Michael Hay, a foreign legal counsel qualified in New York, talks about his 12-year judicial experience in North Korea in an interview with The Korea Times at his office at HMP Law in central Seoul, Monday. / Korea Times photo by Shim Hyun-chul



By Kim Hyun-bin



North Korea has an advanced arbitration system even compared to developed countries, and foreign companies face an even playing field in dispute resolution, according to Michael Hay, the founder of North Korea's only foreign law firm Hay, Kalb & Associates.



"From start to finish, (an arbitration case) could be done in six months… which is much faster than most other countries I have worked in," Hay said in an interview with The Korea Times at his office in Seoul, Monday.



He has been a foreign legal counsel at HMP Law since December, after 12 years of operating his law firm in the North.



Hay emphasized that the North Korean regime has no choice but to maintain an advanced dispute resolution system in order to continue reeling in foreign investment and companies.



"One thing North Koreans are very conscious of: If they don't have a dispute resolution system, people will not come and invest in the country. In my experience they are very supportive (of foreign firms)," he said.



"My clients were always given an equal share of time and fairness in arbitrary proceedings. If they did not have a credible legal system, I would not have stayed 12 years in Pyongyang."



Hay, a foreign legal counsel qualified in New York, found his interest in the Korean Peninsula early on in his career and has over 25 years of legal practice and business consulting experience in both South and North Korea. In 2004, he established the first and only foreign law firm in North Korea and operated it through 2016.



It took two years for Hay to negotiate with North Korea to establish his law firm in Pyongyang. He initially planned to work with one of the world's top 20 law firms, but it backed out for fear of sanctions, so he decided to open his own firm.



The 57-year-old lawyer specialized in arbitration handled some 50 cases in Pyongyang, working alongside 12 North Korean colleagues.



One of the key factors for foreign companies to succeed in the regime is to work low-key without grandstanding, Hay said, adding that even very large companies from the U.S. neither advertised nor wanted to make public their businesses in the reclusive nation.



"They were subject to non-disclosure agreements away from the limelight. That's how they wished to operate and that is how they succeed," he said.



"I have a file of failures of entities that tried to go to North Korea. One of the big problems they faced, they grandstand it: 'We are going to North Korea' to the mass media here and abroad and the result, rejection."



Hay says most of his clients sued for breach of contract from failure of being paid, delayed payment or sometimes not allowing manufacturing to specifications.



One of the main difficulties he faced when dealing with his North Korean counterparts was late responses, where his crew was left "waiting and waiting on the opposite side."



The lawyer also believes the U.S. and the U.N.'s economic sanctions on the North have had a heavy impact on legitimate foreign businesses rather than the regime, as the regime has become accustomed to the restrictions over 70 years.



"The legitimate businesses are holding off and consultants to these legitimate businesses have seen their business dry up very much because of the sanctions," he said.



His main reason for departing the North was "purely a business decision" as many foreign firms have pulled out due to the sanctions, leaving an insufficient number of cases that needed his assistance.



Hay, as well as many foreign companies, entities and NGOs, are monitoring the situation on the Korean Peninsula in hopes there are improvements in the sanctions situation, and are counting down the days until they can resume doing business in the North.



"I'm totally focused on the improvement of relations on the Korean Peninsula. That is why I am here. I intend to be there when sanctions on the regime improve. You have to be patient when dealing with North Korea; it's a long-term investment of time, money and effort," he said.

