International Litigation | “The KRW 160 Billion Award Was Overturned”: A UK Court Rules in Favor of the Korean Government in the Elliott International Litigation

The Permanent Court of Arbitration (PCA), which heard the case, partially accepted Elliott's claims.

The arbitral tribunal found that the government had influenced the National Pension Service's exercise of its voting rights, and that this had thereby breached the obligation to protect investors. It rendered an award holding that the Korean government had to pay approximately KRW 160 billion (including principal and interest).

Accordingly, the Korean government came to bear liability for a substantial sum in damages.

The Korean government contested the arbitral award and filed an action to set it aside in the UK courts, the seat of arbitration (in July 2023).

At first instance, the action was initially dismissed, but on appeal the case was remanded, and the UK court subsequently ruled in favor of the Korean government.

As a result, the award of approximately KRW 160 billion in damages was set aside, and the case was to be reheard.

The UK court accepted the Korean government's argument.

The court found that, after a comprehensive review of the legal structure and operating arrangements of the National Pension Service, among other factors, it could not be equated with the Government of the Republic of Korea or regarded as a state organ on that basis alone.

The court therefore held that it was legally problematic for the Permanent Court of Arbitration to have treated the National Pension Service's exercise of its voting rights as a measure of the State and to have recognized liability for damages.

As a result, the arbitral award was set aside and the obligation to pay approximately KRW 160 billion in damages was provisionally resolved, and it is likely that the case will be remanded to the arbitral proceedings or that the appellate proceedings will resume through the filing of an appeal by Elliott.

In an international investment dispute, highly advanced issues of international law and procedure are interwoven, including the attribution of State responsibility, the legal status of public institutions, the interpretation of investment treaties, and the possibility of setting aside an arbitral award.

Accordingly, a financial burden on the scale of hundreds of billions of won may turn on the early response strategy.

Daeryun Law Firm LLP provides the following integrated response in international litigation and international arbitration matters.

In particular, in international disputes involving public entities such as public institutions, pension funds, and local governments, a structural analysis of whether the conduct is attributable to the State is central.

Daeryun includes a number of foreign attorneys qualified as foreign legal consultants in U.S. law who have experience in ISDS, international arbitration, and international litigation matters, and through collaboration with law firms in various countries, it reviews administrative and international law together to design defensive arguments aimed at resolving the dispute.

Daeryun can provide systematic assistance throughout the entire course of an international dispute, drawing on its experience. If you have any related inquiries, you are welcome to request a consultation.