meeting by majority vote.

Q. Let's turn to tab 20 in your bundle. This is exhibit C-486, {C/486/1}.

A. Yes.

Q. Now, we don't have the benefit of Mr [Redacted] with us, Mr [Redacted], but we do have the benefit of his statement report to the Korean Prosecutor that he gave in January 2017. This is a redacted version of that statement report port that the Republic of Korea provided to us on order of the tribunal in document production in this case, simply to identify the document for you.

So the individual, I represent to you, who is answering the question that we see on page 23 is indeed none other than Director [Redacted] {C/486/3}. I'll ask you to take a moment to familiarise yourself with this document.

A. Yes, this is the first time I am seeing this document.

[Page 17]

Q. You've described the intervention of Director [Redacted] in your two witness statements in these proceedings at length, Mr [Redacted] but you are telling us that you have never reviewed his evidence to the Korean Prosecutor in preparation of giving evidence in this case; is that right?

A. This is a record from a criminal court case which I do not have access to and, furthermore, in the course of preparing to give evidence in this hearing, counsel did not show me this document.

Q. Let me ask you one question about it and see whether you are able to answer that question, and if you are not, I would fully understand.

A. Yes, please do.

Q. We see that Director [Redacted]'s answer to the Prosecutor in January 2017 was as follows:

My question is this for you, Mr [Redacted]. Can we agree that we wouldn't normally expect an administrative

[Page 18]

secretary to intervene and change the outcome of a committee's deliberations?

A. An administrative secretary does not have a voting right. However, I do believe that the administrative secretary can offer his or her opinion or information for the reference of the members of the committee in their decision-making process.

Q. We've looked at the record of the statements that have been made, including two statements by you to the Korean Prosecutor, sir. Let's now compare those statements to the evidence that you have submitted to this tribunal.

My first question for you is: I'm correct, aren't I, when I say that you didn't refer to your statement reports to the Korean Prosecutor at all in your first witness statement in this arbitration; isn't that right?

A. Yes, that is because the first witness statement was prepared based on my recollection without having read the prosecutor's statement report.

Q. We obtained those statement reports after your first witness statement was submitted and before our second round Reply, and then you filed a second witness statement in which you did address some of the statements we relied on in your statement report. Are you aware that you did seek to address these statement reports in your second witness statement, Mr [Redacted]?

[Page 19]

A. Yes, while preparing my second witness statement I did look at the prosecutor's statement report.

Q. Let's turn to your second statement and see what you say about it. Let's begin at paragraph 8. You will find it at tab 2 of your bundle, sir. {E/2/5}

If we begin at paragraph 8 on page 3, let's walk through this section of your second witness statement together.

A. Yes, I'm on it.

Q. So here you tell us in paragraph 8 that you understand that the Claimant has relied on the record of your statements to the Prosecutor to say that Director [Redacted] obstructed discussions and censored public statement. Do you see that in the middle of your paragraph 8?

A. Yes, I see it.

Q. And if we move on to paragraph 9 you testify to this tribunal that you do not agree that Director [Redacted] attended the meeting in order to interfere; yes?

A. Yes, that is because I have no way of knowing what their motivations or purpose in attending the meeting is. But I believe that as whereas sometimes the administrative secretaries participate in the meetings, sometimes they do not, but in any case it is within their authority to participate or attend the meeting of the committee.

Q. When you say you do not agree that he was there to

[Page 20]

interfere, you are telling us in effect that you do not agree with what you told the General and Special Prosecutor; isn't that right?

A. I do acknowledge that Mr [Redacted] participated and attempted to intervene in the proceedings, but I do not accept anyone who says that Mr [Redacted] interfered with or had an impact on or controlled the proceedings of the Special Committee. That I cannot acknowledge. I believe that the Special Committee made its own decision in an independent and reasonable manner.

Q. And in explaining why you do not agree with what it seems you told the prosecutor before, you rely and emphasise on Director [Redacted]'s capacity as an administrative secretary, gansa, in your paragraph 9; yes?

A. That's correct.

Q. And in your paragraph 10 you go on to describe the formal role of an administrative secretary under Article 6 of the operational guidelines. Is that another article that you were provided with selectively, Mr [Redacted]? {E/2/6}

A. That's correct.

Q. Let's move now to paragraph 11 and your first sentence.

A. Yes, I have read it.

Q. There you say:

[Page 21]

"On reflection, I do not think Director [Redacted]s participation in the 14 July meeting went beyond the scope of administrative secretaries' duties."

When you say "on reflection", Mr [Redacted] what you are telling us is you are reconsidering your own very detailed description of Director [Redacted]'s interventions to the Korean prosecutors; isn't that right?

A. No, that is not it. I think there's a misunderstanding because a short sentence was all that was offered to describe what happened throughout the course of the entire six-hour meeting, just a term 'tried to interfere' was was used in that short sentence. And I think we should distinguish between his participation or attendance in the meeting itself as opposed to the many comments he made and the conducts he showed at the meeting.

Some of them were appropriate, some of them were inappropriate or overstepping the boundaries. But in any case the appropriateness and the inappropriateness were mixed together.

So I don't think that his participation in itself was an obstruction or intervention. I do not find [Redacted] a problem with his participation itself. I think we need to be more detailed in distinguishing between his comments and conduct as opposed to his attendance at the

[Page 22]

meeting. What was due or undue and what were the attempts to intervene need to be clearly distinguished and clarified.

Q. Mr [Redacted] would you accept that your description of the meeting to the Korean Prosecutor was very different from the way in which you have described that meeting as a witness for the Republic here to this tribunal?

A. No, I do not accept. Because the prosecutor used just the one line to describe the whole six-hour meeting and in my second witness statement I offered my assessment on parts of the entire course of the day's meeting. So I believe that the contents of my second witness statement are more accurate.

Q. Very well. Let's just conclude, Mr [Redacted] with one final document. It's again your second statement to the Prosecutor, tab 18, {C/469/21}.

A. What was the page number again, please?

Q. It's the final page, page 21, just before your signature confirming the accuracy of the report on page 22 {C/469/22}.

A. Yes, I'm on it.

Q. We see at the top of that page the Special Prosecutor asks you the following question:

Do you see that?

[Page 23]

A. Yes, I see it.

Q. And you give a long answer which we will come to, and in particular I want to turn your attention to your conclusion. In your final sentence you say:

Do you see that?

A. Yes, I see it.

Q. Now, in your lengthy answer, Mr [Redacted] you are not reported as having disagreed with the Korean Prosecutor that these actions by the Ministry and the NPS were illegal, are you?

A. I'm not in a position to either agree or disagree with a legal determination made by the prosecutor. The key point of my answer is in order for the Special Committee to make a fair decision in a rational manner by exercising its expertise, it should be independent from undue influence from the outside, whether it be Samsung or the State.

To allow the members to make such a decision in a fair way would be to not damage the intent based upon which the system of the Special Committee was established, and the prosecutor's question itself is

[Page 24]

leading in a way because I have no way of knowing the internal decision-making process of either the Ministry of Health and Welfare or the NPSIM.

However, I do believe that it would be wrong if either Samsung or the State have worked to undermine the intent of the system of the Special Committee.

MR PARTASIDES: Thank you, Mr [Redacted]

THE PRESIDENT: Any questions in redirect?

MR TERCEÑO: Yes, Mr President, thank you. We do have a couple of questions on redirect that we hope to be able to get through fairly quickly.

Re-examination by MR TERCEÑO

MR TERCEÑO: Good morning, Mr [Redacted] You were asked yesterday if you were aware of the Fund Operation Committee that formally appoints members of the

Experts Voting Committee and in response you said:

"Answer: I believe there's something called the operational regulations of or for the Special Committee. If you could kindly show me that document, the operational regulations.

Do you recall that testimony?

A. Yes, I do recall.

Q. So counsel opposite then said that he would take you to those guidelines and he took you to exhibit C-194 which are the National Pension Fund Operational Guidelines.

[Page 25]

I would like to give you a copy of exhibit R-98 which are the regulations on the operation of the Special Committee on the exercise of voting rights. And we have some hard copies we'll hand out.

A. Yes, I'm looking at it.

Q. Now, these were not shown to you yesterday and they are not in the cross-examination bundle that you have in front of you, but is this the document you meant when you made reference to the operational regulations for the Special Committee? {R/98/1}

A. That is correct. This regulation is the one that was distributed to the members of the committee at every meeting.

Q. Thank you, a short time ago counsel opposite was asking you about paragraph 10 in your second witness statement which references Article 6 of the operational regulations and he asked if this was another article that had been "selectively provided" to you. Is the reference in your witness statement to Article 6 in these Special Committee operational guidelines at exhibit R-98?

A. That is correct.

Q. Thank you. Now, I would like to just take you back briefly to tab 15 in the cross-examination bundle. This is exhibit {C/427/1} which you have been shown?

[Page 26]

A. Yes, I'm on it.

Q. Counsel opposite read a paragraph near the bottom of this and after doing so noticed -- mentioned that we see a reference to the guidelines on the exercise of the National Pension Voting Rights of 2014. He did not read what that reference was. But you see near the bottom of this email that the reference is specifically to Article 8(2) in chapter 3 of those guidelines; do you see that?

A. Yes, I see it.

Q. Do you recall what Article 8(2) says?

A. I recall having seen this often and I believe it is almost the same as Article 2 of the operational regulations.

Q. Let's look at Article 8(2). It's exhibit R-57. It's tab 22 of the cross-examination binder. {R/57/1}. If you look at the second page of Article 8(2)?

A. Yes, I'm on it.

Q. You can just read the Korean along with me. It says:

"For items which the committee finds difficult to choose between an affirmative and a negative vote, the NPSIM may request for a decision to be made by the Special Committee on the exercise of voting rights (hereinafter referred to as the 'Special Committee')."

A. Yes, I'm reading it.

[Page 27]

Q. Now, having taken a look at that, if I can direct you to tab 16 of the cross-examination binder, this is exhibit C-429 {C/429/1}. You were also shown this exhibit yesterday; do you recall?

A. Yes, I am on that page.

Q. First, if you turn to page 4, there are regulations attached to this letter {C/429/4}, and these are the Special Committee regulations that I just showed you at exhibit R-98; is that right?

A. That is correct.

Q. Turning back to the first page {C/429/1}, at the bottom you see that again this letter repeats the reference to Article 8(2) in chapter 3 of the method of exercise of the guidelines on the exercise of the National Pension Fund voting rights of 2014; do you see that?

A. Yes, I see it.

Q. If you look at this letter on the third page {C/429/3}, you see in the second paragraph that the letter reads:

"I have decided to convene of a meeting of the Experts Voting Committee as follows in accordance with the regulations on the operation of the Experts Voting Committee (Attachment 1) given that seven of our members have demanded an urgent convocation of the Committee under the shared recognition of the above circumstances, with which I, Chairperson of the

[Page 28]

Committee, also agree."

Can I ask you to turn to {C/429/5}. At the top we see [Redacted] and this is Article 5(2) of the Special Committee regulations. It reads:

"A meeting of the Committee may be convened by the Chairperson under any of the following circumstances.

"1. The Chairperson determines that a meeting is necessary;

"2. Three or more Committee members demand a meeting ..."

Mirroring the language used in the letter that seven had demanded the meeting.

A. Yes, I'm on it.

Q. Mr [Redacted] my question for you is: having reviewed those letters and these guidelines, including this Article 5(2) of the Special Committee regulations, does this refresh your recollection as to the basis that was relied on in the relevant rules for calling the July 14 meeting?

A. Yes, I do.

Q. And what was that basis?

A. I believed at the time that in this instance two of the conditions under Article 5(2) had been met to invoke the chairman's right to convene a meeting, namely the chairman deemed that it was necessary and that three

[Page 29]

members or more of the committee were requesting that a meeting be convened.

So that is why in the letter of convocation we inserted the reference to the seven members requesting that the meeting be held, and also that the chairman was in concurrence with their opinion regarding the necessity of convening the meeting.

So that is why we invoked the chairman's right to convene the meeting as seen in the draft based on subparagraphs 1 and 2 of paragraph 2 of Article 5.

Regarding the items on the agenda, we were unable to apply paragraph 4 of Article 2 which is the reference to the matters that it finds it difficult to determine. Rather, we relied on paragraph 6 which refers to the chairman's recognition of the need to hold the meeting as well as the agenda item, and that was reflected in the notice of convocation of the meeting.

So that is why we summarised that the agenda to deliberate was the Special Committee's position on the NPSIM's decision as of 10 July.

MR TERCEÑO: Thank you, Mr [Redacted]

Mr President, we have no further questions.

THE PRESIDENT: Thank you, Mr Terceño. There will be questions from the panel.

Questions from THE TRIBUNAL

[Page 30]

MR GARIBALDI: Mr [Redacted] on re-direct examination you have been shown document R-98 by counsel to the Republic of Korea. These are the regulations on the operation of the Special Committee on the exercise of voting rights {R/98/1}. Do you still have that document?

A. Yes, I do and I'm looking at it, sir.

MR GARIBALDI: Thank you. Is it fair to say that the functions of the administrative secretaries are regulated by Article 6 of these regulations? Is that right?

A. I'm afraid I fail to precisely understand the intent of the question, but I do understand the role of the administrative secretary is defined in Article 6.

MR GARIBALDI: Well, that was my question.

Now, I believe you testified on cross-examination that it was appropriate for the administrative secretary, in this particular case Mr [Redacted] that it was appropriate to offer his opinions on matters before the Special Committee. Is that correct? You testified to that effect?

A. Yes, I believe he can put forth his opinion.

MR GARIBALDI: Would you please tell us on what provision of Article 6 do you base your opinion that the administrative secretary has the right or the power to express his opinions, especially on a matter when the

[Page 31]

opinions are not requested or welcome?

A. In all the deliberations of the voting right, the administrative secretaries are involved in the submission of the agenda. So in terms of the subparagraphs, I think subparagraph 1, 2 and 4 apply. The first is regarding submission of the agenda items. The second is assistance in the operation of the committee. The fourth is the provision of the relevant documents and materials.

There are other subparagraphs that qualify, but if information or opinion regarding a deliberation item is needed, then based on subparagraphs 1, 2, 4 and 6, or based upon request from the committee members, in other words the committee can ask the administrative secretary what his or her opinion is.

So I think that multiple provisions or subparagraphs can qualify or apply in this example, and the [Redacted] administrative secretary has offered his or her statement or opinion or belief on the matters when asked to do so, and that is what actually happened at these meetings.

So -- and when they did so at these meetings there was never any objection regarding the role of the administrative secretaries, and when the necessary information or opinion was offered by them, the

[Page 32]

committee did not raise any objections. Rather, they took into reference any points that they had that were reasonable and were acceptable.

So the committee was selective in deciding which points or opinions offered by the administrative secretaries to accept.

MR GARIBALDI: Thank you. No further questions.

MR THOMAS: Just a follow on to the question from my colleague, Mr Garibaldi.

Can you explain to us how the chairman ran this meeting? Did he sit there passively? How did he run the meeting?

THE INTERPRETER: Before I translate your question, Mr Thomas, can I just point out that in the last response it was committee was "selective", not "selected". Now here goes the question.

MR THOMAS: My question is simply this. To the best of your recollection, how did the chairman run the meeting that we're concerned with?

A. The chairman was also a member of the committee. So, regarding the agenda item, he made sure that we became sufficiently aware of all the necessary information. He allowed the members to put forth their opinions sufficiently, whether it be a differing opinion or a discussion.

[Page 33]

Regarding the discussions, they lasted for a long time and -- so in many instances the initial thoughts or opinions of the members would change in the course of the discussions and the position of the organisation that was making the recommendation was taken into consideration but it was not necessarily reflected.

I believe that the members of the committee exercised their powers of reason and determination with their respective expertise to freely and independently make decisions that we believed served the best reasonable interests of the NPS.

Many of the agenda items that we deliberated involved serious interests. So if necessary, the members would be subject to people's requests or materials being provided or people trying to put in a good word. But in actuality the members of the committee, in spite of these various opinions and perhaps pressure, did their best to exert efforts to arrive at a reasonable and independent decision, and that is what we did for the most part in reaching our decisions, I believe.

MR THOMAS: Mr [Redacted] it's my fault for the way in which I phrased the question. What I was trying to understand was this.

From reading your statement to the General

[Page 34]

Prosecutor and the Special Prosecutor, you made comments about Mr [Redacted]'s intervening and you also of course made the comment that the Special Committee members were very angry at what had happened.

What I was trying to understand about this particular meeting is how did the chairman control the meeting? It's a specific question for this meeting. How did the chairman control the meeting? For example, did he tell Mr [Redacted] to be quiet at any point or did he let him speak freely and interrupt other members? How was the meeting run, is what I'm trying to get at?

A. The meeting on 14 July went on for a long period of time and Mr [Redacted] did try to carry his opinion through. However, the meeting was held although there had been no cooperation in the hosting of the meeting. And even regarding how the meeting was run and the decision-making, Mr [Redacted] did try to carry his intention through but the decision was not made according to his wishes. In fact, I think the committee members collectively reached a reasonable decision that was made independently without the influence of Mr [Redacted] There was a free discussion and if it became excessive, there may have been instances in which it was quieted down, but all in all it was insufficient to obstruct a reasonable decision-making process.

[Page 35]

MR THOMAS: Thank you very much.

THE PRESIDENT: Thank you, Mr [Redacted] This concludes your examination.

Let's break now for ten minutes. We will continue at 9.55 and it will be Professor Lee. I understand he will be making a presentation instead of a direct examination, I understand. Thank you.

(9.42 am)

(A short break)

(9.55 am)

PROFESSOR CHOONG-KEE LEE (called)

THE PRESIDENT: We understand the parties have agreed that the presentation of Professor Lee will be interpreted simultaneously. Is that --

MR PETROCHILOS: For the presentation in lieu of examination-in-chief, that's correct, Mr President.

THE PRESIDENT: And then the cross-examination will be interpreted executively as before?

MR PETROCHILOS: That is my understanding and the same will apply to Professor Kim who follows.

THE PRESIDENT: Very good. So we need the headsets then.

MR PETROCHILOS: Mr President, simply as a point of formality, I believe there are no corrections that Professor Lee intends to make to his reports which are in front of him, of course, but whatever pleases the

[Page 36]

tribunal, you may pose the question to him or I am happy to do so.

THE PRESIDENT: I was still planning to because he will make a presentation. So if he has corrections to make, he can make the corrections as he makes his presentation.

Professor Lee, good morning. Maybe somebody could help the Professor to find the right channel.

Good morning, Professor Lee. Do you hear me?

Sir, you have been called as an expert witness in this hearing. So I would kindly ask you to read the statement or declaration of an expert witness that you should have in front of you also in Korean.

THE WITNESS: I solemnly declare upon my honour and conscious that my statement will be in accordance with my sincere belief.

THE PRESIDENT: Thank you very much.

Professor, you don't need to wear the face mask unless you really want to. The rule only applies to those who are not speaking.

We understand you are going to make a presentation of your evidence instead of a direct examination. So, Professor, please, go ahead.

Presentation by PROFESSOR CHOONG-KEE LEE

PROFESSOR CHOONG-KEE LEE: Thank you very much. As was introduced, my name is Choong-Kee Lee and I have been

[Page 37]

called as a Korean law expert. It's a great honour to be here.

Next slide, please.

So if you look at this next slide, here you see my photo and a brief CV of myself.

In 2002, I was a member of the Advisory Committee for the enactment of the Indirect Investment Asset Management Business Act of the Ministry of Labour. And then the following year, under the Ministry of Labour, I was also a member of the Advisory Committee of the enactment of the Employment Retirement Benefit Security Act.

I'm not able to hear the Korean interpretation.

And then in 2006 I was a member of the Internal Evaluation Committee under the Financial Supervisory Commission and then I was a member of the Special Subcommittee for the Revision of the Trust Act under the Ministry of Justice in 2009 to 2010. Also when the Ministry of Justice was enacting the Enactment of Public Trust Act, I was a member of that subcommittee, and also currently I am a member of the Advisory Committee of the Public Trust.

Also currently I am a member of the Future Forum for the Fusion and Conglomeration of Autonomous Vehicles under the Ministry of Land, Infrastructure and

[Page 38]

Transportation, as well as the Ministry of Information and Technology.

Next slide, please.

So that was the brief introduction of my career and background. And this slide introduces the table of contents of my presentation.

