Can North Korea Enforce Foreign Arbitration Awards?

Can North Korea Enforce Foreign Arbitration Awards?

The enforcement of foreign arbitration awards in North Korea is highly problematic due to the unique legal and economic structures. A dearth of enforcement options for property rights, rooted in limited individual ownership, widespread distrust in local currency, and limited movable assets, leads to a focus on real estate use right for enforcement actions. The absence of private real estate ownership and a proper registration system, however, pose considerable challenges. Article 65 of North Korea’s External Economic Arbitration Law provides seven grounds for refusal to recognize and enforce foreign arbitration awards, one of which allows for broad interpretation, possibly leading to governmental interference or non-enforcement. Furthermore, this article highlights the difficulties in enforcing arbitration awards via real estate assets due to restrictions on ownership and the absence of a real estate registration system. This article also analyzes ambiguities in transferring real estate use rights to foreign creditors following arbitration awards.