U.K. court overturns Elliott ruling for Korea

The South Korean government has won an appeal in a British court against a ruling that ordered it to pay approximately 130 billion won to U.S. hedge fund Elliott Management in an investor-state dispute settlement (ISDS) case. As a result, the case will be returned to the lower court for a new ruling on whether South Korea should be held liable for damages.

According to the South Korean Ministry of Justice on Thursday, the U.K. Court of Appeal overturned a previous dismissal by the High Court and remanded the case for reconsideration.

Elliott filed for arbitration in July 2018, claiming it suffered significant losses due to the South Korean government’s improper intervention in the 2015 merger between Samsung C&T and Cheil Industries. The hedge fund alleged that the Blue House and the Ministry of Health and Welfare pressured the National Pension Service to support the merger. A tribunal under the Permanent Court of Arbitration ruled in Elliott’s favor, ordering South Korea to pay about $94 million in damages.

South Korea challenged the ruling in the British court, as the U.K. served as the seat of arbitration. Although the High Court initially dismissed the challenge, the Court of Appeal accepted South Korea’s arguments, stating that the grounds for cancellation fall under “substantive jurisdiction” as defined in the U.K. Arbitration Act.

“We will respond thoroughly to the rehearing in the lower court and prepare for any potential further appeal by Elliott, always prioritizing the national interest,” the Ministry of Justice said.


여근호기자 yeoroot@donga.com