South Korea challenges arbitration ruling that found for Elliott in Samsung merger case
10:26 am Tuesday, July 18th, 2023
SEOUL (Reuters) -South Korea said on Tuesday it would challenge an arbitration ruling that ordered it to pay U.S. hedge fund Elliott Investment Management $108.5 million in a case involving the 2015 merger of two Samsung Electronics affiliates.
The U.S. activist fund had sued over the role played by South Korea’s National Pension Service in approving an $8 billion merger between Samsung C&T – in which Elliott was a minority stakeholder – and Cheil Industries.
Elliott had argued the terms had been unduly unfavourable to Samsung C&T.
The Permanent Court of Arbitration in the Hague last month found in favour of Elliott, though the compensation ordered was much less than the $770 million the hedge fund had sought.
South Korea will argue that the Hague-based tribunal did not have jurisdiction to make the ruling under a free trade agreement it has with the United States, and will challenge the ruling at a British arbitration body, the justice ministry said in a statement.
It did not name the arbitration body.
Elliott Investment said in a statement that it would “vigorously oppose the arguments advanced” by the Republic of Korea, adding that the company was disappointed by the decision to commence legal proceedings in London.
South Korea’s justice ministry also said it will argue that the Hague-based tribunal made an error in calculating damages owed to Elliott, and that the compensation ordered was wrongly inflated by more than 6 billion won ($4.8 million).
($1 = 1,260.1300 won)
(Reporting by Hyunsu Yim; Additional reporting by Chandni Shah in Bengaluru; Editing by Ed Davies, Edwina Gibbs and Emelia Sithole-Matarise)
