"Prevented 160 Billion Won in State Funds From Flowing Out"... Government Wins Lawsuit Challenging Elliott Arbitration Award (Updated)

UK Court Rules in Favor of Korean Government...Case Remanded to Arbitration Proceedings

The government has won a lawsuit it filed challenging an investor-state dispute settlement (ISDS) ruling that ordered it to pay about 160 billion won to the U.S.-based hedge fund Elliott Management.

On the 23rd, the Ministry of Justice announced that it had prevailed in a lawsuit before a UK court seeking to set aside the arbitration award in the ISDS case against Elliott.

Previously, in 2023, the Permanent Court of Arbitration (PCA) had ruled that the Korean government must pay Elliott approximately 156.6 billion won (about 107.82 million dollars).

In response, the government filed an action to set aside the award with the courts of the seat of arbitration in the United Kingdom, arguing that, based on the provisions of the Korea-United States Free Trade Agreement (FTA), the PCA had rendered a decision in a case over which it lacked jurisdiction.

On August 1, 2024, the court of first instance dismissed the lawsuit, holding that the Korea-U.S. FTA provision invoked by the Korean government did not fall within the scope of adjudicatory powers under the UK Arbitration Act.

However, in August last year, the England and Wales Court of Appeal, acting as the appellate court, accepted the Korean government’s appeal and remanded the case to the High Court, which was the court of first instance. The High Court then reconsidered the matter and ruled in favor of the Korean government. As a result, the existing arbitration award can no longer be maintained, and the case has been remitted back to the arbitration proceedings.

Back in 2015, Elliott filed the ISDS claim, arguing that, in the course of Samsung Electronics Chairman Lee Jaeyong’s succession of management control, the 2015 merger ratio between Samsung C&T and Cheil Industries was disadvantageous to Samsung C&T, yet the National Pension Service voted in favor of it, causing losses to shareholders including Elliott.

Jeong Seongho, Minister of Justice, is briefing at the Government Complex Seoul on the 23rd about the victory in a UK court lawsuit to set aside the arbitration award in the ISDS case against Elliott. Yonhap News

This content was produced with the assistance of AI translation services.