LONDON, Feb 23 (Reuters) - South Korea on Monday partially won its challenge to an arbitration award in its long-running dispute with U.S. hedge fund Elliott over the 2015 merger of two Samsung
South Korea Partially Prevails in UK Arbitration Over Samsung Deal
LONDON, Feb 23 (Reuters) - South Korea on Monday partially won its challenge to an arbitration award in its long-running dispute with U.S. hedge fund Elliott over the 2015 merger of two Samsung affiliates.
The South Korean government was ordered to pay Elliott around $100 million by the Netherlands-based Permanent Court of Arbitration in 2023.
Background on the Samsung Merger Dispute
Elliott had sued over the role played by South Korea's National Pension Service in approving the $8 billion merger between Samsung C&T, in which Elliott was a minority stakeholder, and Cheil Industries.
South Korea sought to challenge the tribunal's decision at London's High Court, arguing that the tribunal did not have jurisdiction under a free trade agreement with the U.S., but its case was rejected.
The Court of Appeal, however, allowed South Korea's appeal last year and sent the case back to the High Court – just hours after Samsung's Chairman Jay Y. Lee was cleared by South Korea's top court of accounting fraud and stock manipulation related to the same deal.
High Court's Decision on Arbitration Award
Judge David Foxton on Monday overturned part of the arbitration award in relation to the actions of South Korea's National Pension Service in voting in favour of the merger of Samsung C&T and Cheil Industries.
The judge added that Elliott's claim in relation to the actions of the administration of then-South Korean President Park Geun-hye should be remitted to the arbitration tribunal to be decided upon again.
The South Korean government said in a statement that the ruling was a "valuable victory".
Responses from South Korea and Elliott
Elliott said in a statement that it had "succeeded in defending against the Republic of Korea's attempt to entirely set aside its more than $100 million arbitration award".
An Elliott spokesperson added that "the Republic's ongoing refusal to honor the award is only increasing the burden on Korean taxpayers, as interest continues to accrue at a rate of more than $10,000 per day".
(Reporting by Sam Tobin; Additional reporting by Heekyong Yang in Seoul; Editing by Louise Heavens and Jan Harvey)
