The South Korean government has lost another lawsuit against the U.S.-based private equity firm (PEF) Mason Capital.
According to industry sources on the 21st, the Singapore International Commercial Court dismissed the South Korean government’s lawsuit to annul an arbitral tribunal’s ruling, which ordered them to pay $32 million in damages.
The South Korean government had filed an annulment suit last year in response to an investor-state dispute settlement (ISDS) ruling in which they had partially lost to Mason Capital.
Previously, in September 2018, Mason Capital filed an ISDS claim against the South Korean government, alleging that South Korea had violated the Korea-U.S. Free Trade Agreement (FTA), seeking $190 million in compensation.
The basis for the claim was that during the 2015 merger of Samsung C&T and Cheil Industries, Mason Capital suffered losses due to pressure from former President Park Geun-hye and the Ministry of Health and Welfare, which led the National Pension Service to support the merger. At that time, Mason Capital held a 2.18% stake in Samsung C&T.
In April last year, the Permanent Court of Arbitration (PCA) tribunal ruled that the South Korean government should compensate Mason Capital $32 million and pay interest for delays.
The ISDS case involving Mason Capital is the second lawsuit involving U.S. hedge funds related to the Samsung C&T merger, which was part of the larger corruption scandal involving former President Park Geun-hye.
In June 2023, the tribunal also ruled in favor of U.S. hedge fund Elliott, ordering the South Korean government to pay approximately $53.59 million. Including interest, the total amount South Korea is required to pay Elliott is around $130 million. The government has also filed an annulment suit in this case.
