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South Korea challenges arbitration ruling that found for Elliott in Samsung merger case

Published 07/18/2023, 03:30 AM
Updated 07/18/2023, 10:30 AM
© Reuters. FILE PHOTO: An employee walks past a logo of Samsung C&T Corp at the company's headquarters in Seoul, South Korea, July 16, 2015.  REUTERS/Kim Hong-Ji/File Photo
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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 2015 merger of two Samsung Electronics (OTC:SSNLF) 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 Samsung (KS:005930) C&T - in which Elliott was a minority stakeholder - and Cheil Industries.

Elliott had argued the terms had been unduly unfavourable to Samsung C&T.

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 British arbitration body, the justice ministry said in a statement.

It did not name the arbitration body.

Elliott Investment said in a statement that it would "vigorously oppose the arguments advanced" by the Republic of Korea, adding that the company was disappointed by the decision to commence legal proceedings in London.

© Reuters. FILE PHOTO: An employee walks past a logo of Samsung C&T Corp at the company's headquarters in Seoul, South Korea, July 16, 2015.  REUTERS/Kim Hong-Ji/File Photo

South Korea's justice 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).

($1 = 1,260.1300 won)

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