Dassault says it will boycott future South Korean defence competitions in protest at what it claims is Seoul's predisposition towards buying US equipment.
Calling the South Korean market a "private hunting ground" for US defence contractors, the French manufacturer says it will not compete for future fighter purchases in the country.
Last month it launched a legal action to block the signing of a contract for 40 Boeing F-15K fighters, claiming the selection process was unfairly biased in favour of the US contractor on political grounds. Dassault's Rafale was shortlisted alongside the F-15 and is believed to have defeated its rival in a technical evaluation. The French company also claims its bid was cheaper and contained more generous industrial offset proposals.
The Seoul district court threw out Dassault's application for an injunction after finding the government and defence ministry had no case to answer. Dassault claims its legal case would have been stronger if the ministry had been required to supply classified documents to the court. It is now considering an appeal.