I will first of all start with a summary of the differences in the two approaches between myself and the counterparties' expert.

My second item would be that the NPS is part of the ROK's administrative organisation under Korean law.

The third is that the NPS exercises powers entrusted to it by the State.

And the last point that I would like to make are the irregularities that exist in the process leading up to the NPS's vote on the merger at issue.

First of all, this table compares the different approaches between myself and that of Professor Kim.

I have actually compared the two approaches along four major points.

First, the question is whether the Korean law defines the concept of a State organ. Professor Kim is saying that a State organ is equivalent to the Korean term "guk-ga-gi-gwan". He says that only those entities defined in the Constitution and the Government

[Page 39]

Organization Act are these guk-ga-gi-gwan. However, my thoughts are different. My thoughts is that there is no express and determinative definition in Korean law that is equivalent to a State Organ as defined in international law.

According to my rough understanding of the international law concept of State organ, I think whether an entity in question performs State actions to fulfil State objectives and exercises State authority should be considered in determining whether an entity is a State organ.

According to what I was told by the attorneys, the concept of a State organ also includes organisations and entities that are recognised as a State organ under customary law. This actually spans a very wide scope of organisations according to what I have been told. Also whether it is expressly defined as a State organ or not is not an important factor in determining whether an entity is a State organ or not, is what I have been told. Whether an entity has a legal personality or not, I have also been told is not an important factor. And therefore a central bank or a national oil company or a social security entity may also become a State organ, is what I have been told.

Now, regarding this concept of a State organ,

[Page 40]

a recent arbitration tribunal determined that KAMCO of Korea was a State organ, is what I have been told.

Now, according to Professor Kim's opinion, KAMCO would not fall under a State organ per se.

Now, the second point that I would like to compare is the scope of administrative organisations in Korea.

Now, central administrative agencies prescribed under the Government Organization Act, these are the only organisations that constitute state administrative organisation, is the view of Professor Kim. I disagree because not only central governments -- central administrative agencies, but also local governments and public institutions would also form a part of the State, is my opinion.

I think it's very clear that local governments are part of the administrative organisation, but not only local governments, but by law there are entities that perform State affairs and exercise governmental powers or State authorities, and these entities would all be part or may be part of a state administrative organisation. Local governments, public institutions, have one thing in common, and that they have separate legal personalities, and they actually perform public actions.

The third point that I would like to compare is the

[Page 41]

significance of the functions that an entity plays in determining the status as a State organ. Professor Kim is saying that the functions an entity performs is not important. He ignores that.

I disagree. When determining whether an organ is a State organ or not is, I believe, very important.

The fourth point is whether the exercise of voting rights in respect to shares acquired by the fund. Professor Kim's opinion is that because NPS has its own legal personality, and this is NPS's act as a private actor, exercise of voting rights would also be a private act, and therefore the legal effects of that voting would also be attributed to the NPS.

I disagree because this is in connection with the State affairs of fund management, and therefore exercise of entrusted fund managing affairs and authorities conferred to the Ministry of Health and Welfare has been entrusted in the NPS and NPS is exercising that vote under the control of public laws, and therefore I believe that it is under the control of public law. Therefore, the legal effects of that voting would vest in the State. The NPS itself has taken this position according to my information.

Next slide, please.

As I just mentioned, there is the international law

[Page 42]

concept of a State organ and I have heard that that is described in Article 4 of the ILC articles and the commentaries thereto. According to this, it is said that whether an organ exercises legislatve, executive, judicial or other functions is not important. Also, it is said that whether -- what position it holds is not a question that needs to be asked.

Also, it is said that whether it has that status in accordance with internal laws, persons or entities would also be included. So regardless of kind or classifications, organs of government would fall under this concept. So -- and also it is said that the internal law of a State may not classify which entities have status of an organ.

So according to this international law concept of a State organ, actually this concept under international law does not exist under Korean law. The State organ under such international law is not a Korean law concept, and a direct analogy cannot be found in Korean law.

Therefore, whether the NPS is a State organ or not seems to be a question to be answered by the tribunal.

Next slide, please. So I would now like to turn to Korean law and how Korean law defines or scopes these administrative agencies.

[Page 43]

The Korean law does not exhaustively list entities that comprise part of the administrative branch of the government. There are actually two prevailing theories in Korean administrative law for defining what constitutes the administrative branch of government, and these two theories can be used to identify the scope, the targets of administrative control, and also identify what falls under the scope of various relief measures against administrative actions.

One of these theories is the deduction theory. According to the deduction theory, the administrative branch is what is left after defining the other easier to define governmental functions such as legislative and judicial functions.

The other theory is referred to as an active or result realisation theory. According to this theory, this defines "administrative" as the active and formative State activities that taken overall has consistency and are performed for the active realisation of a national objective.

Now, my approach is based on the foregoing understanding of international law concept of a State organ and also fundamentally is based in my understanding of Korean administrative law theories.

There are various characteristics of the NPS that

[Page 44]

need to be taken into account. One is that its basis of establishment is provided for under statute.

Also, the functions of the NPS are either mandated under statute or has been entrusted to the NPS by the minister and other higher government entities pursuant to that statute.

The governance structure of the NPS is also prescribed by statute and the budget, in other words the funding and the operation of the NPS is also prescribed by statute and is to be performed accordingly.

So therefore the NPS is established based on separate statutes and based on these separate statutes perform government functions and the NPS also exercises State authority and governmental powers.

When we consider these characteristics, I determine that NPS is a part of the ROK's administrative organisation.

Next slide, please.

This goes on to look into a bit more detail of why NPS is part of the ROK's administrative organisation. As I mentioned, NPS is a public institution established by the State pursuant to a specific legislation. The NPS's powers are based on the National Finance Act and the National Pension Act as well as subordinate regulations and the entrustment by the Minister of

[Page 45]

Health and Welfare.

The NPS also imposes mandatory pension contributions payable by Korean employees and employers. These pension contributions -- the premiums are a quasi tax nature.

Also, the Korean courts have determined that acquisition of securities through the NPS -- the National Pension Fund itself is an acquisition by the State, and when the NPS transfers shares certificates, that constitutes a transfer of the share certificates by the State.

Now, of course, the NPS manages and operates the National Pension Fund and that fund are the property of the State and therefore are not subject to corporate tax.

Next slide, please.

The NPS is part of the ROK's administrative organisation under Korean law and this is once again shown by this diagram of how the Minister of Health and Welfare entrusts his powers and also maintains the right to -- right of oversight and supervision.

The minister has his own inherent national duty of managing and operating the National Pension Fund which has been entrusted to the NPS and as the party that places this State affair in trust of -- to the NPS, the

[Page 46]

minister continues that oversight over the NPS.

Next slide, please.

I will observe what duties the minister has under the National Pension Act, the NPA, and how he exercises his oversight powers.

First of all, under the NPA the minister is in charge of the National Pension Service which is operated in order to satisfy the constitutional mandate of providing social security.

So there is the Constitution that requires that the State provides social security and the minister has -- is in charge of operating the National Pension Service as a way of implementing that constitutional mandate.

Also, the minister oversees the operation of that fund which has been entrusted by -- to the NPS.

He exercises this oversight by appointing all of the directors of the NPS. He also recommends the NPS chairman which is appointed then by the President of Korea. He also appoints the NPS's auditor and approves the accounting regulations of the NPS.

Also, the minister approves or may even order amendments to the NPS's articles of incorporation and also can take all measures that fall under his oversight powers. For example, he can order the NPS to submit reports to himself and he also has the power to inspect

[Page 47]

the NPS's services and property if he deems necessary.

Next slide, please. Furthermore, there are some structures that are prescribed by the National Pension Act with regard to the operation of the fund. The NPS's operational plan, the fund operational plan, must be approved by the operational committee under the Ministry, and also must be approved by the minister, and also the fund operational plan must receive the approval of the President.

The Ministry's Fund Operation Committee prescribes the NPS's operational guidelines and determines the fund's operation.

The Fund Operation Committee is chaired by the Minister of Health and Welfare and also comprises of four vice ministers from other ministries. So the Fund Operation Committee is a public entity.

Also, there are other characteristics that once again support the fact that the NPS is part of ROK's administrative organisation under Korean law the.

First of all, the NPS is a special statutory corporation that does not have capital. Therefore, the budget is fully borne by the national treasury.

The fund that the NPS manages actually belongs to the State. It is State property. So in conclusion, as I will be explaining shortly, the NPS is part of the

[Page 48]

State's administrative organisation and performs State affairs, and is under the oversight and supervision of the minister for all of the State affairs it performs and the officials of the NPS are subject to the same restrictions as government officials in many aspects, including bribery and corruption.

Now, I would like to turn to the topic of the fact that the NPS exercises powers entrusted to it by the State.

The NPS exercises powers regarding the management and operation of the fund, and these powers were entrusted to the NPS by the minister. Therefore, the management and operation of the fund, which is a State affair, would clearly be a part of that entrusted State power, including the exercise of voting rights which is part of that management and operation of the fund.

Therefore the effects of the NPS's exercise of voting rights clearly is attributed to the State as is the wise finding of Korean courts.

The NPS's exercise of voting rights, whether that would be subject to administrative litigation or not I think is irrelevant from this question, given the fact that even central government agencies can be subject to civil litigations depending on the act in question.

The NPS's exercise of power, I believe, is different

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from the actions of other ordinary private actors in the market in several aspects.

First of all, the Fund Operational Guidelines actually set forth the types and the scope of assets that the NPS is allowed to purchase or ways that the NPS is able to exercise its operational powers.

For example, regarding voting rights, there are detailed standards set forth in how that voting right may be exercised by the NPS, and these standards are not applicable to private actors in the private sector.

Also, the Fund Operational Guidelines specifies who the parties that are authorised to exercise these powers, which member of which committee has the power to exercise has all been set forth in advance by the Fund Operational Guidelines and regulations, and also it says that when an item, matter is difficult, then in those cases the Experts Voting Committee should exercise that, is already set forth in advance in anticipation of difficult matters.

Therefore, the NPS is also subject to oversight by not only the National Assembly, but the Board of Audit and Inspection, as well as the general public.

Therefore, these are characteristics that separate the NPS from other private actors that manage assets. These are clear differences between a private actor and

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NPS, even with regards to asset management.

The management of State property by the NPS is not a private transaction, and that is supported by various details that I will be going through.

First of all, when the NPS manages the fund, it is obligated to follow various principles, and these four principles that are set forth in the Fund Operational Guidelines is also supported by Article 64 of the National Finance Act which commands that such public funds be managed under these principles.

First of all, there is the principle of profitability that is set forth by the Fund Operational Guidelines, and rather than just requiring the maximising of profits, this principle of profitability requires that the reason for it is to alleviate the burden on the insured person, especially the future generation. Given the fact that this is a reserve fund for pension benefits, this is obviously a necessary principle.

There's also the principle of public benefit which requires that, given the fact that the accumulated amount of the fund constitutes such a significant overwhelming part of the national economy, it must be managed in consideration with a ripple effect that the fund will have on the national economy.

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This public benefit principle is something that you will not find in the principles of operating private funds. The same goes for the principle of liquidity.

The NPS, when it disposes of its assets, must be mindful of the impact that may have on the domestic financial market and must take measures in advance to minimise any impact on the domestic market.

And lastly, all of these four principles are protected by the principle of management independence that requires that the fund be managed according to the principles and should not be undermined for other purposes such as political purposes and other agendas which I will go into detail later on.

So my last point in my presentation is whether the NPS's vote on the merger in question had irregularities, which is my view, that the process had irregularities.

As I have been just explaining, the Investment Committee must refer difficult matters to the Experts Voting Committee under the Ministry of Health and Welfare, and that is a requirement because, as the Fund Operation Committee has set forth, if there is a matter that the Investment Committee finds difficult to determine regarding votes, it must -- it's expressly stated that the Investment Committee must refer that to the Experts Voting Committee.

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The Investment Committee -- no, I'll be talking about the Experts Voting Committee.

The Experts Voting Committee actually serves the function of being an important check and balance device against the -- to the Investment Committee. This is in anticipation of the event where the State would attempt to unfairly intervene and obstruct the due process.

I think this case highlights how the Expert Committee was intended to play that check and balance role.

So considering that role and purpose of the Expert Committee of being that check and balance, and also considering the SK merger that pre-dated the Samsung C&T and Cheil merger and how the Investment Committee referred the SK merger to the Expert Committee and how the Expert Committee deliberated and decided on that difficult matter, the SK merger considering that precedent, together with that check and balance role of the Expert Committee, I think we are able to determine roughly what will fall under a matter that is so-called difficult.

A difficult matter would be something that has controversial -- room for controversy and is a complex -- so the -- something that is difficult needs to be determined by considering the nature of the matter, the complexity of matter, as well as a public

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opinion.

I think this is an objective criteria, whether a matter is difficult or not is an objective standard.

So in the case of the Samsung C&T and Cheil merger, I believe that that was a highly difficult matter according to objective standards, and also, given the fact that the Expert Committee took the decisions on the SK merger, I believe that the Samsung C&T and Cheil merger should have been considered to be equally difficult matter.

However, as we all know, the Investment Committee did not take that matter to the Expert Committee, and after that the Expert Committee criticised the Investment Committee's decision not to refer the matter, and demanded that the Investment Committee refer the matter to the Expert Committee.

And also, in the internal procedures and process many people expressed their views that this definitely qualifies as a difficult matter, and as I understand, many people had strong opinions that this should be referred to the Expert Committee, and there was unfair pressure being -- until unfair pressure was exercised through the Ministry of Health and Welfare.

Some time after the merger I have been told that the Voting Guidelines were amended and the fact that the

[Page 54]

Voting Guidelines were amended reflects that the Voting Guidelines use the language of discretion, saying it may request, and this amendment was -- the purpose of this amendment was to remove that discretionary language from the Voting Guidelines.

Last slide, please.

As I mentioned during my presentation, regarding the irregularities in the process leading up to the NPS's vote, the principle of independence, I believe, is an important principle to ensure the other principles that govern the fund operation of NPS.

When managing the National Pension Fund, independence is a requirement and in order to abide by that principle of independence, there should not have been any pressure from the Ministry of Health or the Government.

Also, the CIO of the NPS, who is the person responsible for managing the fund, should not have ordered the creation of ungrounded synergies, so-called.

So once again, we see that members of the NPS have not followed or abided by the legal requirements that they are subject to and that alone also shows that there were irregularities in the process of the NPS's vote that violates and infringes upon the various independence requirements that is provided by not only

[Page 55]

the National Pension Act, but also the National Finance Act, and that completes my presentation. Thank you.

THE PRESIDENT: Thank you very much, Professor Lee.

Will there be any follow-up questions on direct?

MR PETROCHILOS: No, sir, thank you.

THE PRESIDENT: Thank you. Cross-examination, it will be Mr Terceño. Please.

Cross-examination by MR TERCEÑO

MR TERCEÑO: Thank you, Mr President.

Good morning, Professor Lee. My name is Joaquin Terceño, and I represent the Republic of Korea, which I might refer to as the ROK sometimes, the Respondent in this arbitration. I'll be asking some questions to start this morning and I'll then be handing over to my colleague, Sanghoon Han, who will have some questions about various Korean statutes before you come back to me later today.

You completed an LLM degree at Cambridge University in 1991 and received a PhD in law at Sheffield University in the United Kingdom in 1994; is that right?

A. Yes, correct.

Q. And those studies were conducted completely in English?

A. Correct.

Q. Now, I understand you have asked to testify in Korean

[Page 56]

today and that is of course your right. I would just like to caution you that assuming you understand my questions in English, please nevertheless wait for the consecutive translation into Korean before providing your answer, so that we can keep things running smoothly.

A. Yes, I will make sure to do so. Even though I did study in the UK, since returning to Korea I have not had much chance to return, which also means I have not had much chance to study English books. Most of my studies since have been in Korean. So I believe it is best for me to testify in Korean to communicate my views accurately regarding the Korean law.

Q. And that's fine, of course, and thank you. We are certainly not challenging your right to do that. I just wanted to make the point about waiting for the interpretation.

I also wanted to set out a few guidelines before getting into the questioning. We have a lot of material to cover in a short time today and so I would be grateful if you could answer my questions directly.

I'll be doing my best to keep my questions brief and easy to understand, but if you don't understand any questions, please feel free to ask me to clarify them. If you could keep your questions as concise as you

[Page 57]

need to, elaborating only as necessary, that would be appreciated.

A. Yes.

Q. Thank you, and we'll be going through various documents today. We're now handing out the cross bundles for you. This will be a binder that contains the documents we plan to ask you about.

These documents will also be put up on the screen in front of you and the bundles that you're being given now have both copies of your two expert reports, and then copies of a selection of documents which I will be taking you to and the Korean versions of those documents are in those bundles as well. So of course look at the Korean versions and I'll do my best to direct you to the correct page on the Korean version.

A. Yes, I have just mentioned I am more familiar -- I'm more accustomed to Korean language. So I would appreciate if any materials are put on the screen, that the Korean version be available on the screen.

Q. And it will be. So you will be able to see the Korean version, and again the hard copies of the Korean are also in the binder that you can look through.

So to begin, in your first report you deal with two questions, Professor. The first is the legal status of the NPS under Korean law and the second is the legality

[Page 58]

of actions taken by the NPS in exercising the fund's vote in favour of the merger; correct? {F1/1/1}?

A. Yes, correct.

Q. And you're here as an expert witness in Korean administrative law; do I have that right?

A. Yes, correct.

Q. Now, I just wanted to discuss some other areas of expertise you appear to have. If we could turn to your key publications, and this is in Appendix 2 at page 61 of your first report. {F1/1/63}. Let me know when you're there.

A. Do you mind telling me which page that is in the Korean version?

Q. I believe it's the same page. At the bottom of the page it should be page 61. It is your Appendix 3 in your own expert report -- sorry, Appendix 2.

It may be 59 in the Korean, now that I'm looking at the Korean. But I do not read Korean, so you should be able to find it better than me.

A. Yes.

Q. And you call this key publications. When you put this list together, did you have in mind the subject on which you had been asked to give an opinion in this arbitration?

A. No, I did not.

[Page 59]

Q. So this is just a list of all your publications?

A. No, it contains only my recent publications. And so -- so you can see that it's mainly from the 2000s to recent. There are a few that date in the 1990s, but you will see that most of them are from recent, all the way back to around the 2000s.

Q. Yes, I was a little confused when you said recent because there are some from 1997, but thank you for clarifying that.

The first bullet is a publication about operating a transportation platform. Am I understanding correctly that the type of transportation platform there is an online application or a digital network that's used to connect passengers with drivers for providing rides? Is that the type of platform you mean there?

A. Well, this is on top of my CV introduction, and so in terms of -- in order of introduction, when I was explaining my background I mentioned this last because it is most recent.

To just give a bit more explanation of my expertise, previously I had invested quite a lot of time in areas such as financial regulation or pension regulation, but more recently, especially since Go player Se-dol Lee lost to an Al system, a series of Go matches, I have actually taken up a new field of work, and that regards

[Page 60]

autonomous vehicles and Al.

So I have been since then taking on a lot of work from the Ministry of Land, Infrastructure and Transport, as well as the Ministry of Science and ICT regarding that field of study, and so the specific project that the transportation platform that you've mentioned is actually a research that was commissioned related with creating a central data platform and the administrative regulations that should govern a central transportation data platform that is created by collecting transportation data from all parts of the region.

Q. Thank you, Professor, for that explanation. It's interesting. I was just trying to understand, make sure I understood what the article was about, because obviously that topic is not of relevance to us here today.

But as you say, your more recent expertise has been in that area, and we see that reflected at least in the headings of the first five publications on your list; correct? They all have to do with autonomous vehicles?

A. Yes, correct.

Q. So at the sixth bullet point on this page we see that you wrote about reforming the regulatory structure of public interest organisations, but you do not rely on that article for anything in your expert reports, do

[Page 61]

you?

A. No, I did not. That is because the questions that are at issue in this case, which is basically what is an administrative agency in Korea or what comprises an administrative organisation under Korean law, are questions that are assumed to be obviously be known or obviously known to anyone who specialises in Korean administrative law. And therefore I did not have the need to refer -- rely on the paper that you've just mentioned on reforming regulatory structure for public interest organisation for the purposes of preparing my expert report.

