April 12, 2021 12:12
SK and LG have reached a multi-billion settlement to end a legal dispute in the U.S. that has dragged on for the last two years and threatened the future of a half-built SK battery factory there.
SK Innovation will pay LG Energy Solution W1 trillion in cash and another W1 trillion in royalties (US$1=W1,121). The agreement came just a day before U.S. President Joe Biden was to decide on vetoing a ruling by the International Trade Commission that bans SK from importing rechargeable automotive batteries into the U.S. for 10 years.
The settlement effectively voids the ITC's ruling and allows SK to continue building the battery factory in the U.S. state of Georgia.
The two companies in a joint statement on Sunday said they "will halt all litigation both inside and outside Korea and refrain from taking legal action for the next 10 years."
SK Innovation president Kim Jun and LG Energy Solution president Kim Jong-hyun said, "We decided to engage in healthy competition and amicable cooperation for the advancement of the Korean and U.S. battery industries. We particularly decided to make joint efforts in the Biden administration's drive to bolster battery supply networks and eco-friendly policies."
U.S. government mediation played a key role in the last-minute agreement. Washington wants to secure a stable supply of rechargeable batteries and create jobs by having both SK and LG plants in America.
President Joe Biden in a statement on Sunday said the agreement is "a win for American workers and the American auto industry."
The dispute started in April 2019 when LG reported SK to the ICT for stealing its battery patents. It was the first major lawsuit filed overseas between two Korean conglomerates and caused jitters in the global auto industry.
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