Seoul: South Korea's government has paid 74.6 billion won (approximately US$54 million) to U.S. hedge fund Mason Capital. This payment follows an investor-state dispute settlement (ISDS) ruling that required compensation over losses related to Samsung's 2015 merger of two units, as confirmed by the Ministry of Justice.
According to Yonhap News Agency, the dispute began in September 2018 when Mason Capital filed an ISDS suit. The hedge fund claimed it incurred losses of around US$200 million due to the Korean government's undue influence on the National Pension Service. The pension service, as a major shareholder of Samsung C and T, was persuaded to vote in favor of the merger with Cheil Industries.
In April of the previous year, the Permanent Court of Arbitration (PCA) in the Netherlands ruled in favor of Mason Capital. The ruling ordered South Korea to compensate the New York-based fund with $32 million, along with a delay charge.
Following the PCA's decision, the Korean government sought to overturn the ruling by filing a lawsuit with the Singapore International Commercial Court in July of the same year. However, the Singaporean court dismissed this lawsuit earlier in the year, leading the Seoul government to decide against appealing the decision.
The Ministry of Justice noted that the final payment to Mason Capital was made after deducting withholding tax, amounting to approximately 15.8 billion won.