Q. Professor, just on the comment you just made, you say that it would be obviously known to anyone who specialises in Korean administrative law what the -- what comprises an administrative organisation. You have -- we can count the pages if we need to -- but you have written nearly 100 pages in two expert reports trying to explain this obvious point; is that right?

A. Well, first of all, the reason I did not cite this paper that you mentioned on the reforming regulatory structures for a public interest organisations in preparing my expert report is because that topic is not related with the topic at issue or what I was asked to discuss.

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I had thought that it was a relatively simple question of -- that based on the principles that -- of administrative law as I understand, that it was a fairly simple question to answer, that an administrative organisation would include not only the central administrative agencies, but also local governments, as well as public institutions. I had to write 50 pages, two expert reports, to explain the reason for that in detail.

Q. Professor, I won't go through your entire list, but you've got various articles about asset pooling and Chinese walls and fiduciary duties, but let's look at your first report where you explain or summarise at least the topics from this list.

This is paragraph 1 of your first expert report which is in one of the binders next to you and should also come up on the screen. {F1/1/4}.

Do you see that?

A. Yes, I am looking at it.

Q. We can read together, you in the Korean, of course, but we see here you wrote:

"I have published extensively on topics relating to pension law and pension administration in Korea, the regulation of trusts, and the fiduciary duties of pension managers and trustees in Korea. In 2016

[Page 63]

I published an article about the legal relationship between the NPS and the National Pension Fund ..."

Which you call "the fund":

"... focusing on the legal status of the NPS under Korean law."

Now, that is the only of your articles that you have submitted with your reports; is that correct?

A. Is the point of your question whether I have other papers regarding trust or pension laws that have not been submitted?

Q. Professor, I would ask you not to worry about the point of my question, but simply focus on answering my question, and my question is simply: is this the only of your articles that you submitted with your reports?

A. Probably there are more. My understanding is that I selected the papers to be submitted.

Q. And this is the only one you selected; correct?

A. Did you say only one paper?

Q. Yes, this paper mentioned in this is the only one that you selected to submit with your expert report.

A. Are you referring to papers that pertain to this topic of pensions?

Q. Professor, let me be as clear as I possibly can. You reference one article. You describe it in paragraph 6. unless I missed something, this is the only one you have

[Page 64]

submitted with your expert report, and I am simply asking you to confirm that.

A. Yes, it is this one paper, but actually the National Pension -- the Fund and the National Pension Service is a very specialised field of study, and so I believe that my paper is probably the only paper that deals with the relationship between the pension service and the pension fund.

Q. And interesting that you just mentioned that. You said a moment ago that the question of whether the NPS was part of the administrative branch of the Government was an obvious question. You then said it was a relatively simple question. But you wrote here, and you seem to have just testified again, that it is actually a complex and highly specialised question; is that right?

A. Yes, and I would like to explain the reason why.

When I say that the relationship between the National Pension Fund and the National Pension Service is complex, I mean that, first of all, one needs to have knowledge of financial institutions and the financial market to approach that topic.

Because, first of all, in order to explore that question of the NPS and the National Pension Fund, one must first of all have an understanding knowledge of general asset management and fund creation and

[Page 65]

operation.

And one would not be capable of dealing with the question of the relationship between the NPS and the NPF without such expertise and knowledge regarding financial markets.

And I myself, as a person who have studied trust laws and financial markets, have that expertise and knowledge. And so I was in the position to understand and explore relatively easy the laws pertaining the National Pension Fund and the pension operation compared to other people.

On the other hand, the question of whether the NPS forms a part of the State organ or not, whether it's a part of the State organisation or not, is a fairly obvious, self-obvious question according to the administrative law theories such as the theory of deduction or active theory that I have just explained.

I was -- so I think that most professors of administrative law are not familiar with financial regulations, and so they would find it difficult to approach the topic of the relationship between the NPS and the NPF, the fund.

However, I had the opportunity to study the financial big bang and funds in the UK, and therefore because of my expertise I was in the position to easily

[Page 66]

approach that topic and was able to write this paper.

I would assume that the other administrative law professors were not able to do so because they lacked the understanding of financial markets.

Q. Professor, if I may, if I could again just remind you to limit your answers to the questions I ask, although I do recognise that sometimes you may want to elaborate a little bit and we will get to some of these points later on in the morning.

So I'm clear then from the comments you made, you would say that you were an expert in financial institutions and the financial markets and asset management; is that right?

A. Yes, correct. And pensions as an area, as a familiar area of expertise for me because it would be a part, a subset of asset management.

To return to your previous question, I do realise now that in terms of papers submitted, that was the only paper, one paper submitted, but there's also a paper on retirement annuities that I cite as part of my report.

Q. Thank you, Professor. If I could turn you to your second witness statement, which is in one of the bundles before you. I would like to turn you to paragraph 13 of your second witness statement. {F4/1/6}. If you're with me in the Korean, again, I'm looking at the

[Page 67]

English, but you say in paragraph 13 that you understand the phrase "State organ" to be an international law concept; is that right?

A. Yes, correct.

Q. And you also say that you have been instructed that "an organ includes any person or entity which has that status in accordance with the internal law of the State". So you understand that the question before you is a question of Korean law; correct?

A. Yes. I am not very familiar with international law and so as you've heard in my presentation, I have shared my understanding based on the brief information I have been provided on international law.

Q. You do understand that you are not here as an expert on whether the NPS is a State organ under international law; correct?

A. Yes, I came here as a Korean law expert, not as an expert on the topic of State organs under international law.

Q. And if you look at paragraph --

A. However, I'm mentioning the concept of State organ under international law briefly in my expert report for the sake of ease of explaining the concept under Korean law because, as I understood, the State organ concept under international law was not very different functionally

[Page 68]

compared to the concepts under Korean administrative law theory.

Q. That's interesting, Professor. If you look at paragraph 14, you say in paragraph 14 of your second witness statement that there is no direct analogy to the concept of "State organ" under Korean law. Am I now to understand that you are saying there is a direct analogy? {F4/1/7}

A. Well, Counsel, I think you misunderstood my previous comment. When I said that the approach taken by international law, when it describes a State organ, is similar to the concept or approach under Korean law, it's the following.

When I said that, I meant the following: that under Korean law administrative agencies are considered to consist of the State, local governments, and public institutions, and when determining whether public institution forms part of the State organisation or an administrative organisation, it looks at various criteria, including whether that public institution performs and exercises State powers that it is entrusted with by law.

So in other words what I described as the being the concept of State organ under international law was that functionally it looks at whether an entity exercises

[Page 69]

a State power that it is entrusted by law, whether that entity established by grounds laid out in statute, and also, as I have just mentioned, whether it performs an action that is considered to be a part of the public or State power.

That sounded very similar to the concept that we use in Korean administrative law. So that is why I believed that the concept of a State organ was very similar to the approach that we take under Korean administrative law.

Q. Professor, you said during your presentation that you were told that legal personality -- this is a separate legal personality of an entity -- that you were told legal personality does not matter in determining this issue. Am I right that you were then instructed as to which factors you should consider and which you should ignore in determining whether the NPS is a State organ under Korean law?

A. No, I have not been instructed.

Q. So you misspoke during your presentation?

A. I don't think I have misspoke. I was provided with the ILC regulations and I provided my opinion in my presentation based on my rough understanding upon reading the ILC regulation I was provided.

Q. And so again you seem to keep coming back to this. Your

[Page 70]

opinion then is based on your understanding of international law as it has been described to you?

A. Yes, that is correct. There is a chance that I may have misconstrued, but my opinion is based on my understanding of a State organ.

Q. You also noted during your presentation that you were told -- and correct me if I am wrong but I assume that you mean by counsel for the Claimant -- that an international tribunal had determined that the Korean entity KAMCO was a State organ and so is that something you also took into consideration, believing that that was properly a State organ?

A. Yes. I do not know the details regarding KAMCO. I was provided with a rough briefing.

I also did hear and read news reports about that matter in Korea. So there is a chance that my understanding of that matter is not accurate or correct.

But then KAMCO is a quasi Government institution, an agency, it's actually a fund managing type quasi government agency, the same as NPS. And so I provided my opinion based on that, that given that both are quasi government agencies, fund managing type quasi government agencies. I thought maybe similar legal principles would apply to both agencies, and that was based on what I was provided, what I heard.

[Page 71]

Q. Just to be clear, as you explained that you don't know the details, you don't know what legal principles were applied in the KAMCO case, do you?

A. No, I do not.

Q. Thank you. If I can bring you back to your first witness statement. I would like to look at paragraph 24. This should be easy to find. It's the colourful pyramid that you included in your witness statement. {F1/1/11}.

Apologies, I referred to that as a witness statement, but of course I meant expert report. It's always nice when the grins on the other side of the room tell me I have done something wrong.

Looking at your pyramid, what you do here is you provide a classification of the hierarchy of the laws and rules in the Korean system; is that right?

A. Yes.

Q. And you've got the Constitution at the top. You do not note it in your discussion here, but the Constitution creates such bodies as the National Assembly, the President, the Prime Minister and the courts, and all of those are State organs; correct?

A. Yes, this is a diagram that shows the hierarchy of Korean law. It is not a diagram depicting State organs of Korea, and that's why this diagram, as you mentioned,

[Page 72]

starts with the Constitution on top, and I support that with the description that based on the Constitution, the legislative branch has the power to create laws and that based on these laws, the President and other heads of administrative agencies have the power to enact decrees. And so this diagram explains the legal hierarchy and is not a diagram intended to describe organisations themselves.

Q. Thank you, Professor. I do feel it's necessary to remind you that this will go much smoother for us all if you simply answer the question that I asked, my next one being: under the Constitution are what you call class II legislative instruments which are statutes enacted by the National Assembly; correct?

A. Correct.

Q. And, for example, the Government Organization Act would fall into class 11; correct?

A. Correct.

Q. Now, I'm not asking to you opine on it at this time, and we understand you disagree, but you do know that Professor Kim's position is that additional State organs are created by the Government Organization Act. You understand his position; correct?

A. Yes, I understand Professor Kim's position.

Q. Can I ask you, Professor, before I go on, can a State

[Page 73]

organ sue another State organ for damages in Korea? So, for example, could the National Assembly sue the executive branch for damages, for example arising from a tort?

A. My understanding is that it does not.

MR TERCEÑO: So let me take a look at this article that you published.

For the President, just to foreshadow, I'm going to look at this one more document and then it might be time for a natural break, if that's okay?

THE PRESIDENT: Yes, exactly. I was going to suggest that we break around 11.30 for, say, ten minutes, and then we can go on until 1 pm and break for lunch.

MR TERCEÑO: That should be perfect depending on the length of the answers, but I just have two or three questions on one document.

Professor, if we could look at this article you published, it's exhibit C-264. It should be in tab 6 of the large bundle in front of you {C/264/1}.

Do you have the article in front of you, Professor?

A. Yes, I do see that my paper has been put up on the screen. So I will try to answer your question by referring to the screen.

Q. The title of your paper is again "The Legal Nature of the National Pension Service and the National Pension

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Fund and the Compensation System", and I would like to ask you to turn to internal page 20 of this document {C/264/15}. In the bottom right-hand corner where you see the large bold numbering, it should be {C/264K/15}.

THE INTERPRETER: Counsel, the documents in the binder do not have the bold numbers. So -- and actually there are no page numbers in this copy either. So --

MR TERCEÑO: Yes, the Korean copy unfortunately does not have page numbering. But if you look on the screen, you should be able to see where I'm pointing to. Do you have the Korean version on the screen?

A. Yes. Yes, I have it on the screen.

Q. Okay. Thank you. If you do want to find the hard copy, it should be about five pages in from the back, but you may be happy with just looking at the screen.

I'm looking at heading number 3 on this page, it is entitled "Civil liability of the NPS and its employees for shortfalls due to unlawful performance of duties". Simple question is: did I read that correctly?

A. Yes, correct.

Q. And under sub-heading 1 it's called the "NPS's civil liability to the State". Do you see where I am?

A. Yes, correct.

Q. And in that paragraph you explain, do you not, that the NPS can be held liable to the State of Korea for the

[Page 75]

acts of its employees because its employees are its agents; is that correct?

A. Yes, correct.

Q. And I'm going to read a sentence a little more than halfway through that paragraph. You wrote in your article :

"Therefore, based on the agency relationship, the State may claim for damages against the NPS for non-performance of delegated duties."

Did I read that correctly?

A. Yes, that is what it says.

MR TERCEÑO: Thank you, Professor.

President, this may be time to take a short break. When we come back, my colleague Mr Sanghoon Han will be asking some questions. So it gives us an opportunity to switch.

MR GARIBALDI: I have a question on this.

Professor Lee, regarding the question that counsel has just asked, if the NPS is liable to the State as responsible for the unlawful act of an NPS employee, isn't the State who owns the assets of the NPS being compensated if successful out of its own funds? Does it follow then?

A. This part of my paper, now that you have posed me that question, I realise was not correct. I think I did not

[Page 76]

have the full insight into the situation when I wrote this paper because the NPS, as I have mentioned, is a special statutory corporation that has no assets -- capital of its own. And therefore even if it is held liable, it would have no property to pay that liability because, as you know, all of the -- the fund itself is State property and the operational expenses of the NPS are covered by the Treasury.

So the NPS itself would have no property to fulfil any liabilities if there is such -- if it is found liable to the State, and so I think that when writing this paper I did not have the full insight.

MR GARIBALDI: Thank you.

THE PRESIDENT: Okay. We break for lunch (sic) until 11.45, and Professor Lee, I should remind you that you cannot speak to anyone about your testimony during the case. You're free to go, move around, have a cup of coffee or tea.

(11.32 am)

(A short break)

(11.45 am)

THE PRESIDENT: Let's resume. It looks like I misspoke a while ago. For the avoidance of doubt, that was not the lunch break. It will come a bit later, around 1 o'clock. So if you felt a bit rushed with your

[Page 77]

sandwich, you will have a bit more time in an hour.

Just to understand, it will be Mr Han examining, and it will be consecutive?

MR HAN: Yes, Mr President.

THE PRESIDENT: And you will put your questions in Korean, I understand.

MR HAN: Correct.

Cross-examination by MR HAN

MR HAN: Professor Lee, I will be making comments, but please understand that even if you understand what I have said in Korean, you need to wait until that has been translated into English before providing an answer.

A. Yes, I will do so.

Q. Thank you, Professor, for coming. I have a few comments to make before I start. We are actually quite behind schedule, so I would appreciate if you could provide short answers, such as "yes" and "no", if it's possible. If you feel the need to add, I would also like to let you know that there is a separate time set aside for the Claimants to provide you that opportunity.

A. Yes, I will try to do so.

Q. Now, to go back to the question we were discussing before the break, is it correct that you said that because the NPS is a special statutory corporation that does not have any capital, even if it loses in

[Page 78]

litigation, it would not have its own property to use for that liability ?

A. Yes, the NPS is, as we have been saying, a special statutory corporation without capital, which is the same status as the Bank of Korea or the Financial Supervisory Service.

The National Pension Act only stipulates that the NPS is merely a corporation, but in fact it is a special corporation that does not have any capital of its own.

Q. So even if it were to lose in civil litigation, it would not be able to perform; correct?

A. Would it be possible, counsel, to specify your scenario of what kind of civil -- who the counterparty is in that alleged civil litigation that NPS hypothetically is losing. Can you specify your hypothetical in terms of who are the plaintiffs and the defendant in terms of a civil litigation ?

Q. Well, the scenario I have in mind is where the NPS is a defendant in a civil litigation and my understanding is that whether NPS is able to perform or not would not change depending on who the plaintiff is. Am I not correct?

A. Well, to return to my paper, the premise of my paper was the damages, compensation when the public -- a citizen of Korea happens to incur losses or damages caused by

[Page 79]

the actions of an employee of the NPS, such actions being taken in the course of the NPS performing State affairs as a way of performing State actions. That was the premise of my paper, and that is what my paper mainly deals with.

My opinion was that because NPS is part of the State's administrative organisation, if any damages were imposed as part of NPS's action, the State would have to ultimately provide that damage compensation.

But your question seems to imply NPS being a party to a civil litigation and that is why I wanted you to clarify the plaintiff and the defendant in this hypothetical civil litigation you were asking me about.

Q. Well, please once again listen carefully to my question and try to answer the question that I have asked you. My question was not about your paper. Actually it was about a simple example. For example, let me give you an example. I myself personally incurred damage/loss due to, for example, tort committed by an NPS employee and I filed a civil litigation against NPS because of that damage I incurred, and NPS lost in that civil litigation.

In such a case would NPS bear liability?

A. Well, according to my theory, in that case I believe that the State would have to provide the damage

[Page 80]

compensation because NPS and its employee was acting as part of performing State duties that it was delegated with. Of course this question has not been actually tested, but my opinion is that because the NPS and the NPS employee was performing a State power, State authority that it was delegated with, if damages have occurred in the course of performing such State powers, the State, as the principal that delegated its power, commissioned its power to the NPS, would be the party that is liable to provide compensation under the State Compensation Act.

Q. Please turn to tab number 1 in your second binder. Please turn to paragraph 67. RER-2. Operator, we are not seeing the screen. Tab 1 in volume 2.

Page 28, sir.

THE INTERPRETER: So that's page 28 in the Korean version?

MR HAN: Yes, correct.

I have only one question and, please, I would appreciate if you could answer "yes" or "no".

In this table there's actually two civil litigations cases brought against the NPS.

Now, if NPS had lost in these civil litigations, who would be liable? Would it be the NPS or would it be the State that's liable and not the defendant?

A. Regarding the first of the two cases, my opinion is that

[Page 81]

the State would be liable for providing damage compensation under the State Compensation Act. That is because the damages appears to have arose in the course of performing State action by the State. Is the second case the one in the second row; is that correct, counsel?

Q. Well, Professor, I have actually asked my question to both of these civil litigation cases in this table, and to ask my question again, my question is if NPS, the defendant, loses in these cases, who would bear the liability? Would it be NPS, the defendant, or the State, who is not a defendant, a party to the litigation ?

A. If these cases had been conducted in the form of civil litigation, then upon losing the case, the defendant would have to bear that liability. However --

Q. Well, I would just once again remind you that we are quite behind schedule and once again would like to ask you to answer "yes" or "no" to questions that can be answered "yes" or "no" and then to use the Claimant's time if you have anything to add.

MR GARIBALDI: Excuse me, but I do need to have the answer to that question. The complete answer to that question. It is the same question I asked before in the context of a State -- of a State claim. So the NPS is found liable

[Page 82]

in a lawsuit by a private individual in this case. Who pays for the damage?

As I understand it, the NPS has no assets. So who ends up paying for the damage? That's the question.

A. My opinion is that the State would bear liability for damage compensation. If a party would attempt to file such a civil litigation against the NPS, my opinion is that the court would have to find by rejecting the case on grounds of being unlawful and instruct the plaintiff to file the case as a case under the State Compensation Act.

THE PRESIDENT: Just to follow up on that, Professor Lee, would you know whether NPS has in its budget a budget line for contingent liabilities, legal liabilities or anything like that?

A. According to my understanding is that it does not have such a line item. The properties that do show up under the name of the NPS actually is State property and the NPS's expenses are covered entirely by the State treasury, and the NPS itself does not have other sources of income.

THE PRESIDENT: I understand that the fund is considered State property and the budget funds are provided by the State. I was more interested in whether you were aware whether the budget that the State approves for the

[Page 83]

use -- for the use by the NPS includes a budget line for these kinds of liabilities -- contingent or legal liabilities -- But I understand you are not aware of that?

A. Yes, I do not know the details of that, but my opinion is based on the material that I have seen before about the NPS accounting. According to what I saw previously before, NPS does have an account to its name, but almost all of the assets included in that account are tied to the fund itself and compared to the scale of its operation, the -- any amounts that are NPS's own that are in that account were very negligible. And NPS does not have its own income.

MR HAN: President, if you do not have any question, I'm going to move on.

I will move on, but just for your information, the two civil cases that we've been just seeing, none of them were rejected by the court and actually NPS lost in one of those civil litigations --

A. Actually, that was the point I wanted to make. Even though until now the issue is being dealt with in the form of civil litigation against the NPS for damages, my opinion is that it can be addressed as an issue of the State Compensation Act.

Q. So I would like to then ask you questions regarding your

[Page 84]

second expert report that is tab 2 in your first binder. That would be CER-4. {F4/1/1}

THE INTERPRETER: Counsel, is there a specific part of this part that you would like me to look at?

