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Gov't wins court challenge of ISDS ruling ordering Korea to pay $100M to U.S. hedge fund

Published: 23 Feb. 2026, 21:44

Minister of Justice Jung Sung-ho briefs the press at the Government Complex Seoul on Feb. 23 on the government’s win in a U.K. court set-aside case over an ISDS arbitral award involving Elliott. [YONHAP]

The Korean government has won a set-aside suit in a British court after challenging an investor-state dispute settlement (ISDS) ruling that ordered Korea to pay over 150 billion won ($103.9 million) to U.S. hedge fund Elliott.

The Ministry of Justice prevailed in proceedings seeking to annul an arbitral award in the Elliott case, the ministry said on Monday.

“At every stage of the original arbitration, including written submissions and oral hearings, the government consistently argued that the National Pension Service is not a state organ under international law, and that argument was ultimately accepted,” Justice Minister Jung Sung-ho said at a briefing Monday. “This is a valuable ruling that protected the National Pension Service.”

The dispute stems from Elliott’s claim that the National Pension Service, a major shareholder of Samsung C&T, backed the 2015 merger between Samsung C&T and Cheil Industries despite terms unfavorable to Samsung C&T shareholders, allegedly as part of a management succession process involving Lee Jae-yong, the then-vice chairman of Samsung Electronics. Elliott was a shareholder of Samsung C&T at the time.

In June 2023, an arbitration tribunal administered by the Permanent Court of Arbitration ruled that Korea must pay Elliott about 155.6 billion won.

Korea filed the set-aside action in Britain, the seat of arbitration, arguing that the tribunal lacked jurisdiction under the Korea-U.S. FTA.

The logo of Samsung Electronics is seen at the company's store in Seoul, Korea, on April 15, 2025. [REUTERS/YONHAP]

A first-instance court dismissed the government’s challenge in August 2024, but the Court of Appeal accepted Korea’s appeal in July 2025 and sent the case back to the High Court.

With the High Court’s latest ruling, the original award ordering compensation can no longer stand, and the case will be returned to arbitration proceedings.

“The government spent only about one-sixth of what Elliott did on litigation costs, yet managed to thread the needle of an annulment challenge, where the success rate is just 3 percent,” Jung said. “That was possible thanks to public officials across relevant ministries who worked with one purpose for eight years since 2018, the government’s legal team, and the people who placed their trust in them.”

“The government will continue to do its utmost in the remanded arbitration proceedings and will also push legislation to further strengthen Korea’s ISDS response system, thoroughly protecting the public and the national interest."

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JUNG SI-NAE [[email protected]]