Arnold & Porter Secures Set-Aside of Arbitral Award for the Republic of Korea in Elliott Associates Dispute

Arnold & Porter secured a victory in English courts for the Republic of Korea in an investor-state dispute settlement (ISDS) matter arising from claims brought by U.S. hedge fund Elliott Associates, L.P., pursuant to the Free Trade Agreement between the Republic of Korea and the U.S., concerning the 2015 merger between Samsung C&T and Cheil Industries.

Elliott, which held a stake in Samsung C&T, alleged that Korea unlawfully intervened in the merger through the National Pension Service (NPS), a shareholder in both companies. Elliott contended that the NPS acted as an organ of the state and improperly influenced the merger process, in breach of Korea’s obligations under the investment treaty. The Permanent Court of Arbitration tribunal had previously issued a USD $48.5 million award in favor of Elliott.

In August 2025, the UK Court of Appeal ruled that Korea had raised legitimate challenges to the tribunal’s jurisdiction, remitting the case to the Commercial Court. Following a three-day hearing in December 2025, Lord Justice Foxton rendered a judgment on February 23, 2026, holding that the NPS was not a de facto organ of the state for purposes of the treaty in this context.

Lord Justice Foxton set aside the award to the extent the tribunal found a treaty breach on the basis of its treatment of the NPS as a government body. The matter will be remitted to the tribunal to reconsider whether any actions of government organs breached the treaty, whether any such breach caused loss, and what damages, if any, should be awarded.

This ruling follows another recent victory for the Republic of Korea in the long-running Lone Star v. Korea arbitration before the International Centre for Settlement of Investment Disputes (ICSID), in which Arnold & Porter represented Korea throughout the 10-year proceedings.

The Arnold & Porter team, serving as instructing solicitors, was led by partners Jane Wessel and Charlotte Mallorie, along with partners Jun Hee Kim and Anton Ware, senior counsel Paolo Di Rosa, and attorneys from Peter & Kim. Samuel Wordsworth KC, Peter Webster, and Richard Hoyle of Essex Court Chambers argued the case.