Q. Paragraph 13.

THE INTERPRETER: He's asked whether the counsel is referring to his first expert report. It's his second expert report. So it's the second expert report, paragraph 13.

A. Yes, I have found it.

THE INTERPRETER: Counsel, do you mind repeating your question?

MR HAN: Yes.

So here you are saying that a State organ is a concept that does not exist under Korean law and you examine the status of the NPS under Korean law as well as the its position within the overall Korean Government organisation; correct?

A. Well, here I do reference the State organ concept, but in the parts where I describe Korean law I am only basing my opinion on Korean legal theory.

Q. Would you like to turn to tab 32 which is {C/532/1}, tab 37.

Is it correct that you explain that there are two theories, you present two theories that you say are

[Page 85]

relevant in determining whether an entity belongs to the administrative branch or not, those two theories being the deduction theory or the active theory?

A. Yes, that is what I am explaining.

Q. Operator, can you turn to page 2 {C/532/2}.

Let me just read out the point that is titled number 2. Here it says that there are different contending views on how to define the concept of administration in practical terms. Am I reading it correctly?

THE INTERPRETER: He's just said that the question asked in Korean does not match the translation provided into English.

MR HAN: I have actually just read off of the material, Professor, that you have submitted. Let me just try to read that again.

Is it correct that it says that there are many different contending views on how to define the concept of administration in practical terms?

A. Yes, that's what it says.

Q. And actually if you look at this paper, there are four theories that are introduced, including the passive theory, the active theory, the descriptive theory, and then the negative theory or the type of institution theory; is that correct?

[Page 86]

A. Yes, correct.

Q. And is it correct that you only introduced two out of these four theories and have submitted translations only for those two?

A. Yes, but I do believe that even under these other theories, the same conclusion, a similar conclusion would be reached. The reason why I introduced only two was because I believed that those two were the more representative theories and thought that it would be too complicated to introduce four dogmatic theories.

Q. Operator, can you pull up the transcript for the first day page at 105 and line from 19 {Day1/105:19}.

Actually the Claimant last Monday had made an introduction on the so-called composition of State organs and I would like to share what the Claimant had said on that day.

"A government agency has to be either of the one type, a central agency or the other type, a public institution."

Do you agree with this?

A. Well, I do not believe that all public institutions form part of the State organ or the State organisation.

First of all, public institutions actually span a very wide spectrum. I think that the statement made here would be correct in the case of certain public

[Page 87]

institutions, for example a fund management type public institutions that are highly similar to a government organisation, actually have almost all of the characteristics of a government organisation and perform a public function.

But I also say that not all public institutions would be included in there.

Q. I would like just to pose the question again, Professor, and I would appreciate a "yes" or a "no". Do you agree with what I have just read?

A. I would like to read through that passage in detail before providing my answer. So that is from line 20 of the transcript on the screen. (Pause)

I can understand this statement, but I would say that it's a bit too rigid to define it as either one or the other, that it's either one or the other is a bit too rigid a definition.

Q. Professor, is it correct that the administrative organisation legalism refers to the fact that administrative organisations must be set forth by law?

A. Yes, I'm familiar with that concept.

Q. I would like to take you again briefly to your second statement which is tab 2 of volume 1 {F4/1/1}?

A. Is it my expert report?

Q. Yes, correct. Yes, and I'm showing it to you on your

[Page 88]

screen.

THE INTERPRETER: Counsel, do you mind out pointing out where you're reading off of? I'm not able to pinpoint that on the screen.

Q. It's the last paragraph of paragraph 12:

"Is it correct that you here say that in order to determine whether any entity is part of the administrative branch of the Korean State, it is thus necessary to determine whether the characteristics of the entity suggest that it forms part of the administrative branch, in particular, by determining whether it performs a State function." {F4/1/6}

A. Yes.

Q. So therefore is it correct that whether an entity is part of the administrative branch is not a fact that is preset, is predetermined, and could actually differ in each case, case by case, depending on the function it performs?

A. Well, as you mentioned, according to the concept of administrative organisation legalism, it would be great if whether an entity is part of the administrative organisation or not is apparent by law.

However, that would not be the case of all administrative organisations or entities that are part

[Page 89]

of the administrative organisation, especially in the case of the modern State where it is inevitable for the State to, for example, delegate or commission certain State functions to organisation that not all of the entities that play the role of an administrative agency or -- agency would be provided grounds by law.

So in these cases, whether that entity is -- forms part of the state administrative organisation would have to be determined case by case by looking at factors such as whether that entity exercises State functions, whether it exercises State power, and whether it is entrusted such State power by law. In determining whether that entity forms part of the State organisation, especially in the case of entities that are not specified by law explicitly as being part of the State organisation or as being a part of the administrative organisation.

Q. Exhibit C-278, volume 2 in tab 11. {C/278/1}. Operator, can you turn some page down, like four, five down. {C/278/4} One more down, please. {C/278/5} Yes, there, please.

If you look at the screen, is it correct that it shows the designation of public institutions for 2018?

A. Yes, correct.

Q. So according to your view, Professor, of the public

[Page 90]

institution listed here, some may be part of the government organisations whereas others would not be, depending on the performance of State function.

A. Yes. Here largely they are classified into public corporations and quasi government institutions, and under the public corporations --

Q. Well, I was about to ask you about that, so I would appreciate if you will listen to my questions and answer my questions.

So if you look here, as of 2018, there were 338 public institutions designated as public institutions; correct?

A. Yes.

Q. Would you like to go about two pages into the document {C/278/6}. Here it lists the current status of these 338 institutions; correct?

A. Yes.

Q. So this 338 institutions would be actually a commingle of institutions that may be part of the government organisation and those that would not be part of the government organisation, depending on whether State functions are performed; correct?

A. Yes, correct, but the chances of that is low as you approach the top of the list and the chances of that increases to quite a high significant level as you

[Page 91]

approach the bottom of that list.

Q. So then let's go down to the bottom side of the list which, according to you, would be institutions that have a higher possibility of being part of government organisations. Would you like to go around two pages down. {C/278/8} One more, please. {C/278/9} Yes, there.

So as you've said, we're now at the bottom side of the list out of these 338 institutions; correct?

A. Well, actually when I said "bottom", I actually meant that the previous page that we were on, the bottom of that previous page shows you the 16 public institutions that are the fund managing type quasi government agencies that I believe have a very high probability of being considered to be part of the state administrative organ. The page you're actually seeing is not.

Q. Can you go up one page, please. {C/278/10}?

MR YOUNG SUK PARK: Sorry, his answer needs to be translated.

A. If we look at the page that I was referring to previously, here it's the NPS, you will find the NPS listed here, and also KAMCO.

Q. Can you go one page up that was shown before? Well, here I would actually like to take you back to the latter part of that table that we were looking at. Do

[Page 92]

you see on the bottom side of this page an institution named Public Home Shopping?

A. Well, there's just too many institutions in this list. I'm not able to easily identify the one you have just said. At least regarding these public institutions that we're seeing on this page, I do not consider them to form part of the government organisation.

Q. Professor, you just previously said that whether a public institution forms part of the government organisation is determined based on its functions, but are you saying that just based on this table, it's difficult to determine that?

A. Actually I have mentioned several factors.

Well, I actually mentioned several other factors that should be considered in determining whether a public institution forms part of the government organisation such as whether it has been empowered -- whether it has been delegated or entrusted with authority and powers by law, whether that entity performs a public function, and whether that entity exercises State power.

These several factors should be taken into consideration in making that determination.

The National Finance Act requires that funds be managed by the fund managing entity autonomously, but

[Page 93]

there is an exception under the National Finance Act in the case of the National Pension Fund.

Regarding the National Pension Fund, the National Finance Act requires that actually the fund managing entity establishes a separate corporation, a legal entity, and to entrust the separate legal entity, a legal person with the management of the fund.

The reason why, unlike other funds that are to be managed by heads of, for example, government ministries and departments, the National Finance Act requires that the NPS be established as a separate legal entity and to be delegated, entrusted with the powers to manage and operate the fund is because the National Pension Fund requires a far higher level of expertise and professional skills in managing that fund compared to other government funds.

That is why a separate legal entity, a corporation, is to be established and be entrusted with the duties of managing the National Pension Fund, and also that is the reason why the National Pension Service is required to hire the executive director of fund, a professional, to oversee that activity.

That is -- so that is the reason why the NPS is required to be established separately from a government department to manage the fund and not because what

[Page 94]

function the NPS performs is not a government function.

Q. I would like to ask one last question on this table.

Would you like to go two pages up. One more, please. {C/278/6} Yes, there.

Is it correct that you said that if you go towards the top of the list, the probability of becoming a government organisation increases?

A. No, I said the opposite. I said that the probability or the possibility increases on the bottom side.

Q. You recall that one of the entities that were on the bottom of the list was the Public Home Shopping.

A. Is there a Public Home Shopping on this page that I'm seeing right now on the screen?

Q. That was on the bottom of the table that I have previously shown you.

A. Well, I do not see that home shopping company in the bottom of the table I see on the screen right now.

Q. Professor, is it correct that you just agreed with me in terms of the legalism of administrative organisations which requires that administrative organisations be established by law?

A. Yes, I am aware of that concept of administrative organisation legalism.

Q. Would you like to turn to the first page of the C-278 {C/278/1} that we're looking at. Is it correct that it

[Page 95]

says that the Ministry of Economy and Finance held the Public Institution Management Committee and designated or revoked the public institutions designation?

A. The legalism of administrative agencies, organisations, is a very useful concept, and I do agree that it would be a perfect world if all administrative agencies can be set forth by law according to -- as according to that concept.

However, in reality it is impossible to list all administrative agencies in law and that is why, for example, as we see here, the State will go about designating or releasing designation of public institutions from time to time, as different entities come to perform public functions or exercise State powers.

So from time to time the State would designate entities as public institutions in order to either exercise supervision over these entities that are performing public functions and exercising State powers, or actually providing these institutions with autonomy, and giving it more room to become more professional, and I think that would actually be the intention of this Act on Public Institutions.

Just because the Act on Public Institutions allows for this designation or release of entities as

[Page 96]

administrative agency, I do not believe that the Act on Public Institutions are in violation of this legalism concept or is at odds with the concept of legalism.

THE PRESIDENT: Professor, if I may, what are the legal consequences of a designation of an institution as a public institution? You mentioned that there would be State supervision. Are there any sort of concrete legal consequences for instance in terms of funding that if -- if a public institution is -- or an institution is designated as a public institution, it is entitled to receive funding from a State budget or anything like that? Does it have any legal relevance or is it just a classification ?

A. Well, first of all, if an entity is designated as a public institution, it would then at that moment become subject to various other individual laws, that actually is applicable to public institutions.

An example would be how an entity that is designated as a public institution would become subject to administrative litigation or administrative appeal as part of Korea's administrative relief acts.

An entity that is designated as a public institution would naturally become subject to the Act on the Inspection and Investigation of State Affairs.

These are examples of a large number of individual

[Page 97]

laws that actually is applicable to any entity that is designated as a public institution.

I have in my report provided a detailed description of these individual laws that would apply to an entity that has been designated as a public institution. Also, the Act on Public Institution itself provides an autonomy, a scope of autonomy for public institutions that have been designated as a public institution, but at the same time that autonomy, that concept of self-control, is accompanied by supervision. That is also provided under the same Act on Public Institutions.

For example, under the Act on Public Institutions, the Public Institutions Management Committee is to conduct a review of the performance of that public institution on an annual basis which will be part of a strong financial oversight.

THE PRESIDENT: So just to understand, these institutions that may or may not be designated as public institutions may simply be previously a government office or a municipality office which have no autonomy, but once they are designated as public institutions, they gain more autonomy, they can decide on their own functions independently from the State; is that the only benefit or do they only -- also are there any financial consequences for these institutions in terms of how they

[Page 98]

are financed?

A. Well, my understanding, sir, is that when an entity is designated as a public institution, it is then subject to even a higher degree of regulation. The reason I say so is, for example, because I'm aware of the example of the Financial Supervisory Service. There has been attempts to designate the Financial Supervisory Service, the FSS, as a public institution.

The FSS is actually under the auspices of the Financial Services Commission, the FSC, already, which is in turn under the control of the Ministry of Finance.

Even though there have been attempts to designate the FSS as a public institution, my understanding is that the FSS has been strongly resisting that designation because it does not want to become under further regulation that it would face by becoming a public institution.

So there are certain public institutions that are already performing the role of the government, even before it is designated as a public institution. It is already performing such functions under the laws that provide grounds for its establishment.

So that shows that whether an entity is designated as a public institution or not is not necessarily the event that confirms whether an entity is part of the

[Page 99]

government or not because there are cases such as the FSS where it is already a part of the government entity based on the laws that provides for its establishment, but then there are other cases where an entity by becoming designated as a public institution would then become part of the government organisation or administrative organisation, and when these organisations are designated as a public institution, it would then be subject to a higher degree of regulation than what is provided by the laws that provides the grounds for its establishment.

So because that entity by becoming designated as a public institution would become subject to the Act on Public Institutions as well as, as I have just described, the whole set of other administrative laws and regulations that are applicable to entities designated as a public institution, and once again an example would be the FSS, which has very strongly resisted the attempts to designate it as a public institution. I'm assuming it is because the FSS would like to bear the regulations that it -- it would not -- it does not want to bear any additional regulations than what is already dealing with as being under the FSC.

THE PRESIDENT: Thank you, Professor.

MR HAN: Thank you, Mr President.

[Page 100]

Would you like to turn to your first expert report {F1/1/1}. It's paragraph 77 {F1/1/40}, last sentence. Is it correct that here you're saying:

"Since the minister's affairs -- That's Minister of Health and Welfare, his affairs. -- are State affairs, any duties delegated to the NPS by the minister are therefore also State affairs."

A. Yes.

Q. So according to that, entities that are entrusted with State affairs and perform State affairs would naturally be State organs; correct?

A. Yes, I would assume that would be so in most cases. Even in the case of a private person, an individual, if an individual is entrusted with State affairs, then for purposes of administrative relief, that individual entrusted with State affairs would be considered to be a State agency and one can seek relief via Administrative Appeals Act or the Adminstrative Litigation Act.

Q. Would you like to turn to footnote 52 of your report. It's page 17, I believe {F1/1/17}. It's 18 in the English version {F1/1/18}.

Is it correct that here you're introducing the National Pension Act and its Enforcement Decree?

A. Yes.

[Page 101]

Q. Is it correct that Article 76 of the Enforcement Decree of the National Pension Act stipulates that the Minister of Health and Welfare shall entrust the following affairs of the State to the NPS, and therefore it lists the State affairs to be entrusted by the minister?

A. Yes. The way I read it, I would say reading it from the National Pension Act, Article 102 of paragraph 5 says that the minister may entrust certain services or affairs related with the management and operation of the fund.

So this, I believe, is declaring that the management of the fund is a duty that is proprietary to the minister, but may be entrusted. Certain parts of that may be entrusted.

As a way of detailing that entrustment, Article 76 of the Enforcement Decree to the National Pension Act as you mentioned provides certain -- certain affairs that may be entrusted such as, as you see here, the management and operation of the fund, actuarial accounting and matters regarding the property.

Q. And is it correct that if we go back to Article 76 of the Enforcement Decree, that it lists under subparagraph 2 the accounting of the fund as one of the affairs that can be entrusted?

A. Yes, I'm looking at that part.

[Page 102]

Q. And the meaning of this accounting would be to calculate and also to account for the numbers; correct?

A. Well, the word here, the Korean word being "gye-ri" is not a word that I'm familiar with, but I'll take your word for it.

Q. So if we assume that an entity that is not the NPS is then entrusted with the work of calculating and taking -- and keeping the accounts, then that entity that is not the NPS would be a government -- a part of the government would be a government agency because it is performing this affair?

A. Well, I would say that if it, for example, was a regular private company that was entrusting or outsourcing its accounting or calculation work to, for example, an accounting firm, that would not constitute the performance of State affairs or State duties even if it is the delegation or entrustment of accounting and calculation that is stated here.

That is because it is the principle that is entrusting that is a private company, a -- a private party that is entrusting that accounting service for its own benefit.

That would not be the case here. The NPS is entrusted with a duty, the State duty of managing the State's funds. The State funds specifically set aside

[Page 103]

as reserve funds for future generations.

And the NPS is entrusted with the duty of operating and managing that fund and together with that entrustment the NPS is also required, as you see here, to conduct accurate accounting calculations of how it is managing that fund.

So I would say that there is the purpose attached to is different between the entrustment of accounting affairs by a private company versus the entrustment of accounting services in the course of performing the State's purpose.

I provided the expression "purpose attached to is different" because I think that's an expression that I used in my doctorate dissertation.

So I would say because the purpose attached is different between a private company entrusting actuarial or accounting duties versus the NPS, I think that the two would be found different.

MR HAN: Mr President, I'm conscious of time. If I may, I can make one last point and finish. Thank you.

Would you like to turn to paragraph 74 of the same report {F1/1/39}. Is it correct that here you say in the last sentence:

"In this respect, therefore, the NPS is treated as equivalent to a State agency, which is a broad term not

[Page 104]

exhaustively defined in Korean law."

A. Yes.

Q. Would you like to turn to {C/157/1}, which is tab 15 in volume 2. {C/157/2}

Is it correct that the part of the report that we just saw, you said that the term "State agency" is a broad term which is not exhaustively defined in Korean law?

THE INTERPRETER: As the interpreter, I may need to point out a slight discrepancy between the Korean and the English that we've been reading.

In the English version the expression "exhaustively defined" is used. In the Korean I'm finding the word "broadly". So that is for note.

To the question, the Professor provides the following answer:

A. What I meant here by broadly is that actually the term State organ is used together with various other terminology such as administrative agencies, public organisations, or other names. That is the point that I wanted to express here.

Now, regarding to the Petition Act that you've just turned me to, if you look at the Petition Act it sets forth that a petition accepting agencies are, subparagraph 1, State agencies; number 2, local State --

[Page 105]

second -- subparagraph 2, local governments; and third, those that have received a delegation or entrustment of a power, legal entities that have been received -- that have been delegated or entrusted.

So my opinion is that the NPS would fall under the subparagraph 3 of the Petition Act that we're looking at.

Q. Well, actually, Professor, my question was not pertaining to the NPS. This is the last question. I would like you to listen carefully and answer the question.

Article 3 of the Petition Act does set forth the petition accepting institutions and subparagraph 1 of that is a State agency; correct?

A. Yes.

Q. So according to you, Professor, you are saying that the term "State agency" is a broad term which is not clearly defined in Korean law.

So if we read the two together, it would be unclear as to what would be the entities that would have to receive petitions under the Petition Act by being a State agency.

A. Well, this would be a case when this Administrative Agency legalism comes in very useful because the State -- because the Government Organization Act

[Page 106]

actually lists the entities that are central administrative agencies, and even though the central administrative agencies and other agencies listed in the Government Organization Act are not exhaustive, it does describe most of the administrative agencies that the general public would come into contact with.

So because that is set forth there in that law, I do not believe that what we see in the Petition Act would give rise to any difficulties.

MR HAN: Mr President, we have no further questions for now.

THE PRESIDENT: But you are not done yet? You will continue after?

MR HAN: We will discuss during the lunch break.

THE PRESIDENT: Very good.

Professor, it would be very helpful if you listen very carefully to the questions and only answer the question. It would be faster and easier for all of us.

We break now for lunch for an hour. We will continue at 2.20. The same guidance, Professor. If you could avoid speaking to anyone about your testimony during the break. Thank you.

(1.19 pm)

(The short adjournment)

(2.20 pm)

THE PRESIDENT: Okay. Can we resume? It will be Mr Han.

[Page 107]

MR HAN: Yes, thank you, Mr President.

Professor Lee will finish after a couple more questions.

Operator, can you show R-175. {R/175/1}.

A. Yes.

Q. Do you see on the upper right-hand of that page it says National Pension Service?

A. Yes.

THE INTERPRETER: Oh, it's not included in the binder.

Q. Do you see that on the top middle it says -- it says on top middle, it says "Corporate Tax Information"?

A. Yes.

Q. So this is a document that shows that NPS paid corporate taxes in its name; correct?

A. Yes, this appears to be corporate tax information of NPS, but I do notice that the amount is very small.

Q. Next I would like to show you C-77. It's tab 9 in volume 2. {C/77/1}

I would like you to turn to Article 43, which I think is page 17 of the English version {C/77/17}. So that was Article 43 that I would like to ask you to turn.

