"130 Billion Won Compensation to Elliott" International Investment Dispute Appeal Ruling Imminent

ISDS Cancellation Lawsuit Filed in UK Court
Oral Arguments Concluded Earlier This Month, Verdict Expected Next Month

The outcome of the cancellation lawsuit filed by the South Korean government in response to the International Investment Dispute Settlement (ISDS) ruling, which ordered it to pay more than 130 billion won to the U.S. hedge fund Elliott Management, is expected as early as next month.

According to legal sources on December 16, the High Court of England and Wales, which is the court of first instance, concluded oral arguments for the remand trial of the cancellation lawsuit filed by the Korean government against the Permanent Court of Arbitration (PCA) ruling earlier this month. Although the exact date of the verdict has not yet been set, it is expected to be delivered sometime next month, considering the current schedule and procedures.

Previously, in 2023, the Permanent Court of Arbitration (PCA) ruled that the Korean government must pay Elliott approximately 138.9 billion won (about 107.82 million dollars). The Korean government, citing the Korea-U.S. Free Trade Agreement (FTA), argued that the PCA ruled on a case over which it had no jurisdiction, and therefore filed a cancellation lawsuit with the English court, which is the seat of arbitration.

In August of last year, the court of first instance dismissed the lawsuit, stating that the Korea-U.S. FTA provisions cited by the government did not fall within the scope of jurisdiction under the UK Arbitration Act. However, in July of this year, the Court of Appeal accepted the Korean government's appeal and remanded the case to the High Court, the original trial court.

The High Court, having received the case again, must now determine whether there are grounds to annul the PCA arbitration award.

The Elliott case centers on allegations that, during the succession process of Samsung Electronics Chairman Lee Jae-yong, the merger ratio between Samsung C&T and Cheil Industries in 2015 was unfavorable to Samsung C&T. Despite this, the National Pension Service, a key government agency and major shareholder, voted in favor of the merger, causing losses to Samsung C&T shareholders. Elliott was a shareholder of Samsung C&T at the time.