SK hynix: MFN Audit and Arbitration
How John S. Kim defended SK hynix through a major customer audit in Korea and an arbitration in San Francisco over a most-favored-customer provision, ending in the complete withdrawal of the claims.
The matter
A major customer alleged that SK hynix had breached a most-favored-customer provision in its semiconductor supply agreement. The allegation produced a substantial contract audit, conducted at SK hynix headquarters and related offices in Korea, and an arbitration seated in San Francisco, California. John S. Kim led the company's response to both.
How it turned
The defense did not rest on the pricing merits alone. Mr. Kim established that the customer had itself disclosed confidential pricing information without authorization, which undermined the basis of the allegations and secured a materially stronger negotiating position.
The outcome, stated precisely
All claims were withdrawn in full. That was a withdrawal by the claimant — not an arbitral award, and not a court judgment. The distinction is kept because it describes what actually happened.
Why it was demanding
Most-favored-customer pricing clauses expose a supplier across its entire customer book: what is conceded to one buyer can reprice the rest. A claim of that kind is therefore never contained to the counterparty who brings it, and the response has to account for every other customer relationship at the same time.
Relevance today
The Law Office of John S. Kim advises on dispute strategy and litigation management and on the commercial contracts that generate disputes — including the pricing and most-favored-customer terms that look harmless until they are tested.