Operator, could you turn a few pages up for the Korean version so that you can show 43. Page number 9 for Korean translation. {C/77K/9} (Pause)

[Page 108]

Professor, I'II actually read the Korean Article 43. Can you just check whether the contents are correct?

A. Yes.

Q. "Article 43, Revenues and Expenditures of the Service."

"The revenues of the Service shall consist of money transferred from the National Pension Fund, government subsidies, loans and other income, and its expenditures shall consist of various kinds of benefits under this Act, reserves, returned money, repayment of borrowed funds and interest accrued therefrom, and other expenses incurred from the operations and services of the Service."

Professor Lee, have I read that correctly?

A. Yes.

Q. Now can you turn to Article 46, paragraph 1.

Is it correct that here under Article 46, paragraph 1, it stipulates that the service may conduct the following welfare services to promote the welfare of currently and former insured persons and beneficiaries?

A. Yes.

Q. And subparagraph 1 is loan services; correct?

A. Yes.

Q. So if loans are provided, there would be interest income from that loan; correct?

A. Yes.

[Page 109]

Yes, that is what it says, and that interest would be accrued, but I think the acts or the activities provided under Article 46 would be attributed to the account of the fund, the National Pension Fund, whereas Article 43 that we saw describes the income, the revenues of the NPS that comes from, for example, the transfers from the Treasury, government subsidies, and other sources, and its expenditure.

So looking at the two articles, I would believe that the two activities would be accounted to different accounts.

So my understanding is that activities of the fund, of a national fund, that is provided under Article 46, are not subject to corporate tax impositions.

Q. But is it correct that Article 46 actually describes other activities other than the operation and management of the fund?

A. Yes, correct. But the funds behind that activity are the funds belonging to the National Pension Fund.

Q. Could you turn to Article 44.

A. Yes.

Q. {C/77/17}

Article 44, paragraph 1, says that:

"The Service may, when it has a shortfall of funds, borrow a temporary loan from the National Pension Fund

[Page 110]

each fiscal year."

Correct?

A. Yes.

Q. And if the revenues that come from the operation and management of the fund and the revenues generated from other activities were accounted to the same account, it would not be possible to borrow temporarily loans; correct?

A. Would you like to repeat that question?

Q. My question once again is: if the revenues, the income generated from the management and operation of the fund, were to be attributed to the same account as the revenue generated from other activities and businesses, it would be then impossible to temporarily borrow funds from the National Pension Fund; correct?

A. I think your question is structured incorrectly because whether it is -- whether it is the operation and management of the fund or loans that are provided, both of them are just different items. But are based on the National Pension Fund.

But the borrowing by the National Pension Service is done with the NPS's account, which is separate from the Fund's account. And that is why it would be possible for the NPS to borrow from the Fund.

MR HAN: President, I don't have any further questions and

[Page 111]

I'll pass it to my colleague, Mr Terceño. Thank you.

Further cross-examination by MR TERCEÑO

MR TERCEÑO: Hello again, Professor. I hope you had a good lunch. Thank you for rejoining us and we appreciate your continued patience. With your cooperation we should be able to get through the rest of our questions shortly.

If any of my questions are structurally mistaken, then please just bear with me and do what you can to answer them.

Now, we've dealt so far with your opinion on whether the NPS is a State organ, but your report does not stop there. You also go on to opine on the legality of the NPS's actions in relation to the merger. So it is that part of your report that I would like to ask you a few questions on.

But before I do, you're aware, Professor, that various Korean courts have considered the legality of certain conduct taken by the NPS officials in relation to the Samsung C&T-Cheil merger, are you not?

A. Well, as we all know, the Samsung C&T and Cheil merger created quite a lot of controversy socially and became a social issue. Large number of litigations were filed, including some filed by Elliott. And so I have read some material, including the court decision, the

[Page 112]

criminal court decision, regarding the [Redacted] and [Redacted] case, but because there were so many litigation cases that unfolded from that, I wouldn't say that I have read all of them. But I do believe that I have read up at least the parts that are necessary to provide my expert report.

Q. And of course, Professor, and I'm going to ask for your cooperation again, I didn't ask if you had read all of them. I didn't ask about any Elliott litigation. I simply asked if you knew that certain conduct from NPS officials had been considered by the Korean courts and I understand from your answer that you have.

So my next question is: is it your testimony that any of those court decisions were wrongly decided?

A. I do not think I'm in a position to say that the decision of the criminal court for the purposes of fact-finding was incorrect. However, in making its decision with respect to the crime of abuse of authority, I think the criminal court actually had too easy a hand on the point that the Fund Operational Guidelines were not complied with by the administrative agency, and thus did not address that point properly.

Q. So, Professor, just so I'm clear, is it then your testimony that if this tribunal is concerned with whether certain acts of the NPS were illegal, it should

[Page 113]

ignore the findings of the Korean courts and instead rely on you?

A. To clarify, that is not what I mean. First of all, the question that you posed, that would be fully up to the tribunal to determine.

What I was opining was that as an expert in pension operation and management, I feel that the criminal court had neglected the aspect of administrative regulation and law violations that occurred in that case. The criminal court dealt with the issue of abuse of public office and they did examine certain aspects of the legal violations that occurred.

For example, what occurred -- the violations that occurred with regard to the Investment Committee. When I say that the criminal court neglected other aspects, I mean that the criminal court, as far as I know, did not take into consideration what did not occur on the Expert Committee side. That despite the demands by the chair of the Expert Committee, Mr [Redacted] that the matter be referred to the Expert Committee, that that was not the case.

As far as I know, the criminal court did not take that into consideration or did not examine that, and that is why I'm saying that there may have been a neglect on the part of the criminal court.

[Page 114]

Q. Thank you, Professor. It's interesting that you started there opining on facts.

If I can turn you to paragraph 105 of your first expert report?

MR GARIBALDI: Excuse me. Before we change the subject, I have a general question.

In Korea, in a criminal case, the standards applied to convict someone, to evaluate the evidence to convict someone, what is it? Is it preponderance of the evidence? Clear and convincing? Beyond the reasonable doubt or anything else?

A. (In English) It's beyond a reasonable doubt.

MR GARIBALDI: Thank you very much.

THE INTERPRETER: Should I translate that into Korean for the record, sir? I am not sure about the procedures that are happening.

A. (In English) Sorry, that's very easy English, so I responded instinctively.

MR TERCEÑO: I'll try to keep my English easier, if that's helpful.

Again, paragraph 105, let me know when you've got that in front of you {F1/1/53}.

THE INTERPRETER: Counsel, was that his first expert report?

MR TERCEÑO: Yes, his first expert report, paragraph 105. It should be page 50 on the Korean version, I think.

[Page 115]

{F1/1K/50}

A. Yes, I have that.

Q. Now, starting at the very end of the third line here, you write:

"For the purposes of my opinion, I have been instructed to assume that the Claimant's factual case as pleaded is correct ..."

So the factual statements you just made, you're taking that from the assumption that the -- what the Claimant told you is correct; am I right?

A. (In English) Yes.

Q. Maybe we can get through quickly.

THE INTERPRETER: He's asked for that to be translated just in case.

A. Well, yes, I have been told certain representations of the facts by the Claimant, but also I have read the decision, the court decision, and so the opinion that I offered is based on the court decision that I read as well. And I was able to read through the decision because it does not take so much time for me to read through a Korean text.

MR TERCEÑO: Thank you. Now, one of the issues that you address in your report is the fact that the NPS Investment Committee instead of the Special Committee deliberated and decided on the Samsung C&T-Cheil merger

[Page 116]

vote, and we can look at paragraph 86 of your first report where you say that there are three circumstances where the Special Committee should decide on an NPS shareholder vote. {F1/11/44}. The first of those circumstances is when the Investment Committee finds the voting decision to be difficult. Correct?

A. I do not agree.

Q. I'm sorry, Professor. I'm simply reading your report, paragraph 86. You say:

"... there are three circumstances where the decision is instead made by the

Experts Voting Committee..."

As I said, the first of those circumstances is where the Investment Committee finds the voting decision difficult. Is that what you disagree with, your own report?

A. Well, it seems like it's the reason why I'm saying that I don't agree to what you have just read -- is -- it seems that that has the nuance of assuming that it is the Investment Committee that determines whether a matter is difficult or not, which, if it is read -- if it appears to be read that way to you, would be a violation of the Fund Operational Guidelines. And if I have caused you to read it that way, then the expression here in this parenthesis (i) would not be

[Page 117]

correct.

To explain that, do you mind putting up on the screen the Fund Operational Guidelines?

Q. I will get to those in due time, Professor, but first I just want to make sure I understand because you seem to be going actually beyond my question.

All I'm asking is that if this (i) -- does say that one of the ways in which an item can be referred to the Special Committee is when the Investment Committee finds the voting decision difficult, now are you testifying now that if the Investment Committee finds the voting decision difficult, that is not one of the ways that an item can be referred to the Special Committee?

A. My previous answer may not have been correct, but in any case, I have found on the following page, on at least 39 of the Korean, an excerpt of the Fund Operational Guidelines. {F1/1/45}.

So if you turn to the excerpt of that fund operational guideline, so this is Article 5, paragraph 5, under there is 4, and here it also says when "it is difficult to determine", and so the way I understand the guideline is that that difficulty is not when it is difficult to decide by vote, but when the matter itself is difficult to determine. {C/77/4}.

[Page 118]

Q. Thank you for your interpretation of the language, Professor, but that wasn't at all my question, and I believe if you look at Article 5(5), subparagraph 4, it says pretty much the same thing as (i) in paragraph 86 which was your paraphrasing of that article. So I hope we can move on and I can point you to paragraph 88, subparagraph 1 of your second expert report, which is just below that excerpt. {F1/1/45}.

This paragraph is talking about the SK merger that occurred about a month before the Samsung C&T and Cheil merger?

THE PRESIDENT: You mean the first report, not the second?

MR TERCEÑO: I'm sorry?

THE PRESIDENT: You mean the first report and not the second.

MR TERCEÑO: I'm sorry, I thought I said the first report. It's the same report we've been in, it's just the next paragraph.

Apologies, thank you for the correction, Mr President.

So this paragraph is talking about the SK merger we've discussed in these proceedings, and again, at least when you drafted this report, you seemed to be happy enough with this language because reading in the middle of this paragraph, you say about that merger:

[Page 119]

"The Investment Committee referred the matter to the Experts Voting Committee because it found it 'difficult' to vote for or against the proposed SK merger."

That is what you said in your first report; correct?

A. Well, the intention that I am expressing here is the same as I explained previously. It was referred to the Expert Committee because the matter itself was difficult to decide, not because it found that it was difficult to decide the matter by vote.

Q. Professor, did I read something wrong in that paragraph? Because your expert report expressly says that the Voting Committee, the Experts Voting Committee, it was referred to the Experts Voting Committee because the Investment Committee "found it difficult to vote for or against the proposed SK merger". These are your words; correct?

A. Which part of my report have you referred to in your immediate -- in your question?

Q. It is the same sentence that I read in the question before that which you took issue with. It is in paragraph 88, subparagraph 1. I will read the question -- the sentence again, your words:

"The Investment Committee referred the matter to the Experts Voting Committee because it found it 'difficult' to vote for or against the proposed SK merger."

[Page 120]

Have you found where that is in your expert report, Professor?

A. I don't think it is a very -- I don't think it's a very critical matter but the reason why I repeated what I had said previously again is because at least in the Korean version that I wrote, it does not say because the matter was difficult to decide by vote. And so I needed to clarify that again.

Q. Thank you, Professor. In the English version it also does not say "by vote". It says it was difficult to ... -- it "found it difficult to vote for or against". But we can leave it at that. I am losing my optimism that we will be able to finish quickly if you keep contesting your own report, but we will see where we get to. If you could turn to paragraph 88, the same paragraph, but now subparagraph (ii). {F1/1/46}.

A. Yes.

Q. Here you describe another agenda item that the Investment Committee, you say, "considered the decision to be difficult" about. This is relating to the Mando Corporation. That agenda item was also referred to the Special Committee, and you say at the bottom of the partial paragraph on this page, you say:

"I understand from my report on the NPS prepared for

[Page 121]

the Claimant in April 2015 that the Investment Committee had concluded that it would be' difficult to make a decision on this Mando Corporation issue."

Do you see that, Professor?

A. Yes, correct.

Q. Now, I want to take a look at the Voting Guidelines. This is exhibit R-57. It should be tab 27 in your second volume there. {R/57/1}.

I want to look at Article 8(2), which is on the second page. {R/57/2}. Article 8(2) says that for items which the committee, and this is the Investment Committee:

Now, if I'm not mistaken, the Claimant put in a slightly different translation of this, but it does not change the language of "may request".

A. Yes, the Voting Guidelines does say "may request", but also on the other hand the Fund Operational Guidelines says "request" as a mandatory statement.

So while the operation guideline is a mandatory provision -- has mandatory language, the Voting

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Guidelines has a discretionary language. And therefore the 8(2) -- Article 8(2) of the Voting Guidelines would be in violation of the operation guidelines.

Q. And you actually said this morning that those Voting Guidelines were amended a few years later to remove the discretionary language that said "the -- Investment Committee may request"; correct?

A. Yes. That is what I had said in the presentation and during the presentation I intended to explain that it was revised from this 'discretionary' form to a 'mandatory' form.

Q. And I understand that, Professor. Your only concern or your only dispute with these -- the language of these articles is whether it says "may request" or "request", but both of them include as a first step that the Investment Committee must find the issue to be 'difficult'; correct?

A. Well, I actually think that this language stipulates a mandatory -- that regarding the finding that it is mandatory, and I don't think this is only my own view. For example, during the SK case, it appears that the Investment Committee also felt that this was a mandatory requirement. So it appears that other people also felt the same way.

And so when the superior norm, the superior statute

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or provision says "decide" which in Korean language is synonymous to "shall decide", whereas the subordinate provision provides differently, that would be a violation of the senior or the superior provision by the subordinate provision, and violation of a subordinate provision would in turn constitute a violation of the superior provision.

Q. Thank you, Professor, but that was not at all my question, which I think the tribunal heard, which was simply that the first step is that they have find it is ' difficult', and then we may have a dispute as to whether it is 'mandatory' as to what they do after they find it is 'difficult'. But given the time left, I would like to move on from this, and talk about the second way you discuss in which an item might come before the Special Committee, and this is in paragraph 86 again of your first report, (ii), and hopefully we won't have a big dispute about this, but you say a second way is that the chairperson can request that it be referred to the committee. Do I have that correct?

A. Yes, correct. Upon the request by the chair of the Expert Committee, the Investment Committee must refer to the Expert Committee without fail.

Q. Thank you for the flourish you have added to that which

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was not actually in paragraph 86, but we understand that all of this 'mandatory' and 'must' language is your opinion.

If I can ask -- sorry, go ahead.

If we can actually turn to the Fund Operational Guidelines, this is exhibit C-194. It is tab 25 in volume 2 in front of you. {C/194/1}.

MR PETROCHILOS: Forgive me, it's not clear to me that the Professor understands that when there is a characterisation by counsel, for example this "flourish", he has an opportunity to react.

MR TERCEÑO: Mr President, I don't think that this witness has shown any hesitancy in saying whatever he wishes to say.

THE PRESIDENT: That was more of a comment to the tribunal. I don't think -- there was no question to the witness or to the expert. Let's leave it at that.

I would just encourage the Professor to listen very carefully to the question and then answer the question if you can, it would be helpful.

A. Yes, I will do so.

THE PRESIDENT: Dr Petrochilos' comments is also well taken. You can make comments on the expert's evidence, but then you should give him a chance to respond. The tribunal can listen and take note of the evidence that is being

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provided.

MR TERCEÑO: Certainly. Thank you, Mr President. I will try to keep my own comments to a minimum, so we can wrap this up.

So looking at exhibit C/194, this is where we have the language, some of the language, 'mandatory' language, that you were just talking about. Looking at article 5 -- so Article 5(5)(6) which is on page 4, at least in the English. {C/194/8}

This is the article that says that the Special Committee, and again we have a discrepancy in the translations, but we will use the Claimant's translation for these purposes, which is that it "shall review and decide" on the other matters, and number 6 says:

"Other matters that the Experts Voting Committee Chairperson deem necessary."

This is the basis for you saying that if the chairperson deems a matter is necessary to come before the Special Committee, it must come before the Special Committee; correct?

A. Yes, it is Article 5, paragraph 5, subparagraph 6, but there's also one more. But for the time being, yes, correct.

Q. Okay. I would think that one 'mandatory' provision is

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enough, but if you want to comment on that, I'm certainly happy for you to.

A. No, I'm fine.

Q. If we look at the chapeau of this Article 5(5), the introductory language, it says that these other matters that we see in subparagraph 6 are matters regarding the exercise of voting rights for stocks held by the National Pension Fund. So do I understand your position to be that for any matter regarding the exercise of voting rights for stocks held by the National Pension Fund, the Special Committee chairman can require that it be decided by his committee?

A. Well, actually if you read the entire paragraph 5, so that is not only the subparagraph 6 that you've just referred to, but also subparagraphs 1 through 5, you will see that paragraph 5 actually sets forth the scope of duties of the Expert/Special Committee.

So what is set forth, at least in subparagraphs 1 through 5, are duties -- are matters that the Expert Committee must do as its obligation -- or mandatorily must do.

As part of that definition, of listing of the scope of duties of the Expert Committee, there is the subparagraph 6 which says:

"Other matters that the expert ... committee chair

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finds necessary."

And so, if you look at, for example, subparagraph 1, it says:

"General principles/details ... for the exercise of voting rights."

Which is something that the Expert Committee must review and decide. Likewise for the history of voting rights exercise by the NPS Investment Management Division, as well as number 3:

"Matters requested by the Fund Operation Committee Chairperson."

Number 4:

"Matters that the NPSIM request decision for as it finds them difficult to decide whether to approve or disapprove."

And 5:

"Matters to guarantee effectiveness of voting rights exercise regarding dividends."

So Article 5 itself lays out the scope of duties and paragraph 5 lays out the duties that are mandatorily required by the Expert Committee.

So the way I read subparagraph 6 is that even though the chair of the Expert Committee 'may' decide to -- may decide to -- decide regarding the exercise of voting rights, he may decide to, he may decide not to, but once

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that decision is made, then we go back to paragraph 5, where it says that that matter 'shall' be reviewed and decided by the Expert Committee.

Q. Thank you, Professor. You have strayed very far afield from my question once again. So please let me just put it simply.

Subparagraph 6 says that the Special Committee chairman can request and if he does make the request, and I know that you say it is mandatory, that his request must be honoured, that other matters be referred to his committee, and my question is simply: do we understand "other matters" to mean other matters regarding the exercise of voting rights for stocks held by the National Pension Fund as the article says at the beginning?

A. Yes.

Q. Thank you. I only have two more points I want to ask about, about this, and then we will be done. So let's see if we can wrap things up.

Article 5(3)(2) in these same guidelines gives the Minister of Health and Welfare authority over "preparation of strategic asset allocation plans". Do you agree with me that "strategic asset allocation plans" could regard the exercise of voting rights?

A. Asset allocation is not the same matter as exercise of

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rights -- voting rights that come as part of the shares owned by the fund. I would consider those two to be separate issues.

So what we've read here under subparagraph 2 in terms of "asset allocation", I would consider would be separate from the exercise of voting rights that come with the shares owned by the fund.

The exercise of voting rights for the shares owned by the fund would be governed, for example, by the principles set forth by the National Finance Act such as the principles of profitability, public benefit, and stability, and would be different. Therefore, I believe the exercise of voting rights relates to the aspect of asset management, rather than asset allocation. I would consider, to be -- would be separate or different from the matters of asset allocation.

Q. I do understand the difference between exercising voting rights and providing or preparing a strategic asset allocation plan, but just so that I am certain on your allegation, is it that you say it's impossible for a strategic asset allocation plan to have any connection to the exercise of voting rights?

A. Not being a finance expert myself, I do not know if there are any ways, and if so, how exercising a voting right may be or could be connected to strategic asset

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allocation. But at least from a legal perspective, I would think that both asset allocation of the fund that we see here, as well as the exercise of voting rights, would fall under public authority or public power, and that it appears here that asset allocation authority is specifically prescribed to the Minister of Health and Welfare. The exercise of voting rights, I would think, would be subject to the National Finance Act which governs all government funds.

