Government Accepts Adverse Elliott ISDS Ruling, to Pay 153 Billion Won... Won't Seek to Set Aside Remand Award

Dispute to End 8 Years and 3 Months After It Was Filed in 2018
Ministry of Justice: "Decision Made After Comprehensive Review, Including Costs"

The government has decided to accept the adverse ruling in the remand arbitration in the international investment dispute (ISDS) with U.S.-based private equity fund Elliott. As a result, its liability to pay Elliott approximately 153 billion won, including the principal compensation and delayed interest, has been finalized.

The Ministry of Justice said on October 28, "We have decided not to file any further set-aside proceedings or other actions with the UK courts regarding the remand arbitration ruling in the Elliott ISDS case, issued on September 30." The decision followed a comprehensive review of opinions from relevant ministries, the law firm representing the government, and outside experts; an analysis of the ruling; and the costs of pursuing further litigation.

Elliott filed an ISDS claim in 2018 under the Korea-U.S. Free Trade Agreement (FTA), alleging that it had suffered losses when the government improperly intervened in the National Pension Service's voting during the 2015 merger of Samsung C&T and Cheil Industries.

In June 2023, the arbitral tribunal found the government liable and ordered it to pay approximately $48.49 million, plus delayed interest. The government filed a set-aside action with a UK court, arguing that the National Pension Service's exercise of its voting rights was not an action attributable to the government under the Korea-U.S. FTA.

In February this year, the UK court accepted the government's argument that the National Pension Service could not be considered a state organ. It partially set aside the original arbitration award and remanded the case to the arbitral tribunal to reconsider, among other things, the causal link between government intervention and Elliott's losses.

However, on September 30, the arbitral tribunal on remand again found a causal link between the government's actions and Elliott's losses. It ruled that the government must pay Elliott approximately $48.49 million in principal compensation, plus delayed interest, totaling approximately 153 billion won.

With the government deciding not to file any further set-aside action, the dispute with Elliott, which began in July 2018, will come to an end after approximately eight years and three months. A Ministry of Justice official said, "Specific plans and amounts related to the compensation payment are currently under discussion," adding, "We will continue to respond thoroughly, with the national interest as our top priority."

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