Korea lodges suit to reverse PCA's compensation order in dispute with Elliott

Samsung Electronics Chairman Lee Jae-yong arrives at the Seoul Central District Court to attend a hearing over his alleged involvement in accounting fraud and stock manipulation during a merger of two Samsung affiliates, July 7. Yonhap

The government has filed a suit to reverse an international tribunal's order to pay nearly $100 million in damages to hedge fund Elliott Investment Management in a dispute stemming from the controversial 2015 merger of two Samsung Group affiliates, officials said Tuesday.

Last month, the Permanent Court of Arbitration (PCA) in the Netherlands delivered the verdict in the investor-state dispute settlement (ISDS) suit that the New York-based activist fund filed in 2018, demanding compensation of $770 million from the Korean government.

Including delayed interest and legal fees, Seoul was ordered to pay $107.8 million to Elliott.

The legal battle dates back to 2015, when the state-run National Pension Service (NPS) approved the merger of Samsung CT and Cheil Industries, a move widely seen as intended to tighten Samsung heir Lee Jae-yong's control over the family-controlled group, as his father Lee Kun-hee had suffered a heart attack the previous year.

Elliott, which held a 7.12 percent stake in Samsung CT at the time and objected to the merger, has since filed the ISDS case, claiming the then Park Geun-hye administration pressured the NPS into throwing support behind the merger.

The Ministry of Justice on Tuesday said the government has filed a suit with a court in Britain, the location of the arbitration, to cancel the PCA verdict and has lodged a separate request with the PCA to correct the ruling. (Yonhap)