But still, to answer your question, not being a finance expert myself, I do not know exactly if there is any way how to connect exercise of voting rights to strategic asset allocation.

Q. Let's try one last question, Professor.

If we look at exhibit C-109, this is the enforcement rules of the National Pension Fund operational regulations. It is tab 30 in the second volume. {C/109/1}.

Article 40 subparagraph 1, reads:

"Regarding equities held under the fund's name ..."

And that is The National Pension Fund it is discussing ...

THE INTERPRETER: Counsel, could you wait. The screen hasn't caught up and we haven't been able to find that.

Q. Sorry, just let me know when you're ready, I apologise.

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{C/109/11}

I'm just looking at Article 40, paragraph 1.

"Regarding equities held under the fund's name, excluding any of the following circumstances", and if you see those circumstances under subparagraphs 1 and 2, they're just about the percentage being held by the fund. But excluding those circumstances, "voting rights shall be exercised through the deliberation and resolution of the Investment Committee".

I just want to ask you, Professor, is it your testimony that Article 5(5)(6) of the Fund Operational Guidelines, that allows the Special Committee chairman to call items to its own committee for decision overrules these enforcement rules of the National Pension Fund and allows him to take that authority for him despite these enforcement rules?

A. Yes, basically the Fund Operational Guidelines are grounded in the law. The grounds of the fund operation guideline are provided in the law and then the Voting Guidelines are then grounded off of the operation guidelines.

Now, what we are looking here is the operational regulation of the National Pension Fund. I would like to look at Article 1 of that.

If you turn to Article 1 of the operation regulation

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of the National Pension Fund that we're looking at, it appears that these are provisions that have been established by the NPS itself as rules governing its operation. And so when there is a conflict between the operation regulation and the operational guidelines or that is based on a legal delegation or the Voting Guidelines which is based on the operational guidelines, I would say that the latter, the guidelines, would have precedence over the regulation that we are seeing here. That is one way of my interpretation. The other interpretation that I may provide is the fact that the issue at hand in this case was a case when the matter was difficult whereas the provision that you just took me in the enforcement rules of the operational regulations addresses regular situations that are not difficult and addressing how in such normal, ordinary situations, the work would be divided.

Q. If I can, Professor, we've seen in paragraph 86 and paragraph 88 subparagraph 1 and paragraph 88, subparagraph 2, and in at least two excerpts from regulations governing the activity of the fund, that it is up to the Investment Committee to first find a matter difficult; correct?

A. By paragraph 86 and 88 are you referring to my first expert report?

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Q. I am, Professor. I'm referring to the paragraphs that we have looked at in some detail within the last half hour.

A. I would truly appreciate if you could repeat your question.

Q. I'm tempted to let your expert report speaks for itself, but I will repeat the question for you.

In those paragraphs you say at least three times, and also in paragraph 87 you have an excerpt from regulations, all of which say that the Investment Committee has to find a matter to be difficult. Is that what is written there?

A. Yes, in principle that is correct.

MR TERCEÑO: Thank you, Professor, very much for your patience with me.

Mr President, I have no further questions.

I apologise, we have gone about 25 minutes over the allotted time.

THE PRESIDENT: Thank you very much, Mr Terceño.

Dr Petrochilos, any questions in redirect?

MR PETROCHILOS: Will you indulge for 30 seconds, sir? I need to consult with my colleagues. (Pause).

Mr President, we're happy to move on. No re-examination.

THE PRESIDENT: No questions? Any questions from my

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colleagues?

Questions from THE TRIBUNAL

MR GARIBALDI: Professor Lee, I don't want to lengthen this too much, but we have, among the issues before us, is how to interpret these regulations in three different documents which talk about the circumstances in which a question 'may' or 'must' be referred to the Experts Committee.

All this is a preface for my question. The preface continues.

I understand your position, Professor Lee, to be that the difficulty of a matter is an objective criterion which somehow informs the way that these rules operate.

I understand the Respondent's position to be that these -- the difficulty is something that results from the voting process, in this case, in the Investment Committee, and it is difficult if the decision cannot be reached and it is not difficult otherwise.

Now, this is -- the way I understand this exchange at the moment, my question is this. If you turn to the document on tab 30, the enforcement rules, page 42, Article 40, and I'm going to use that as an example because all three rules that we have looked at are

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similar in structure. {C/109/11}

Are you ready for the question?

All right.

If you read this provision, Article 40, paragraph (2), literally, if you read it literally, it says that:

"Notwithstanding Paragraph 1, if the Investment Committee ..."

I skip the others:

"... finds it difficult to decide whether to vote in favour or against a matter, they shall report this to the CEO, and the CEO shall request the National Pension Fund management committee to decide on such matter."

Now, it seems to me that if you apply this literally, the only situation in which this can happen is that the Investment Committee takes a vote but fails to obtain a majority in favour of one position or the other.

Do I understand this correctly? Is this the way it works if you interpret this literally ?

A. I do not think so, sir; because this language does not say that the Investment Committee is to find a matter difficult to decide "by vote". It does not say in the language that the process by which the Investment Committee determines a matter to be difficult

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is by vote.

It is -- once again my understanding is that it's an issue of whether the matter itself is difficult to decide or not rather than it being -- have to be reached by a vote.

One of the language that supports my reading is the fact that in addition to the Investment Committee, if you read further, there is the relevant department head which would be an individual. That is also a party that can make that decision, and so because it's a single person that department head is expected to then determine whether a matter is difficult or not, and if he finds the matter is difficult, then he is expected to report that to the CEO, naturally, and then the CEO shall request that to the operational or the management committee.

MR GARIBALDI: Okay. Thank you. I think that clarifies the matter.

So I was wrong. It is not necessary for the committee to vote on the matter and fail to achieve a decision for the matter to be considered difficult.

The difficulty I still have is that the committee acts collectively So in some way the committee has to decide that the matter is difficult according to the literal interpretation.

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How does the committee decide, without voting, without making a decision, that the decision is difficult, that voting on that decision would be difficult ?

A. It is in anticipation of such cases that an Expert Committee has been provided. Because, if a member or members of the Investment Committee feel that a matter is difficult intuitively, then they may feel that it is difficult and therefore may decide that through vote. However, if it attempts to reach a decision by vote, there would also be issues such as what method of vote would be fair, so there will be issues of different ways of voting and which would be fair versus not. This is inherent because the Investment Committee is a committee. It is a collective body of people exchanging opinions, and because of that, the Expert Committee, I believe, has been provided for to deal with such cases that are intuitively considered difficult by -- difficult, which is illustrated in the case at hand. It was an issue that was considered controversial and I would believe that that is the example of issues that are difficult that should be referred to and decided by the Expert Committee. I believe that the Expert Committee is provided to resolve such situations. I believe that the reason for existence of the Expert

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Committee is to resolve such cases.

MR GARIBALDI: Thank you.

THE PRESIDENT: Professor, I'm afraid there will be a couple of more questions.

In both of your reports you are discussing the exercise of governmental powers. In your first report there is the section dealing with the exercise of governmental powers and you say that the NPS exercises delegated governmental powers, and there is a similar section in the second report.

So my question is: is "powers" a term of art -- a defined -- a legal term with a defined meaning, clearly defined meaning under Korean law?

A. Yes, I consider it to be so.

THE PRESIDENT: What does it mean?

A. When an institution is established, the law would set forth the scope, the boundaries of that institution 's ability and authority and rights.

THE INTERPRETER: I'll correct that upon the Professor's instruction.

A. So the law would set forth the boundary or the scope of that institution 's capacity.

And usually the law would set forth that as part of that capacity the institution in question may do these actions and usually the institution would be allowed to

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perform only within that.

So the law that provides the legal basis for establishing an institution would set forth in the previous -- the described manner -- the capacities, the authorities that that institution is allowed to exercise or is entitled to, and I believe that that is how the rights that are entrusted to the State are defined. In other words, by laws that are enacted by the legislative body.

And an example of these rights that are entrusted by the State would include, for example, the right to -- or the authority to issue dispositions to the public or the people.

So an example in the case of the NPS would be that NPS is provided with the power or the authority to determine who becomes a subscriber to the pension programme and also the NPS is given the power to impose the pension -- the pension contributions or the pension premiums that do have the characteristics of a quasi tax or a semi tax.

THE PRESIDENT: I give you four examples. Would you agree that all of these are forms of exercise of power. Tax decision, a tax authority imposes a tax; a police arrests a person; NPS buys shares; and NPS or any other authority provides a payment, pension payment or another

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form of payment to a citizen.

Are all of these forms of exercise of governmental power in Korean law?

A. Yes. I believe that all four are forms of government power exercised in Korean law. The first two of your four examples, I believe, would constitute dispositions that may be imposed against the will of a citizen, whereas the third example, the NPS buying shares, would actually be conducted as part of the mandate provided under the Constitution to provide social welfare and also to secure the stable financial resources to provide the social welfare benefits.

And therefore in buying shares the share purchase would have to be done under the four principles that are set forth in relation to that, and so it would not be just any share purchase, but would have to follow the guidelines that are set forth in the related regulations and statutes. Likewise would be exercise of voting rights by the NPS on those shares. Those would also have to follow the same statutory guidelines that are provided.

The fourth example of the payment of pension benefits and other benefits, that would also fall under the category of power exercise, but that would actually be part of the laws that govern overall government

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funds, because as I previously mentioned, other government departments and offices also manage funds and there are specific and separate regulations in law regarding the management of those funds, including who to pay those pension benefits.

So even though these four examples that you have given me may be further subdivided into whether they constitute a disposition or not, I do consider that all four would constitute an action or exercise of a State power.

THE PRESIDENT: Thank you very much, Professor. That was very helpful.

There are no further questions from the tribunal.

So this concludes your examination, Professor Lee. Thank you very much.

THE WITNESS: (In English) Thank you very much.

THE PRESIDENT: This might be a good time to break for a coffee or tea and we resume in 15 minutes, 4.20. I believe it will be Professor Kim then. We will start with his presentation. Thank you very much.

(4.07 pm)

(A short break)

(4.24 pm)

PROFESSOR SUNG-SOO KIM (called)

(Evidence given through an interpreter)

[Page 142]

THE PRESIDENT: Good afternoon, Professor Kim. You have been called as an expert witness in this hearing and, as you confirmed in your two expert reports, you will be now required to confirm that the evidence that you will be giving will be in accordance with your sincere belief. So for that purpose would you please read the statement that you have in front of you or should have in front of you on the desk.

THE WITNESS: I solemnly declare upon my honour and conscience that my statement will be in accordance with my sincere belief.

THE PRESIDENT: Thank you very much, Professor.

I understand you will be making a presentation instead of a direct examination. So the floor is yours.

Presentation by PROFESSOR SUNG-SOO KIM

PROFESSOR SUNG-SOO KIM: I will begin.

Good afternoon, members of the tribunal. I am Respondent's legal expert, Sung-soo Kim. I'm a Professor at Yonsei Law School, located in Seoul, Korea. My main research field is Korean administrative law.

I have submitted two expert reports as an independent expert in these proceedings. Below I will summarise the contents of my report and provide some explanations.

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Next slide, please.

I deal with the following two main issues in my expert report.

First, I will review whether the NPS is considered a State organ under Korean law. In conclusion, to provide my conclusion first, it is that Korean law exhaustively lists entities that make up the government organisation.

I would also like to state that my opinion here is not a discussion of international law. Although the term "State organ" is not used under Korean law, I have no doubt that the National Pension Service does not form part of the Korean government organisation.

Second, I will review whether the NPS's exercise of voting rights pursuant to its investments constitutes an exercise of government power.

I want to clearly state that although NPS has been entrusted with the management and operation of the National Pension Fund by the Minister of Health and Welfare, the exercise of voting rights on NPS fund management is not an exercise of governmental power.

Third slide.

Let me briefly explain the most important laws and acts in examining the two issues mentioned.

The first is the Constitution of the Republic of

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Korea. The Constitution directly establishes State organs called constitutional institutions and requires the organisational structure of these institutions to be determined by law.

The second is the Government Organization Act. The Government Organization Act was enacted in accordance with Article 96 of the Constitution. Its purpose is to ensure that the establishment, organisation and function of each executive Ministry shall be by law and that national administrative affairs be carried out systematically and efficiently.

As I have stated, the National Pension Service is not regulated by the Government Organization Act.

Third is the Act on the Management of Public Institutions. The Management of Public Institutions Act, although it has nothing to do with the classification of State organs, because it was discussed in his -- in Professor Choong-kee Lee's expert report several times, I'll touch upon it.

The Act of the Management of Public Institutions was enacted to determine basic matters related to the operation of public institutions and to rationalise the management and enhance transparency of these institutions as entities independent from the national administrative organisation.

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Currently the Act on the Management of Public Institutions applies on general and simple matters, over 300 public institutions.

Public institutions including NPS, however, are not State organs. So it is my opinion that these institutions, public institutions, designated under this law are not State organs.

Finally, there is the National Pension Act. The National Pension Act established the NPS as a public institution. The Minister of Health and Welfare entrusts NPS, National Pension Service, with matters related to the management and operation of the fund.

Slide 4.

I would like to talk about the classification of State organs in Korean law. In order to understand the structure of government in Korea, it is important to look at the basis of State organ classification under Korean law.

As I have stated, Article 96 of the Constitution stipulates that the establishment, organisation and function of each administrative Ministry shall be determined by law, which contains the principle of administrative organisation legalism.

Administrative organisation legalism, according to Article 96 of the Constitution, is not just a legal

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concept but a constitutional principle. Administrative organisation legalism is a principle of Korean law that the establishment and powers of government organs shall be prescribed by law and it is one of the most important principles.

The law mentioned in Article 96 of the Constitution is the Government Organization Act. The Government Organization Act stipulates in a very narrow sense, and also exhaustively lists, the power and function of government bodies.

Slide 5.

According to the Korean legal system, according to the Constitution and the Government Organization Act, the classification of State organs can be classified into three forms. So there are three forms of State organs under Korean law.

First, State organs that are constitutional institutions. The second category is the State organs established under the Government Organization Act and other Acts enacted pursuant to the Constitution.

Third is a State organ established as a central administrative agency under other individual acts pursuant to Article 2 of the Government Organization Act.

Slide 6.

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So first on constitutional institutions.

In the morning session we had discussions on constitutional institutions but I don't think we had an in-depth discussion.

As I said, constitutional institutions are State organs directly established under the Constitution. State organs, which are constitutional institutions, are directly established according to the Constitution, and as you can see here, the Constitution directly establishes the National Assembly, the Prime Minister, the Constitutional Court, and the National Election Commission, etc.

Slide 7.

The second is government organisation -- State organs established according to Government Organization Act.

So the second category is State organs established under the Government Organization Act and other Acts enacted under the Korean Constitution.

Under the Government Organization Act, national administrative agencies, including central administrative agencies, special regional administrative agencies, affiliated agencies and representative administrative agencies will be established in accordance with the law.

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Among them major institutions established under the Government Organization Act, including individual ministries, are referred to as central administrative agencies.

And the central administrative agencies are again divided into three categories: Bu, Cheo and Cheong.

Bu is a Ministry affiliated to the President.

Article 26 of the Government Organization Act requires the establishment of 17 "Bu"s. Cheo is a Ministry affiliated to the Prime Minister. Five Cheos are established under the Prime Minister.

Cheong is an agency that is established under Bu.

Let me explain. The central administrative agencies mentioned earlier, Bu, Cheo and Cheong. Article 26 of the Government Organization Act establishes the Ministry of Health and Welfare which is the Ministry at issue in this case under the control of the President.

Article 23.1 of the Act explicitly establishes the Ministry of Government Legislation under the Prime Minister.

In addition, in accordance with article 38, paragraph 2, the Korea Disease Control and Prevention Agency was recently established under the Minister of Health and Welfare and this was only possible because there was a revision to the Government Organization Act.

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Slide 9. As such, State organs are exhaustively listed as I have stated numerous times under Korean law in accordance with administrative organisation legalism.

Furthermore, amendments have been recently made to Article 2, paragraph 2, of the Government Organization Act, and this clearly demonstrates that Korean administrative organs are listed in an exhaustive way, and this provides us with better understanding.

For example, as of September 12, 2020, Article 2, paragraph 2 of the Government Organization Act was amended. The amendment states that central administrative agencies cannot be established except as prescribed by this Act, and the Acts set forth in the following subparagraphs.

So without being prescribed by this Act, central administrative agencies cannot be established, and this is clearly stated in the amendment. In this way the amendment re-affirms the principle that central administrative agencies must be established pursuant to laws enacted by the National Assembly and concurrently that they be prescribed in Article 2, paragraph 2 of the Government Organization Act, and this is in accordance with the government -- this is in line with the Article 96 of the Constitution.

In the same way, in the same vein, the 2014 Ministry

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of Safety and Public Administration press release mentioned in my report explains that the purpose of the amendment is to ensure conformity in managing government organisation and to facilitate understanding of the composition of the executive branch for the people of Korea.

So the most important purpose of the amendment is to provide clarification on the central administrative agencies so that the citizens of Korea can understand which government organisation bodies they need to be connected to in cases that are relevant to them.

Slide 10.

Korean law stipulates in great detail and systematically the way State organs are to be established and removed.

Under Korean law, if a legislator intends to establish an institution as a State organ, it must be established as a central administrative agency through the enactment of individual laws and there must be amendments to Article 2, paragraph 2 of the Government Organization Act. So it has to explicitly be written down in Article 2, paragraph 2, of the Government Organization Act in order to establish a new central administrative agency.

In contrast, the NPS is designated as a public

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institution under the Act on the Management of Public Institutions. So it is not an administrative agency, nor a central administrative agency, according to the Government Organization Act.

The NPS was not established as a central administrative agency even under the National Pension Act. So there are eight central administrative agencies listed in each subparagraph of Article 2, paragraph 2 of the Government Organization Act and NPS is not included in one of the eight agencies listed in the Act.

In addition, NPS was not established as an administrative organisation under the Ministry of Health and Welfare similar to the Korea Disease Control and Prevention Agency.

What does this mean? This shows that NPS, which is a public institution, was not established as part of the Government Organization Act and this expresses the legislator 's intent of not establishing NPS as part of the Korean Government organisation.

Therefore, organisations exercising some public functions or government functions, and all of these organisations that exercise some public functions or government functions, form part of the Korean Government Organization Act was Professor Choong-kee Lee's approach and argument, and this is not aligned with Korean

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administrative law professionals and Korean Constitution professionals.

This has never been heard of.

Professor Choong-kee Lee's functional approach is not aligned with Korean law, the Korean Constitution, and the Korean Government Organization Act. It may be a discussion on international law.

Thus the argument that the NPS is a State organ because it exercises public or governmental functions, if this argument is heard by my colleagues in the field of Korean law, Constitution and administrative law, would not be something that these professionals can agree to.

Slide 11.

The last classification is State organs that are specifically established by other individual statutes as a central administrative agency under the Organization Act.

So these agencies are established by individual statutes and not by the Government Organization Act. And as I have stated earlier, in the past in individual Acts they would establish central administrative agencies, but in 2020 there was an amendment to the Government Organization Act, and with the amendment these agencies must be listed. They have to be relisted

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and reconfirmed as central administrative agencies in Article 2, paragraph 2 of the Government Organization Act.

For example, Article 3 of the Financial Services Commission Establishment Act establishes the Financial Services Commission under the jurisdiction of the Prime Minister and it is stipulated that it is a central administrative agency and this is prescribed in Article 2, paragraph 2, of the Government Organization Act.

Slide 12.

It is important that a distinction be drawn between administrative agencies and central administrative agencies. Central administrative agencies, as I have stated numerous times, they have to be established according to the Government Organization Act and other individual Acts, and these central administrative agencies are direct administrative agencies that are established as part of the State administrative structure alongside constitutional institutions, they are set up under the Government Organization Act as a central administrative agency.

On the other hand, the concept of an administrative agency, an administrative agency, this is a unique definition in the Administrative Litigation Act and the

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Administrative Appeals Act.

If certain administrative tasks are performed by an administrative agency, if it performs certain administrative tasks, private organisations or private individuals such as private social welfare corporations can be regarded as administrative agencies to which the Administrative Litigation Act and the Administrative Appeals Act applies.

Slide 13.

