SEOUL (Reuters) – South Korea said on Tuesday it would challenge an arbitration ruling that ordered it to pay U.S. hedge fund Elliott Investment Management $108.5 million in a case involving the merger of two Samsung Electronics affiliates.
The U.S. activist fund had sued over the role played by South Korea’s National Pension Service in approving an $8 billion merger between the two Samsung companies, arguing the terms had been unfairly unfavourable to the one in which Elliott had been a stake owner.
The Permanent Court of Arbitration in the Hague last month found in favour of Elliott, though the compensation ordered was much less than the $770 million the hedge fund had sought.
South Korea will argue that the Hague-based tribunal did not have jurisdiction to make the ruling under a free trade agreement it has with the United States, and will challenge the ruling at a UK arbitration body, the Justice Ministry said in a statement.
It did not name the UK arbitration body.
The ministry also said it will argue that the Hague-based tribunal made an error in calculating damages owed to Elliott, and that the compensation ordered was wrongly inflated by more than 6 billion won ($4.8 million).
Elliott did not immediately respond to a request for comment on Tuesday.
($1 = 1,260.1300 won)
(Reporting by Hyunsu Yim; Editing by Ed Davies and Edwina Gibbs)
