Korea not to appeal ruling in favor of Mason Capital in Samsung case

South Korea said on Friday it has decided not to appeal a Singaporean court’s rejection of its lawsuit to annul an investor-state dispute settlement (ISDS) ruling that ordered it to pay compensation to US-based Mason Capital Management LLC over losses related to a 2015 merger of two Samsung Group affiliates.

Following the decision, the South Korean government is set to pay Mason about 86 billion won ($60.5 million).

“After in-depth discussions with our law firms and legal experts, the government has decided not to appeal the Singaporean court's ruling on March 20, 2025, which dismissed the government’s claim for a reversal of the Mason ISDS arbitral award,” the justice ministry said in a statement.

The ISDS case dates back to 2018 when Mason sought compensation of over $200 million from the South Korean government, arguing that it suffered investment losses because the government intervened in the 2015 merger of two Samsung units – Samsung C&T Corp. and Cheil Industries Inc.

The US hedge fund, which was a shareholder of Samsung C&T, opposed the merger but failed to block it.

COSTS, DEFERRED INTEREST

In April 2024, the Permanent Court of Arbitration (PCA) in the Netherlands accepted Mason’s claims, ordering the South Korean government to pay $32 million and deferred interest of 5% per annum from July 17, 2015.

The government filed a lawsuit to a Singaporean court to annul the ruling in July last year. The court rejected the case, however.

South Korea may have decided not to appeal, considering additional costs, as few international arbitral awards have been annulled.

“The government made the decision based on various factors, including the legal theory and additional costs for an appeal and deferred interest,” said a justice ministry official.

ELLIOTT

The saga of legal disputes surrounding the controversial merger between Samsung C&T and Cheil Industries lingers.

In 2018, US hedge fund Elliott Investment Management Corp., which held a stake in Samsung C&T, also took issue with the National Pension Service’s approval of the Samsung merger and brought the case to the International Center for Settlement of Investment Disputes (ICSID).

In June 2023, the international arbitration tribunal ruled in favor of Elliott, ordering the South Korean government to pay Elliott $53.6 million in compensation, which represented about 7% of the US hedge fund’s original request of $770 million.

Regarding the Elliott case, the justice ministry challenged the ICSID’s ruling.

In July 2023, the government filed revocation litigation with a court in England, where the arbitration is taking place, citing a violation of jurisdiction. The case is ongoing.

Write to Si-On Park at ushire908@hankyung.com
 
Jongwoo Cheon edited this article.