Korea Hydro & Nuclear Power (KHNP) claims about $1.1B from its parent, Korea Electric Power Corporation (KEPCO), over additional costs at the Barakah nuclear plant in Abu Dhabi. KEPCO disputes the claim, which KHNP refiled at the Korean Commercial Arbitration Board on May 21, 2026, after the parties agreed to leave the LCIA in London. The LCIA terminated the London case on June 22, 2026, and the Korean proceeding is pending.
Latest development Jun 22, 2026
On June 22, 2026, the LCIA terminated the London arbitration brought by Korea Hydro & Nuclear Power (KHNP) against Korea Electric Power Corporation (KEPCO). The parties withdrew it by mutual agreement, according to KEPCO’s SEC filing, and no settlement was reached. The dispute continues at the Korean Commercial Arbitration Board, where KHNP claims about 1.661 trillion won (about $1.1B).
Why it matters
The tribunal will decide whether Korea Electric Power Corporation (KEPCO) must pay its subsidiary’s Barakah cost claim before settling its own additional costs with the Emirates Nuclear Energy Corporation. The claim equals 3.37% of KEPCO’s equity, according to its SEC filing.
Background
In 2009, a Korean team led by Korea Electric Power Corporation (KEPCO) won the contract to build four reactors at the Barakah nuclear plant in Abu Dhabi, United Arab Emirates (UAE). The project was worth about 20 trillion won (about $15B). Korea Hydro & Nuclear Power Co., Ltd. (KHNP), a wholly owned KEPCO subsidiary, supplied operational support services under a separate contract. The Emirates Nuclear Energy Corporation (ENEC) commissioned the project, which was completed in 2024.
Construction ran late and costs rose. KHNP says delays and extra work orders caused by the UAE side and KEPCO entitle it to payment under its own contract. In January 2025, KHNP filed a formal claim against KEPCO for roughly $1B. KEPCO has said internal settlements should follow its own settlement of additional costs with the UAE side. When talks between the two companies stalled, KHNP filed an LCIA arbitration on May 7, 2025, claiming about $1.1B.
In February 2026, the trade ministry recommended moving the case to Korea, citing cost, time, and the risk of nuclear technology leaking abroad. It also proposed forming a body to negotiate a settlement. In March 2026, a ruling party lawmaker introduced a bill requiring Korean public institutions to prioritize domestic arbitration. Both boards agreed to the transfer in March 2026. Yonhap reported that month that KEPCO was negotiating its own additional-cost settlement with ENEC.
KHNP filed at the Korean Commercial Arbitration Board on May 21, 2026, claiming about 1.661 trillion won (about $1.1B). On June 22, 2026, the LCIA terminated the London case after the parties withdrew it by mutual agreement, without a settlement. Korean press reported that the tribunal formed in London, including two foreign party-appointed arbitrators, was expected to carry over, with the chair seat vacant. KEPCO disputes the claim and says it will defend the case through its arbitration counsel.
Timeline 12 events
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OrderLCIA arbitration ends after withdrawal by mutual agreement
The LCIA terminated Arbitration No. 256584 after the parties withdrew it to continue the dispute at the Korean Commercial Arbitration Board. No settlement was reached.
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OrderLCIA tribunal composition expected to carry over to KCAB case
Reports indicated the two party-appointed foreign arbitrators from the LCIA proceeding were expected to remain in place for the KCAB case, while the presiding arbitrator position stayed vacant.
KEPCO and KHNP Dispute Enters Domestic Arbitration Proceedings
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OtherKCAB case reported as likely the largest in board’s history
Coverage of the KHNP-KEPCO transfer to the Korean Commercial Arbitration Board said the roughly $1.1B claim was expected to become the largest case in the institution’s history.
KEPCO and KHNP Dispute Enters Domestic Arbitration Proceedings
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OrderLCIA tribunal expected to carry over into KCAB case
Korean press reported that the tribunal formed in the withdrawn LCIA case, including two foreign co-arbitrators, was expected to remain for the KCAB proceeding. The presiding-arbitrator seat was reported vacant.
KEPCO and KHNP Dispute Enters Domestic Arbitration Proceedings
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FilingKHNP files KCAB request seeking 1.661 trillion won
KHNP submitted its arbitration request to the KCAB International Arbitration Center as Case No. 26112-0010, maintaining the claim it had raised at the LCIA.
KEPCO and KHNP Dispute Enters Domestic Arbitration Proceedings
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FilingKHNP files KCAB arbitration claiming 1.661 trillion won
KHNP started KCAB/IA No. 26112-0010 against KEPCO, claiming about 1.661 trillion won (about $1.1B). KEPCO disputes the amount.
