S. Korea loses suit against int’l court ruling on compensation to Mason Capital over Samsung merger
Yonhap | 21 March 2025
S. Korea loses suit against int’l court ruling on compensation to Mason Capital over Samsung merger
by Kim Seung-yeon
SEOUL, March 21 (Yonhap) — South Korea has lost a lawsuit seeking to annul an investor-state dispute settlement (ISDS) ruling that ordered it to pay compensation to U.S. hedge fund Mason Capital over losses from Samsung’s controversial 2015 merger of two units.
The Ministry of Justice in Seoul said Friday that the Singapore International Commercial Court turned down the South Korean government’s request the previous day to annul the arbitration ruling that Mason filed against it in 2018.
Mason filed the ISDS case in September 2018, claiming that the South Korean government exerted undue pressure on the National Pension Service, a major shareholder of Samsung C&T, to vote in favor of its merger with Cheil Industries.
Mason claimed that as a result, the stock prices of Samsung C&T and Samsung Electronics plunged, causing the firm to incur losses of approximately US$200 million.
In April 2023, the arbitration tribunal partially upheld Mason’s claims and ordered the South Korean government to pay $32 million in compensation, along with delayed compound interest at an annual rate of 5 percent from July 17, 2015.
In response, the South Korean government filed a lawsuit in Singapore in July of the same year to annul the arbitration ruling.
The justice ministry has argued that the ruling misinterpreted the conditions for jurisdiction recognition under the South Korea-U.S. free trade agreement and therefore constitutes reasonable grounds for canceling the decision.
The merger, seen as aimed at tightening then Samsung heir Lee Jae-yong’s control over the family-controlled group, had been the center of a massive influence-peddling scandal that led to the ouster of former President Park Geun-hye and Lee’s imprisonment.
