The Permanent Court of Arbitration (PCA) in The Hague has fully rejected a $566 million claim by the Iranian Dayyani family against the South Korean government.

The dispute centered on a delay in paying compensation related to a failed deal to acquire Daewoo Electronics. The arbitration tribunal also ordered the Iranian claimants to pay South Korea 4 billion won in legal costs and around 800 million won in administrative expenses, according to Yonhap.

In 2010, the Iranian industrial group Entekhab, owned by the Dayyani family, won a tender to acquire Daewoo Electronics. However, South Korean state-owned corporation KAMCO terminated the deal in 2011.

An international arbitration tribunal ruled in 2018 that South Korea should pay the Iranian side 73 billion won plus interest. The ruling became final in December 2019.

South Korea transferred the compensation in April 2022. In October 2021, however, the Dayyani family had filed a separate $566 million claim, seeking damages they said resulted from the delayed payment.

South Korea argued that the transfer had been delayed because it needed to obtain special authorization from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) due to sanctions on Iran’s financial sector.

The arbitration tribunal concluded that South Korea had not discriminated against the Iranian investors. It also found that obtaining OFAC authorization was necessary and legally justified given the sanctions restrictions in force at the time.

The ruling brings another chapter to the long-running legal dispute surrounding the failed Daewoo Electronics acquisition and subsequent compensation payments.