Tribunal orders payment of about $48.49 million plus accrued interest

Ministry of Justice vows to analyze ruling and take necessary follow-up steps

The Ministry of Justice building in Gwacheon, Gyeonggi Province. [Ministry of Justice]
The Ministry of Justice building in Gwacheon, Gyeonggi Province. [Ministry of Justice]

South Korea has lost the remand arbitration case brought by US hedge fund Elliott Associates under the Korea-US Free Trade Agreement, which alleged that the government unlawfully interfered in the 2015 merger of Samsung C&T and Cheil Industries and caused Elliott financial harm.

The Ministry of Justice said Thursday that the remand tribunal issued a ruling against the South Korean government at around 7 p.m. Wednesday in the investor-state dispute settlement case Elliott filed in June 2018 under the Korea-US FTA.

According to the ministry, the remand tribunal found a causal link between the South Korean government's intervention to secure approval for the Samsung C&T-Cheil Industries merger in 2015 and the losses suffered by Elliott. The tribunal ordered the government to pay Elliott approximately $48.49 million — the same amount as the original arbitration award — along with accrued interest.

"The government will work closely with related ministries, its legal representatives and outside experts to thoroughly analyze the ruling and do its utmost to take any necessary follow-up measures," the ministry said.

Elliott filed the ISDS claim in 2018, alleging that Cheong Wa Dae and the Ministry of Health and Welfare had pressured the National Pension Service to vote in favor of the merger between Samsung C&T and Cheil Industries during the Park Geun-hye administration in 2015, causing the fund substantial losses.

In June 2023, the arbitration tribunal partially accepted Elliott's claim that the South Korean government's improper pressure — rooted in the broader state corruption scandal — had caused it financial damage.

The South Korean government filed a lawsuit to annul the award in a British court. A court of first instance dismissed the case, but an appeals court ruled that the grounds for annulment were valid and sent the matter back to the arbitration tribunal.


bell@heraldcorp.com