Therefore the central administrative agency is a State organ. So the two are equivalent, a central administrative agency is obviously a State organ.

However, administrative agencies, just because they are an administrative agency, does not mean they are State organs.

As I said, the NPS is a public institution under the Public Institutions Act and does not fall under any of the State organ categories, the three State organ categories that I have explained.

This is because the National Pension Service is a so-called indirect administrative agency established as an independent legal entity to perform certain administrative tasks of the State independently with political neutrality and it should autonomously and professionally carry out these administrative tasks with

[Page 155]

its own legal personality.

So the National Pension Service is an indirect administrative method. Therefore the NPS exists outside of the State administrative structure.

Slide 14.

Now, let's look at the Act on the Management of Public Institutions.

Professor Choong-kee Lee says that the fact that NPS was classified as a fund management type quasi government institution among public institutions is evidence that the NPS is a State organ. That was his argument and logic.

However, the classification of public institutions and the concept of State organs are irrelevant. Those who have studied Korean law for a long time will accept this as obvious.

As I have said, the Ministry of Economy and Finance determines and categorises public institutions based on the size of their assets and whether they generate revenue on their own.

As you can see, according to Article 1 of the Act, the legislative purpose of the Public Institutions Act is the establishment of self-controlling and accountable management system of institutions performing, in part, tasks with public nature.

[Page 156]

In the Public Institutions Act, because of this, they carry out stringent management performance evaluation of public institutions.

And this is because public institutions are performing public tasks and they receive financial support through tax revenue, and that is why there has to be check and balance and transparency required from these institutions and there has to be review from the National Assembly.

Currently in Korea there are more than 300 public institutions and the Public Institutions Act regulates based on principle uniformly all of these public institutions. Again, the fact that an organisation has been designated as a public institution under the Public Institutions Act does not mean that it is a State organ under Korean law. This argument does not stand.

Slide 15.

As shown on this slide, if you see Article 4 of the Act on the Management of Public Institutions, Professor Choong-kee Lee's argument that the State and local governments are of course public institutions do not make sense because, according to this provision, the public institutions cannot be State or local governments.

Legal entities, organisations or institutions other

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1 than the State or a local government may be designated 2 as a public institution.

3 So non-State or local governments can only be 4 designated as public institutions

5 That is why public institutions have been separated 6 from the State administrative organization and they are 7 given separate legal personality. And it is important 8 that they have accountability, political neutrality and 9 independence.

10 And that is why they have been established to have 11 independent legal personality from the State and local 12 governments.

13 Slide 16.

14 Now I would like to discuss the National Pension 15 Act.

16 First I would like to point out some key provisions 17 that demonstrate the nature of NPS in the National 18 Pension Act.

19 First, Article 26 of the Act shows that NPS has 20 a separate legal personality. According to Article 30, 21 the NPS has executives such as directors and auditors, 22 and article 38 indicates that the board of directors 23 deliberate and resolve important matters of NPS.

24 Article 101 of the Act stipulates the establishment 25 of the National Pension Fund and the Minister of Health

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1 and Welfare entrusts the management and operation of the 2 fund to NPS pursuant to article 102, paragraph 5 of the 3 Act.

4 More importantly, however, Article 102, paragraph 2 5 of the Act and Article 4 of the Fund Management 6 Guidelines -- this is the Article 4 that was mentioned 7 numerous times during evidence of Professor Lee -- and 8 that this Article 4 of the Fund Management Guidelines 9 stipulate profitability and stability as the fund's 10 operating principles.

11 So the fund has to be managed in an efficient way to 12 maximise profitability, and in Article 102, paragraph 2, 13 that is the intent of this article.

14 This tells us that the NPS' exercise of voting 15 rights pursuant to operation of the Fund is not 16 essentially different from the operation of funds by 17 general corporations.

18 NPS, as it operates and manages its fund, conducts a 19 private legal activity, a commercial activity, and it is 20 not an exercise of government power.

21 Now let me turn to the status of the NPS in 22 accordance with other Acts. Slide 17.

23 Professor Lee strongly stresses that the NPS can be 24 subject to an administrative litigation as an 25 administrative agency. However, as explained earlier,

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1 this is because the NPS is a public institution that can 2 exercise some administrative authority in, for example, 3 collection of pension premiums, determination and 4 disbursement of benefits, etc.

5 So these are some administrative authority, and this 6 is in fact the question given by the tribunal. What is 7 the power? Within the power there's administrative 8 power, but then there's also the commercial power and 9 then there's also the transactional power in the sense 10 of the private law nature.

11 And the -- all the institutions that have 12 administrative authority can be subject to a petition. 13 Therefore, the fact that the NPS is a petition accepting 14 institution under the Petition Act, and Professor Lee 15 stated something about this. If you ask me a question 16 on this one, I will be happy to give you an answer.

17 And Professor Lee went on to say that the NPS is 18 subject to the National Assembly audit of the State 19 administration because it is a State organ. But private 20 organisations that are clearly not State organs... The 21 Yonsei University that I work in, this is a private 22 university, but this is in fact also governed by the Act 23 in question because it does receive some funding from 24 the State, and then it also receives the National 25 Assembly audit. Does that mean that the

[Page 160]

1 Yonsei University is a State organ? It is not the case.

2 Slide 18, please.

3 Professor Lee is saying that the NPS employees are 4 governed by the State Public Officials Act, but then 5 I don't agree with this point. I actually have 6 presented a 2020 Korean Supreme Court Decision in my 7 report, then moving on to slide 19, this is on whether 8 the NPS is exercising governmental power.

9 The NPS is entrusted its power by the Minister of 10 Health and Welfare. This is correct. But the NPS's 11 exercise of its voting rights, under Korean law, is not 12 the exercise of governmental power at all. Of course, 13 NPS is performing some administrative functions, but not 14 all of its functions are administrative.

15 For example, as the NPS manages and operates the 16 Fund, it performs activities such as lending or 17 purchasing shares, and these activities, according to 18 the Korean Supreme Court, are merely commercial 19 activities that it performs as a private economic 20 entity.

21 In German terms, it's "fiskus". It's the -- I would 22 say the vault of the country.

23 So this is subject to the domain of private law, 24 even though this is a State's financial activity. And 25 it also has the freedom as well. So the National

[Page 161]

1 Pension Service exercises autonomy in managing the fund.

2 The State Property Act classifies the 3 National Pension Fund as general property within the 4 category state property and the general property is 5 managed according to the principle of private autonomy, 6 and its management has a private law nature, as held 7 firmly by the Korean Supreme Court multiple times.

8 This naturally leads to the conclusion that the 9 exercise of a shareholder vote in managing and operating 10 the fund has thus a private law nature.

11 So this is not the exercise of the public power. 12 This is a commercial activity and this is -- this has 13 the private law nature, private law nature.

14 So all these points that I have highlighted so far 15 are in line with the fact that the legal action arising 16 from the NPS's management and operation of the fund is 17 to be dealt as a matter of civil, not administrative 18 litigation.

19 You actually asked the question in the morning.

20 Are the NPS employees, when they are, for example, 21 committing the illegality, when they are working, who 22 bears the liability? That was the question there. 23 According to the State Compensation Act, the NPS 24 definitely has to bear the civil liability, and the 25 country does not bear any responsibility because the

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1 country's State Compensation Act only recognizes state 2 or local government officials, or a person entrusted 3 with public duties, as the subject of state 4 compensation.

5 The legal entities and the employees that are 6 independent entities, if their action is incurring 7 damages, they should be governed by the civil law.

8 Let me move on to my conclusion.

9 To summarise, on the first issue, the NPS is not 10 a State organ under Korean law.

11 The Korean law exhaustively classifies State organs 12 in three categories in accordance with the Constitution 13 and the Government Organization Act, and a functionalist 14 approach is not an appropriate means to understand such 15 governmental structure.

16 Only an entity that is designated as a State organ 17 by legislature and fits within the three-fold 18 classification can form part of the executive branch.

19 According to this principle, therefore the NPS does 20 not form part of the Korean Government.

21 The Act on the Management of Public Institutions is 22 irrelevant to whether an entity is a State organ. The 23 NPS exists outside of the State administrative 24 structure. It's in German [German spoken]. Indirect 25 State administrative agency.

[Page 163]

1 So the Korean administrative law is affected by the 2 German influence. That is why that is quite commonly 3 understood by the Korean professional who are acting in 4 the field of Korean administrative law.

5 The Act on the Management of Public Institutions is 6 irrelevant to whether an entity is a State organ. The 7 NPS, as I have said, is an institution that belongs to 8 indirect state administration. The NPS is an 9 administrative agency, but that does not mean that that 10 is a State organ and the Board of Audit and Inspection 11 Act and the Petition Act are totally irrelevant to the 12 subject. And of course once again the NPS employees 13 aren't public officials under the State Public Officials 14 Act, and Professor Lee didn't in fact offer his opinion 15 on this matter.

16 Last slide. Then on the second point, second issue, 17 my conclusion is that the NPS's exercise of voting 18 rights is not an exercise of governmental power.

19 First of all, the NPS performs some administrative 20 functions, but the exercise of a shareholder vote is not 21 an administrative act. Entrustment or delegation of 22 power does not automatically result in the power 23 entrusted as being governmental. This is too naive, and 24 this is in fact too unidimensional.

25 What is important here is that what exactly is the

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1 nature of how this power is being exercised. So the 2 exercise of a shareholder vote is a commercial act.

3 Second, the NPS is autonomous in its management and 4 operation of the fund. And that is why we call it 5 a public institution that has a separate legal entity, 6 a personality.

7 And Professor Lee actually didn't offer his opinion 8 on this, but then the National Pension Fund actually is 9 covered by the Korean law as a general property to which 10 the principle of private autonomy applies. This is in 11 fact not an administrative property. This is a general 12 property. And ministerial oversight over the NPS is 13 there, but only conducted in an indirect and macro 14 manner. And also purchase of shares and exercise of 15 voting rights are commercial acts.

16 When NPS does not exercise its administrative 17 powers, in other words, when damages are incurred as a 18 result of managing and operating the Fund, the damages 19 claims are to be governed by the civil law, as I have 20 said. This cannot be State compensation litigation at 21 all. This is pursuant to the Korean Constitution and 22 State Compensation Act; and Professor Lee does not offer 23 his opinion on this. I was not able to confirm his 24 clear opinion on this aspect.

25 Thank you very much for your attention.

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1 THE PRESIDENT: Thank you very much, Professor. Are there 2 going to be any supplementary questions on direct?

3 Examination in-chief by MR BHAT

4 MR BHAT: Thank you, Mr President. I understand that 5 Professor Kim has a few corrections to make to his 6 report, if I can just take him through those 7 corrections. Thank you.

8 THE PRESIDENT: Please.

9 MR BHAT: Good afternoon, Professor Kim. If I can take you 10 to footnote number 16 of your first report which is at 11 page 18. You say there that the Act on Public and 12 Private Partnerships and Infrastructure is SSK-15. Do 13 you have a correction to make there, Professor Kim?

14 THE INTERPRETER: Can the operator put up the footnote in 15 question? Page 18, footnote 16.

16 Could you also tell the Professor the page number in 17 the Korean version, perhaps?

18 MR BHAT: I understand it's the same page number.

19 A. So it's footnote 60, not 16. {G2/1/20}.

20 Yes, I see that. I would like to change the SSK-15 21 to SSK-14.

22 Q. Thank you, Professor Kim. If I can now take you to 23 page 23, footnote 80. {G2/1/23}. You have there SSK-14 24 as the State Property Act. Would you like to make 25 a correction to SSK-14?

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1 A. Yes, I would like to correct that to SSK-15.

2 Q. Thank you, Professor Kim. Finally, if I can take you to 3 page 26 of your first report, footnote 93, where it 4 says, again, State Property Act as SSK-14. Would you 5 like to carry out a correction to footnote 93?

6 A. Yes, I would like to correct SSK-14 to SSK-15.

7 MR BHAT: Thank you, Professor Kim. We have nothing 8 further, Mr President.

9 THE PRESIDENT: Thank you, Mr Bhat. I understand it will be 10 Dr Petrochilos.

11 Cross-examination by MR PETROCHILOS

12 MR PETROCHILOS: Thank you, Mr President. Good evening, 13 Professor Kim. Thank you for joining us today and being 14 with us. I'm Georgios Petrochilos for the Claimant. 15 I'll be asking you questions on matters arising from 16 your expert testimony which, sir, we have had the 17 benefit of in written detailed form and we have listened 18 carefully to your presentation today. So I hope our 19 discussion today can be focused. I will try to put my 20 questions to you as shortly and as clearly as possible, 21 and I would ask in turn that you respond in the same 22 way, as shortly and as clearly as you can. Is that 23 agreeable to you, sir?

24 A. Yes.

25 Q. Thank you. I'm grateful for that.

[Page 167]

1 I will simply say for the record, Mr President, that 2 the materials that have been handed over across to our 3 colleagues and of course to the Professor and up to the 4 tribunal are identical save that materials which are in 5 their authentic version in the Korean language are the 6 materials that have been included in Professor Kim's 7 binders. There are two volumes and I will try to 8 identify which volume you would be looking at.

9 And I should also say I'm addressing myself mostly 10 to the tribunal, my colleague Mr Young Park will be 11 monitoring the translations -- interpretation, I should 12 say, so that there will be no misunderstanding between 13 me and our expert. In case he identifies something that 14 may have gone astray, although our interpreters have 15 been nothing less than stellar, he may have to intervene 16 with the indulgence of the tribunal.

17 THE PRESIDENT: Indirect monitoring.

18 MR PETROCHILOS: Professor, you have disclosed --

19 A. Indirect, sorry. Because I have studied in Germany, 20 it's always a bit confusing.

21 Q. Professor, you have disclosed very properly various 22 public positions you hold in the Republic of Korea. We 23 have read about them this paragraph 1 of your first 24 report and in Annex B of that report, including roles 25 that you have at various ministries and at the Supreme

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1 Prosecutor's office.

2 Let me ask you: have you been retained by Korea as 3 a legal expert in any other international arbitration?

4 A. No.

5 Q. Now, were you involved in any way as legal expert or 6 otherwise in an earlier international arbitration we 7 heard about brought by a group of investors called 8 Dayyani?

9 A. No.

10 Q. The existence of that case, Professor, is in the public 11 domain. Are you aware of it?

12 A. I have heard through the media.

13 Q. Right. Did counsel for Korea or anyone else bring any 14 other information to your attention, for example were 15 you given a copy of the award?

16 A. I have not seen that.

17 Q. Was the substance of the award conveyed to you by 18 anyone?

19 A. I have not been told. I have not heard.

20 Q. Were you given a copy of any expert testimony on Korean 21 law that either Korea or the Dayyani claimants adduced 22 in that arbitration?

23 A. Was it written by a Korean?

24 Q. I do not know. I'm asking whether the Professor 25 received any such report.

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1 A. No, I have just seen it in the news reports.

2 Q. All right. Were you told perhaps the substance of any 3 such testimony by anyone you have been working with in 4 the present case?

5 A. Are we still talking about the same case?

6 Q. Yes.

7 A. No.

8 Q. Okay. The reason I ask, sir, is because that case, the 9 Dayyani case, as you will know from the reports that you 10 read, involved a contract with an entity called KAMCO. 11 KAMCO is the Korean Asset Management Company which is 12 a quasi government public institution of the fund 13 management type, just like the NPS.

14 Are you aware of KAMCO as an organisation?

15 A. Yes, of course I have heard of it.

16 Q. There is no discussion about KAMCO in your expert 17 reports, is there?

18 A. I don't think I have written about it.

19 Q. I would agree. You were in the room on Tuesday, last 20 Tuesday, when my friends opposite, counsel for Korea, 21 said that the tribunal in the Dayyani case considered it 22 important that KAMCO had claimed before foreign courts 23 that it was a State organ. Did you hear that?

24 A. Are you saying that somebody from this side had told you 25 that?

[Page 170]

1 Q. Someone from that side indeed, sir, said that, and this 2 is Day 2 of the transcript at page 104, lines 2 to 11 3 {Day2/104:2-11}. So did you hear that or do you need me 4 to remind you now?

5 A. Well, I have not heard of KAMCO here in this room. Back 6 home I have heard of KAMCO, of course, several times in 7 the news. I think I have been told by someone that it 8 was similar with this case, but I don't recall hearing 9 of KAMCO in this room.

10 Q. Can I ask you to clarify what you mean by saying "it was 11 similar with this case"?

12 A. So that was with the Korean Government and with which 13 party opposite? Dayyani, did you say? What I say by 14 similar -- what I mean by similar is that I heard some 15 people talk about going to that arbitration between the 16 Korean Government and Dayyani.

17 Q. I see. Professor, let me move on to something slightly 18 different but still on the same topic.

19 Have you read the pleadings in the present case, by 20 which I mean the submissions of the parties, not the 21 expert reports?

22 A. By the pleadings, which do you mean?

23 Q. I just said the submissions of the parties, not just the 24 expert reports, by which I mean the Statement of Claim, 25 the Statement of Defence and so on.

[Page 171]

1 Have you read those?

2 A. I have to apologise. I was so busy when I was in Korea, 3 I have since getting on the plane continuously been 4 reading my first and second expert reports together with 5 Professor Lee's first and second reports.

6 Q. No apology needed. I just wanted to establish the fact, 7 thank you.

8 Now, do you agree as a public law expert that if the 9 NPS is entitled to be treated in the courts of a foreign 10 state as part of the State of Korea, the Republic of 11 Korea, or as an arm of the Republic of Korea, that would 12 be a relevant factor, perhaps a highly relevant factor, 13 in assessing whether it is an organ of the State? Do 14 you agree with that proposition, sir?

15 A. Well, I have been studying Korean public law for over 16 30 years. I have also had the chance of studying law in 17 Germany for ten years, and I'm in acquaintance with many 18 German colleagues, but frankly speaking, I'm not 19 familiar with the laws of the United States.

20 Q. That was not my question. I will read the same question 21 from the transcript and if you have any difficulty 22 understanding my question, please let me know and I will 23 clarify it for you.

24 A. I apologise.

25 Q. Not at all. We will figure it out.

[Page 172]

1 Now, do you agree that if the NPS is entitled to be 2 treated in foreign courts as a part of the Republic of 3 Korea or as an arm, an emanation of the Republic of 4 Korea, then that would be a relevant factor, potentially 5 a very relevant factor, in assessing whether it is an 6 organ of the Republic of Korea? My question is as to 7 the concept, sir, not as to any foreign law in 8 particular. Is it clear to you now?

9 A. I understand fully the point of your question.

10 The statement that you have just provided is a very 11 general statement, and as a legal scholar, I feel the 12 need to ask for details of the case itself, of the 13 jurisdiction at issue, and also what laws are applicable 14 in that case that you are asking of, because for me your 15 question --

16 THE INTERPRETER: He has asked to not have that last comment 17 translated.

18 Q. I would still like to have it, please.

19 THE INTERPRETER: He does not see the need to.

20 Q. It's already been spoken, Professor. If it highly 21 embarrasses you, I'm happy not to have it, but my 22 colleague will convey it to me anyway. So we might as 23 well have it in the record.

24 A. I would prefer not to are have that mentioned and read 25 into the statement because I am aware that this is an

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1 official procedure, the records of which will be kept. 2 And I would like to have that comment not put on the 3 record.

4 Q. All right. We'll see how we handle that.

5 Now, let me explain my question to you again. 6 Imagine I am KAMCO. In the courts of a foreign 7 State I say I am an emanation of the Republic of Korea.

8 A. Then that claim itself would be incorrect.

9 Q. I see. You have a very clear view on that. That KAMCO 10 could not make that claim?

11 A. Correct.

12 Q. Thank you. We have your view on that.

13 But let me continue with my question. My question 14 was: if you are claiming in a foreign court that you are 15 an emanation of a State, then it must be -- well, it 16 doesn't really mean you, it means if one is claiming, if 17 an entity is claiming that it is an entity of a State in 18 the courts of a foreign State, there must be legal 19 reasons within its own legal system of its own State 20 which justify that. And so with this in mind I asked 21 you: is it not relevant to ask the question whether the 22 NPS is entitled to claim immunity from jurisdiction?

