UK Court Reverses $100M Ruling Against South Korea in Elliott Management Dispute
A British court has overturned a $100 million arbitration award against South Korea in a long-running dispute with U.S. hedge fund Elliott Management. The case centres on a controversial 2015 Samsung merger that Elliott claimed unfairly harmed minority investors. The High Court's decision sends the dispute back to an international tribunal for further review.
The conflict began when Elliott opposed Samsung's merger of C&T and Cheil Industries, arguing it undervalued shares and disadvantaged smaller investors. In 2018, Elliott filed an investor-state claim under the Korea-U.S. Free Trade Agreement (KORUS FTA), leading to a 2023 tribunal ruling that ordered Korea to pay $107.8 million in damages.
South Korea challenged the award in British courts, insisting that the National Pension Service's (NPS) vote supporting the merger did not constitute government action. The High Court agreed, ruling that the NPS was not a state organ under the treaty. It also found that the tribunal had not properly assessed whether government interference directly caused Elliott's losses.
The case now returns to the International Centre for Settlement of Investment Disputes (ICSID). The tribunal will re-examine claims of Korean government involvement in the merger, potential breaches of the KORUS FTA, and Elliott's demand for $880 million in compensation. A final decision is expected by the end of 2026.
The legal battle has unfolded against the backdrop of Korea's 2016 corruption scandal, which implicated former President Park Geun-hye and Samsung executives. British courts rarely overturn arbitration awardsâonly about 3 percent of challenges succeedâmaking this reversal a notable exception.
The tribunal must now determine whether government actions directly led to Elliott's financial losses and if damages should be paid. With legal costs significantly lower for Korea than for Elliott, the case highlights the financial strain of prolonged investor-state disputes. A ruling is anticipated before the close of 2026.
