In a judgment handed down on 23 February 2026 ([2026] EWHC 368 (Comm)), Lord Justice Foxton partially set aside a US$48.5m investment treaty arbitration award under the Korea-US Free Trade Agreement (“KORUS”) in favour of the US hedge fund, Elliott Associates LP. As a consequence, various issues have been remitted to the Tribunal for fresh consideration. The judgment in favour of the Republic of Korea (“Korea”) follows a judgment of the Court of Appeal in 2025 which overturned the judge’s ruling that the points Korea wished to run were not jurisdictional for the purposes of s67 of the Arbitration Act 1996 and sent the matter back to the Commercial Court for determination on their merits.
The Award arose out of the controversial circumstances of the 2015 merger between Samsung C&T and Cheil industries, which led to a number of subsequent criminal proceedings in the Korean courts. In outline, Elliott, which held a minority 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 vote on the approval of the merger, in breach of Korea’s obligations under KORUS. The Tribunal made the US$48.5m award in favour of Elliott (said to have been worth US$100m by the time of these proceedings).
Considering the jurisdictional objections advanced by Korea, the Court accepted that the NPS’ conduct was not “by a Party”, i.e. Korea, as that term was properly understood under KORUS, and that broader arguments based on the law of state responsibility and attribution were ousted by the treaty wording as lex specialis. As a result, the Tribunal did not have jurisdiction over such matters.
However, because the Court also found that there was conduct at the level of the (then) Presidential Administration and at the level of the Ministry of Health and Welfare over which the Tribunal did have jurisdiction, it faced a question as to the appropriate relief.
Accepting Korea’s submission that the Tribunal’s reasoning on causation, loss and relief was intertwined with its findings on matters over which it had no jurisdiction, such that it could not be severed from the same, the Court therefore remitted portions of the Award concerning that reasoning to the Tribunal for fresh consideration.
The judgment can be found here.
Samuel Wordsworth KC, Peter Webster and Richard Hoyle appeared on behalf of the Republic of Korea, instructed by Jane Wessel and Charlotte Mallorie of Arnold & Porter in London, and Kevin Kim and Ara Cho of Peter & Kim in Seoul.
