South Korea challenges arbitration ruling that found for Elliott in Samsung merger case

Reuters

Published Jul 18, 2023 03:30AM ET

Updated Jul 18, 2023 10:30AM ET

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 (OTC:SSNLF) 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 (KS:005930) 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.