23 A. Well, that is a very difficult question.

24 THE INTERPRETER: He's just asked whether -- I think that 25 was the question posed to me, the interpreter, whether

[Page 174]

1 I understood, and he would like to have the question 2 repeated if possible, one more time.

3 Q. All I can do is read out what I said before.

4 If an entity is claiming in a foreign court that it 5 is an emanation of a State, then there must be legal 6 reasons within that entity's legal system which justify 7 that claim.

8 So with this in mind I asked you: is it not relevant 9 to ask the question whether the NPS is entitled to claim 10 immunity from jurisdiction outside the Republic of 11 Korea.

12 A. Maybe. Also, you are assuming a case where NPS would go 13 to a foreign court and claim State immunity; is that 14 correct?

15 Q. That's correct.

16 A. NPS would not be able to do so because it is not a State 17 organ. NPS would not -- as I mentioned, NPS is an 18 indirect administrative body that lies outside the 19 boundaries of a State organ, and therefore it would not 20 be able to claim that it is -- claim a State immunity in 21 foreign courts. That would be absurd.

22 MR GARIBALDI: Excuse me. I don't think we're getting 23 anywhere.

24 I'm interested in the answer to this question but 25 not exactly to the question that counsel posed, but to

[Page 175]

1 a more abstract question. 2 So I'm going to ask a similar question, but more 3 abstract.

4 So suppose that --

5 THE INTERPRETER: He would prefer a more specific question 6 rather than an abstract.

7 MR GARIBALDI: I'm asking the questions and you, 8 Professor Kim, are an expert and as an expert you are 9 obligated to answer hypothetical questions. So I'm 10 going to put to you a hypothetical question.

11 The question is this: suppose that KAMCO goes to 12 a foreign court and says we, KAMCO, are an agency or 13 emanation or instrumentality of the Korean State. The 14 question is the reasons invoke -- the reasons of Korean 15 law and the connection with the Korean State invoked by 16 KAMCO in that case are relevant to the questions that 17 are posed before us, which is what are the criteria that 18 are relevant for the question of the State organ under 19 Korean law; yes or no?

20 A. I would like to first add the caveat that I have no 21 choice but to provide my answer without knowing the 22 details of that KAMCO case.

23 Not knowing the details of that KAMCO case, I would 24 only be able to guess -- speculate that in that case 25 KAMCO claimed State immunity based on the argument that

[Page 176]

1 it was part of the State. That would be my guess, given 2 the fact that your question was also a very speculative 3 question.

4 Now, your question was whether that would also be 5 the case of the NPS, and my answer would be that would 6 absolutely not be the case for the NPS.

7 MR GARIBALDI: That was not my question. That was not my 8 question.

9 A. So would you mind clarifying your question again, sir?

10 MR GARIBALDI: You may have answered my question. My 11 question has to be with KAMCO goes to court and says: 12 I'm an agency or instrumentality of the Korean State. 13 The reason why KAMCO is saying that, are they relevant 14 or not to the issues in this case?

15 A. Well, it may be relevant or it may not be relevant. 16 Even though I am not familiar with the details of the 17 KAMCO case, if KAMCO claimed State immunity by arguing 18 that it was the extended arm or an agent of the Korean 19 Government, that may be the case.

20 However, my position would be that it would be 21 incorrect for NPS to claim likewise that it is part of 22 the Korean State or an extended arm of the Government of 23 Korea.

24 MR GARIBALDI: Thank you.

25 MR PETROCHILOS: Professor, given that it may or may not be

[Page 177]

1 relevant, as you said, did you ask whether the NPS in 2 fact, whether rightly or wrongly, has claimed sovereign 3 immunity in foreign courts? We know your professional 4 view, that it couldn't. That's not my question. I want 5 you to be clear on my question.

6 My question is: did you ask whether the NPS has in 7 fact claimed sovereign immunity in any foreign courts?

8 A. Are you saying that the NPS has done so?

9 Q. No. We have asked -- we don't know -- and my question 10 to you was: have you asked?

11 A. No.

12 Q. He hasn't asked.

13 Mr President, we're coming to 10 to and I do not 14 wish to overstep my --

15 THE PRESIDENT: Whenever is a convenient time.

16 MR PETROCHILOS: -- boundaries.

17 THE PRESIDENT: We can go on for another 10 minutes if and 18 when you find a convenient time to break.

19 MR PETROCHILOS: This point lends itself to a break.

20 Mr Partasides has a housekeeping point to address. 21 Before he does so, I need to say something to the 22 witness which is this.

23 Professor, you told us you are not involved as an 24 expert tendered by the Republic of Korea in any other 25 international arbitration. The information we have, and

[Page 178]

1 it's information in the public domain, seems to suggest 2 otherwise.

3 I do not want to have to make submissions about this 4 without giving you an opportunity to refresh your memory 5 about this. So can I ask you to refresh your memory and 6 tell us: are you an expert proffered by the Republic of 7 Korea in another international arbitration and the case 8 I have in mind is called Mason Capital v Korea?

9 A. Yes, of course. Aren't the two the same cases? I think 10 you've asked about previous cases which I have not been 11 involved in as experts, but that case of course I am.

12 MR PETROCHILOS: We have it now. I'm happy to pause here, 13 but as I say, Mr Partasides wishes to address the 14 tribunal.

15 THE PRESIDENT: Yes, Mr Partasides?

16 Housekeeping

17 MR PARTASIDES: Thank you, Mr President, members of the 18 tribunal. I'm a little further away from you, but can 19 you hear me?

20 THE PRESIDENT: We can hear and see you both.

21 MR PARTASIDES: Very well. I just wanted to give the 22 tribunal an update on the procedural issue that has 23 arisen before this week.

24 I should tell you that as promised the Claimant has 25 collated the underlying trade confirmations that were

[Page 179]

1 identified in the spreadsheet that we provided to the 2 Respondent very early on Monday morning. I should also 3 tell you that those have been provided to the Respondent 4 earlier this afternoon just after 3 o'clock, and as 5 there was some question as to whether the Respondent 6 would put those documents on the record, we have 7 proposed that we put those documents on the record, and 8 that they be added to the record as exhibit C-750 to 9 C-758.

10 Unless there's any objection, I propose that that be 11 confirmed now.

12 I should also say, Mr President, that in addition, 13 having heard the tribunal's interest in this issue, we 14 have asked Mr Smith whether he could return to answer 15 any questions that either our friends opposite or the 16 tribunal may have for him about that additional 17 documentation. He has since left Geneva, given his 18 professional commitments, but he has offered to return 19 and would be available to give evidence on Monday of 20 next week if that would be of assistance to the tribunal 21 or to our friends opposite.

22 If it would also be of assistance, we would be 23 willing to submit a brief supplemental witness statement 24 from him simply and exclusively on the subject of these 25 additional documents, and you've heard me say this

[Page 180]

1 before. These are simply additional documents in 2 addition to those similar documents that were produced 3 to the Respondent in the spring of 2020, but for 4 a shorter period of time.

5 So we make that offer. We are keen to ensure that 6 we can do what we can to answer any questions the 7 tribunal may have about this additional documentation, 8 and so we wish to raise this at the earliest possible 9 opportunity.

10 THE PRESIDENT: Thank you very much. Respondent?

11 MR TURNER: Thank you very much, sir. I confirm that we 12 have received some documents from the other side. There 13 are, I believe, eight pdf documents, but they each 14 contain a large number of underlying documents. I'm 15 told there are 269 pages of documents. We will all see 16 that no doubt later today.

17 We as I explained on Tuesday, and it was very 18 early on Tuesday morning that we had the communication 19 from the Claimant -- we do not oppose these documents 20 being put into evidence. I'm assuming that my learned 21 friend's spreadsheet will also be put into evidence by 22 the Claimant. If not, then we will ask for that to be 23 put into evidence.

24 That is represented to be, and I'm sure is, 25 a summary of the transactions that these new documents

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1 document, as it were.

2 So that would complete the position.

3 So far as an offer of Mr Smith's presence is 4 concerned, we do not yet know -- we haven't looked at 5 these documents, or at least not in enough detail and 6 certainly Mr Lingard and I have not had a chance to 7 consider their content enough to know whether we have 8 questions for Mr Smith.

9 If Mr Smith is to tender a new witness statement, 10 limited as my learned friend has said to the new 11 documents, then that needs to -- and if he is available 12 to give evidence on Monday, we will need that witness 13 statement by midday tomorrow in practice to allow us to 14 take cognisance of it and the underlying documents, 15 decide what, if any, questions we have for Mr Smith.

16 If, though, and again subject to the overriding 17 control of the proceedings by the arbitral tribunal, if 18 my learned friend does not have questions in chief for 19 Mr Smith, in other words if he simply is tendered for 20 questioning by us, if we have questions and by the 21 arbitrators, if you have questions for him, then I do 22 not think a new witness statement is needed. But if my 23 learned friend were to have as part of the way of 24 introducing these documents the idea that he would ask 25 questions of Mr Smith in chief to explain the documents

[Page 182]

1 in the way that perhaps he has in mind, then we would 2 insist on such a witness statement and we would insist 3 on it being provided as early as possible, and we 4 suggest midday tomorrow.

5 I think that's a fair summary of our position. 6 Thank you, sir.

7 THE PRESIDENT: Would it not be helpful for the Respondent 8 to have a brief witness statement introducing the 9 documents to allow you to prepare for any 10 cross-examination of Mr Smith that you may want to 11 conduct?

12 MR TURNER: It's very hard for me to say because I don't 13 even know if we would have any questions. We have 14 reserved our right. We have not yet looked at the 15 documents. It is at least possible, sir, that the only 16 questions that there would be would be if there were 17 a discrepancy between the spreadsheet and the underlying 18 documentation.

19 I'm sure that won't be the case. I have every 20 confidence that the Claimant's record-keeping is 21 adequate and therefore what they tendered to us as 22 representing the transactions has been fully documented.

23 I simply don't know whether that would be necessary 24 or helpful. What we say is twofold. One, if there is 25 to be a statement, we need it in good time, and our

[Page 183]

1 suggestion is midday tomorrow.

2 If there is not -- if there is no statement, then 3 there can be no examination-in-chief of Mr Smith on 4 these matters.

5 THE PRESIDENT: We have only spoken very briefly about this 6 among the tribunal members. Our preliminary view was 7 that it would be helpful to have a short witness 8 statement introducing the documents along the lines that 9 was explained by counsel on Tuesday. That would be 10 helpful and that would then of course -- wouldn't 11 prejudge the Respondent's decision as to whether or not 12 you wish to put any questions to Mr Smith.

13 But at least if the witness statement is now made 14 and produced, that option would still remain open and 15 the tribunal senses that it would be helpful to explain 16 along the lines that you stated earlier this week, that 17 we would have that explanation on record and not simply 18 as a statement by counsel.

19 The question then becomes whether tomorrow noon 20 would be realistic. You would expect to have it by noon 21 tomorrow in order to be able to put any questions to 22 Mr Smith on Monday, but if Mr Smith is produced for 23 questioning later in the week, presumably you wouldn't 24 need the statement by noon tomorrow.

25 MR TURNER: Correct, sir.

[Page 184]

1 I think the timing of Mr Smith's evidence is 2 relevant to the experts' evidence.

3 THE PRESIDENT: So it should be before the experts -- it 4 should be produced before the experts are introduced for 5 examination.

6 MR TURNER: I think Mr Smith's evidence, both in writing and 7 potentially orally, would be important when we come to 8 talk to the experts and there are two ways of ensuring 9 that.

10 One is Mr Smith gives evidence again either only in 11 terms of questioning from the tribunal or questioning 12 from the tribunal and cross-examination from us before 13 the experts are currently -- which is Tuesday and 14 Wednesday, sir, of next week give evidence 15 themselves, the quantum experts, I should say, because 16 we have an expert in the room today, and it's only 17 experts from now until the end of the proceedings indeed 18 apart from Mr Smith, if he comes back. Or if he 19 can't -- if physically we can't get a sensible witness 20 statement a sensible amount of time before Mr Smith can 21 give evidence before Tuesday, then if he were to give 22 evidence on Tuesday or Wednesday, the experts would, 23 I think, have to be slotted in afterwards. I'm not sure 24 what the flexibility in their availabilities is. We 25 clearly, as a gathering here, have a bit of flexibility

[Page 185]

1 towards the end of next week.

2 THE PRESIDENT: I'll give a chance to Mr Partasides to 3 comment in a second. There are slots and there is some 4 flexibility in the timetable next week, for instance 5 Monday we are supposed to finish around 4 o'clock. So 6 there would be a slot after that to question Mr Smith. 7 Or then Tuesday morning, because again we are supposed 8 to start at 10 o'clock and finish already at 4.30. So 9 those two options would seem to exist. But 10 Mr Partasides --

11 MR PARTASIDES: Thank you, Mr President. Our idea for 12 proposing the witness statement would be indeed to 13 facilitate any questions that were to come either from 14 our friends opposite or from the tribunal. If we didn't 15 produce a witness statement, then we would need to 16 introduce that same evidence somehow orally, which 17 I think would be suboptimal for everyone, which is why 18 we propose a witness statement. I understand that that 19 is the growing consensus.

20 I cannot imagine that this would be a witness 21 statement that would be longer than three or four pages 22 in length; perhaps even shorter, who knows.

23 We do have one constraint, and that is Mr Smith is 24 no longer at Elliott, as you heard. He has his own 25 professional commitments. He will not return and be

[Page 186]

1 available to us until the weekend.

2 Now, we can work quickly as soon as he is available 3 to us. I understand he's returning to Geneva on 4 Saturday for us. And then I could undertake that early 5 on Sunday a witness statement would be ready for 6 submission. As it would be a witness statement simply 7 describing the documents that have already been provided 8 and would be of that length, I would hope that that 9 would give those who need it a reasonable period of time 10 should they choose to, to ask any questions late on 11 Monday.

12 I should say that he's confirmed that he can make 13 himself available for Monday. We have not asked him and 14 so I do not know whether he would be available later 15 next week, even if that were practicable, given the 16 other commitments.

17 THE PRESIDENT: Mr Turner?

18 MR TURNER: Sir, my immediate reaction is a hedged concern. 19 I use the word "hedged" advisedly as we may be hearing 20 it again over the course of the next days.

21 It is this. If my learned friend is talking about 22 a witness statement that says on 3 July entity X bought 23 Y number of swaps in company Z, and that is all, then it 24 may well be that as early as possible on Sunday will 25 I be back from church or not, you know, the great

[Page 187]

1 excitement of coming back on Sunday morning, may be 2 fine.

3 If the witness statement that is contemplated, and 4 it may very well be that this is not something that my 5 learned friend has yet thought about himself, and that 6 would be absolutely understandable, but if it is more -- 7 if it is explaining the nature of the transactions, if 8 it's explaining the nature of a trading plan, you can 9 see that that becomes more complicated, sir, if we are 10 then to decide whether to and prepare to talk to 11 Mr Smith on Monday after we have spoken to the Korean 12 capital market experts.

13 I fully understand that at the moment we don't know 14 whether Mr Smith would be available on the Tuesday 15 morning, and I agree with you, sir, that those are the 16 two obvious slots: the second half of Monday afternoon 17 or early on Tuesday.

18 But you see -- so it is a concern. We would much 19 rather have it earlier. It would be much less of 20 a concern if we knew it was simply putting the documents 21 into evidence -- I don't mean I hereby -- I am shown and 22 hereby confirm the contents of a bundle of documents 23 paginated 11 to 269, but to explain what the documents 24 represent and where they fit into the spreadsheet, that 25 would be mechanical.

[Page 188]

1 An explanation which Mr Smith began to give in 2 answer to questions from the tribunal the other day 3 about how this fitted into the overall plan, that might 4 be a little harder for us to get ready for if he were 5 then to be on, on the Monday afternoon.

6 I'm sorry I can't be any more precise than that, 7 but --

8 THE PRESIDENT: We understood. Can we do the following: the 9 witness statement is produced by -- on Sunday morning by 10 noon at the latest, and if you could then let the 11 tribunal and the Claimant know by -- there is no close 12 of business on Sunday, but let's say by Sunday evening 13 whether you are prepared to examine or put questions to 14 Mr Smith already on Monday evening after the completion 15 of the examination of experts that are scheduled to 16 appear on Monday, or whether you prefer to do it later 17 in the week, and then we discuss -- make a ruling either 18 on Sunday evening or first thing Monday morning as to 19 the next steps.

20 But I think the map is there now. We know where the 21 issues are, and the Claimant -- you may wish to consider 22 how much and what kind of introduction of the 23 documentation Mr Smith will do in his witness statement.

24 MR PARTASIDES: Thank you, Mr President. That is all noted 25 and we will work to that plan with our friends opposite.

[Page 189]

1 We're also conscious that it seemed to us that the 2 tribunal had some questions about this and so we would 3 want both the scope of the witness statement and any 4 appearance on Monday by Mr Smith to be the opportunity 5 to address those questions. But I don't know whether 6 the tribunal is already in a position to tell us whether 7 there's something that they would look to see in that 8 witness statement one way or the other.

9 THE PRESIDENT: There will probably be questions from the 10 tribunal as to the purpose of the transactions.

11 MR PARTASIDES: That's what we thought, and that then can be 12 included in the witness statement.

13 I should say that reference was made to trading 14 plans and maybe it was a broad reference to trading 15 plans. Our understanding is that we will not be going 16 over any of the ground that Mr Smith has already been 17 examined on. We will simply be limiting this to the new 18 documents that have been produced this week. I hope 19 that understanding is shared by all in this room.

20 THE PRESIDENT: That is the understanding -- I mean, 21 Mr Smith has been examined and he's been released, and 22 that was the understanding when his examination was 23 completed. It's only about the new documents that have 24 now been produced.

25 MR TURNER: That is very much our understanding, sir.

[Page 190]

1 Naturally, if Mr Smith were to explain that these 2 transactions -- and this is what we'd understood from my 3 learned friend on Tuesday morning -- were in some way 4 connected to the purchases of shares in SC&T, then to 5 that degree we might need to talk to him about how the 6 two fitted together. But I do not see it as being any 7 more connected than that.

8 THE PRESIDENT: Very good. So that is the plan. Just to 9 confirm for the record, there will be a witness 10 statement produced by Mr Smith by -- on Sunday morning 11 at the latest by noon Sunday. The Respondent will 12 confirm by Sunday evening and that can be defined by the 13 Respondent what that means as to whether or not you are 14 prepared to cross-examine Mr Smith on Monday evening or 15 whether you prefer to do it later in the week and then 16 we see where we are on Monday morning. The Respondent 17 says you don't need to examine Mr Smith, but in any 18 event, you will --

19 MR TURNER: We'd understood, sir, we will tell you what our 20 position is --

21 THE PRESIDENT: Whatever that is.

22 MR TURNER: -- on Sunday evening.

23 THE PRESIDENT: Okay. Very good.

24 MR PETROCHILOS: Mr President, I'm sure the expert knows 25 this, but perhaps it would be good to recall.

[Page 191]

1 THE PRESIDENT: Indeed.

2 Mr Kim, thank you very much. I should remind you 3 that you should not speak with anybody about your 4 testimony today or the questioning that is still to come 5 tomorrow morning. So it will be a solitary evening, 6 more quarantines, but we are getting used to it. Thank 7 you very much.

8 (6.10 pm)

9 (The hearing adjourned until Friday, 19 November 2021 at 10 9.30 am)

[Page 192]

1 INDEX

2 PAGE

3 MR [Redacted] (continued) ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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4 Cross-examination by MR PARTASIDES ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................-1

5 (continued) .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................-1

6 ...... 1

8 Re-examination by MR TERCEÑO ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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9 .24

10 Questions from THE TRIBUNAL ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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29

12 PROFESSOR CHOONG-KEE LEE (called) ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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.................................................................................................................................-..35

14 Presentation by PROFESSOR CHOONG-KEE LEE .....36

16 Cross-examination by MR TERCEÑO ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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18 Cross-examination by MR HAN ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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.........................................................................................................................................................................................................................................................................................................................................................................................-77

20 Further cross-examination by MR TERCEÑO ....110

22 Questions from THE TRIBUNAL .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................-133

24 PROFESSOR SUNG-SOO KIM (called) ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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141

[Page 193]

1 Presentation by PROFESSOR SUNG-SOO KIM .....142

3 Examination in-chief by MR BHAT ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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.................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................-163

5 Cross-examination by MR PETROCHILOS .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................- 165

7 Housekeeping ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................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.........................................................................................................................................................................................................................................................................................................................................-177

[Page 194]

194