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OrderKEPCO and KHNP boards agree to move the arbitration to Korea
Both boards approved transferring the case from the LCIA to the Korean Commercial Arbitration Board, Yonhap reported. KEPCO was negotiating its own additional-cost settlement with ENEC.
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OtherLawmaker proposes bill mandating domestic arbitration for public bodies
A ruling party lawmaker introduced legislation requiring Korean public institutions to prioritize domestic arbitration, prompted partly by the KEPCO-KHNP LCIA case.
Ruling Party Proposes Mandating Domestic Arbitration for Public Entities
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OtherTrade ministry urges KEPCO and KHNP to arbitrate in Korea
The ministry recommended moving the case from the LCIA to the Korean Commercial Arbitration Board and forming a body to negotiate a settlement.
The Korea Times: Gov't advises KEPCO, KHNP to resolve legal dispute over UAE plant project at home
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FilingKHNP files LCIA arbitration against KEPCO over Barakah costs
KHNP claimed about $1.1B under its operational support services contract for the UAE project. KEPCO said it would dispute the claim.
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FilingKHNP formally claims $1B in added costs
KHNP filed a formal claim against KEPCO seeking roughly $1B in additional compensation, citing project delays and extra work orders.
KEPCO, KHNP to seek international arbitration over additional costs from UAE nuclear project
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OtherBarakah Unit 4 enters commercial operation
The fourth and final Barakah reactor began commercial operations, completing the project. Its completion set up final cost settlement talks between KEPCO and KHNP.
KHNP files arbitration claim against KEPCO with international court over Barakah project costs
Experimental AI forecast
How it is madeWill KHNP and KEPCO settle, or will the KCAB tribunal issue a final award on KHNP’s Barakah cost claim, by June 30, 2028?
- KHNP and KEPCO settle the claim48%
- Still pending on June 30, 202836%
- Award grants KHNP part of its claim8%
- Tribunal awards KHNP most of its claim5%
- Tribunal largely rejects KHNP’s claim3%
- Resolves by
- Jun 30, 2028in 20 months
- Record confidence
- Low
A negotiated settlement between KHNP and KEPCO by June 30, 2028, is the most likely result, at 48%. Both are state-controlled and share a parent-subsidiary link. The trade ministry has already proposed a settlement body. Timing likely depends on KEPCO first settling its own Barakah costs with ENEC.
How it resolves. Resolves on public records such as KEPCO SEC or DART filings, KCAB statements, or reliable Korean press. “Settlement” covers a reported settlement, or a withdrawal of the KCAB case under an agreed resolution, before any final award. The award outcomes depend on the final award’s result. KHNP recovers 75% or more of about 1.661 trillion won, or 25% to 75% (mixed), or under 25%. “Still pending” applies if none of these has occurred by June 30, 2028.
Reasoning
Starting point. Intra-group commercial arbitrations between state-owned parent and subsidiary companies under active government pressure to settle: Roughly 30-40% of commercial arbitrations settle before award. Disputes between commonly owned state entities settle at much higher rates, often above 60%, once the shared owner intervenes.
Commercial arbitrations settle before award about 30-40% of the time, and intra-group disputes between state entities settle far more often once the shared owner steps in. The trade ministry has pushed the case home, proposed a settlement negotiating body, and both boards agreed to the transfer, which signals coordinated government oversight. KEPCO’s stated position that internal settlement should follow its ENEC settlement makes the ENEC talks, reported in March 2026, the main gate for any deal. That dependency explains a large still-pending share, because government-level negotiations with the UAE side can run long. An award by mid-2028 is less likely, given a claim of about $1.1 billion, a vacant chair seat, and a KCAB case filed only on May 21, 2026. Reported carryover of the LCIA co-arbitrators could shorten the schedule if earlier pleadings are reused. If an award does issue, a partial recovery is the most plausible result in construction-delay cost disputes. The leading alternative is that the case stays pending past June 2028 while the ENEC talks continue.
Common state ownership and ministry push for negotiated settlement · KEPCO links internal payout to its own ENEC settlement · Vacant presiding arbitrator seat slows the KCAB timetable · Claim equals 3.37% of KEPCO equity, a material sum · Possible reuse of LCIA tribunal and pleadings
Generated automatically by Claude Opus 5.5 on Oct 18, 2026 from this case’s record on this site, and published without editorial review. The probabilities are the model’s judgment, not measured frequencies, and they are scored publicly as cases resolve. Not legal or investment advice. How the forecasts are made