South Korea Loses Appeal Over $100 Million Payout to Elliott in Samsung Merger Dispute

South Korea faced a setback on Thursday when its appeal against a ruling requiring it to compensate U.S. hedge fund Elliott Management over $100 million was dismissed. The dispute stemmed from the contentious 2015 merger of two Samsung affiliates.

Last year, the Permanent Court of Arbitration (PCA) in the Netherlands ordered the South Korean government to pay Elliott Management approximately $108.5 million, encompassing damages, interest and legal fees. South Korea contested this decision at London’s High Court, arguing that the PCA lacked jurisdiction under the free trade agreement with the U.S. However, this appeal was rejected on Thursday, according to Reuters.

In response to the ruling, Elliott Management expressed satisfaction, stating that the decision was “the proper outcome based on well-established principles of English law.”

Related: Korea’s Antitrust Regulator Orders Samsung to Rectify Business Interference Practices

The hedge fund had taken legal action due to the involvement of South Korea’s National Pension Service in sanctioning an $8 billion merger between Samsung C&T and Cheil Industries, in which Elliott was a minority shareholder. This merger has also led to a separate lawsuit from New York hedge fund Mason Capital Management, which secured a judgment of about $32 million plus interest in April.

In addition to these civil cases, the merger has sparked criminal proceedings in South Korea. In February, Samsung Electronics Chairman Jay Y. Lee was acquitted of charges of accounting fraud and stock manipulation by a Seoul court. Prosecutors are currently appealing this verdict.

Source: Reuters