SK Innovation said Thursday that its board of directors had ordered the establishment of a “complete global compliance system” in response to the ongoing battery dispute with LG Energy Solution in the US.

At an audit committee meeting, held Wednesday and attended by all the company’s outside directors, board members lashed out at the management, saying the company’s “lack of experience in global disputes” had resulted in its defeat in the US’ top trade court.

In its final ruling on Feb. 10, the US International Trade Commission imposed a 10-year import ban on SK Innovation for stealing trade secrets from rival LG Energy Solution.

“It’s regrettable that SK Innovation lost the lawsuit due to its insufficient response to the US judicial process without having the opportunity to defend whether it actually infringed on trade secrets, which is the essence of the lawsuit,” Choi Woo-seok, a chief auditor on SK Innovation’s board, was quoted as saying in SK Innovation’s press release.

“The audit committee called for a two- and three-fold complete compliance monitoring system through recruiting global experts and reorganizing its global legal response systems,” an SK Innovation official said.

The board also told the management it would not agree to any out-of-court settlement with LG Energy Solution should it involve an excessive amount of money.

“The board of directors will thoroughly review (LG Energy Solution’s) demands, but if they make SKI’s battery business in the US meaningless or undermine SKI’s competitiveness significantly, they would be unacceptable,” the audit committee said.

LG Energy Solution is asking for 2.5 trillion won ($2.2 billion) to 3 trillion won in compensation, while SK Innovation is offering 800 billion won.

If SK Innovation and LG Energy Solution fail to settle, the two sides will head for the US District Court of Delaware, which could order punitive damages of up to 200 percent of actual damages.

SK Innovation currently needs about 4 trillion won every year to proceed with its electric vehicle battery expansion plan, which aims to scale up the firm’s annual battery production capacity from the current 40 gigawatt-hours to 125 gigawatt-hours by 2025.

By Kim Byung-wook (kbw@heraldcorp.com)