"Samsung C&T Merger Did Harm Elliott"... ISDS Tribunal Rules Against Korean Government Again

Government Intervention Acknowledged, Regardless of NPS Status

"If There Had Been No Intervention, the Merger Would Have Been Opposed"

Compensation Amount Increased from $48.5 Million to $113 Million

The international investment dispute settlement (ISDS) tribunal has once again acknowledged that the Korean government caused losses to the U.S.-based hedge fund Elliott Management during the 2015 merger between Samsung C&T and Cheil Industries. The tribunal determined that the Korean government interfered with the National Pension Service's exercise of voting rights, resulting in losses for Elliott. The prolonged dispute over government intervention in what has been described as the most significant transaction in Samsung Group's history is expected to continue.

On October 1, Elliott released a statement announcing the tribunal's decision. Elliott stated, "Through an additional ruling, the tribunal has reaffirmed that the Korean government unduly intervened in the National Pension Service's voting rights during the 2015 merger between Samsung C&T and Cheil Industries, violating the Korea-U.S. Free Trade Agreement (FTA) and causing losses to Elliott. Despite the Korean government repeatedly refusing to accept the original ruling and making several attempts to overturn it, all efforts have ultimately failed. We hope the Korean government will now accept the tribunal's decision."

Previously, in its original ruling in June 2023, the tribunal found that the Office of the President and the Ministry of Health and Welfare instructed the National Pension Service to approve the merger between Samsung C&T and Cheil Industries. This was deemed a violation of the FTA agreement and considered to have caused substantial damage to Elliott, a minority shareholder of Samsung C&T.

This additional ruling comes after the High Court in London partially annulled the original decision in February 2026 and remanded the case back to the tribunal. The UK court did not accept the logic that the National Pension Service is a state organ and that its approval of the merger constituted government action. However, the court did acknowledge intervention by the Office of the President and the Ministry of Health and Welfare and ordered the tribunal to determine whether this intervention actually caused damages.

Regarding this, Elliott stated, "Irrespective of the legal status of the National Pension Service, the UK court ordered the tribunal to clearly determine whether the Korean government caused losses to Elliott. The tribunal has concluded that, in the absence of illegal intervention by the Republic of Korea, the National Pension Service would have opposed the merger between Samsung C&T and Cheil Industries."

As a result of this decision, the eight-year dispute over the most significant transaction in Samsung Group’s history is expected to continue. While this merger enabled Samsung Electronics Executive Chairman Jay Y. Lee to resolve succession issues and solidify his control over the group, renewed controversy has arisen.

The decision could also deal a blow to the Korean government. The compensation amount includes damages, accumulated interest, and legal and litigation costs. Elliott initially claimed compensation of 770 million U.S. dollars, but in 2023, the tribunal ordered the payment of 48.5 million U.S. dollars and interest accrued since July 2015. This amount has now been recalculated to 113 million U.S. dollars (approximately 153.5 billion won).

In a statement, Elliott said, "This case has also harmed domestic shareholders and participants of the National Pension Service. Resolving this issue will draw a close to the 'era of favoritism toward chaebol,' clearly showing why the Korean capital market suffers from the so-called ‘Korea Discount.’"

Meanwhile, the Korean government is reviewing the ruling and considering whether to pay the compensation or to initiate procedures for annulment once again.

This content was produced with the assistance of AI translation services.