The New York-based hedge fund, Mason Capital Management, has notified the South Korean government that it has filed an investor-state dispute (ISD) lawsuit, seeking $200 million in compensation for losses stemming from the controversial 2015 merger between two Samsung companies, the Ministry of Justice said on Sept. 18.
It is the second time that a foreign investor has raised the ISD lawsuit related to the merger of Samsung after the U.S.-based hedge fund Elliott Management.
According to the ministry, Mason asserted that it suffered more than $200 million due to the Korean government's unreasonable measures in approving the merger of Samsung C&T and Cheil Industries Inc. in 2015. The state pension fund backed the deal, which was partly aimed at tightening heir Lee Jae-yong's control of the group.
The lawsuit will be dealt with at the United Nations Commission on International Trade Law, the international tribunal that handles ISD lawsuits.
Elliott Associates also filed a similar suit against South Korea demanding $770 million in compensation.
Meanwhile, Elliott and Mason held 7 percent and 2.2 percent, respectively, in Samsung C&T and opposed the merger, asserting the deal undervalued the company and investors' interest.
Mason said it has appointed Elizabeth Gloster, 69, a former judge who is currently working with One Essex Court, as its arbitrator. Meanwhile, the Justice Ministry plans to choose its own in accordance with the Korea-U.S. FTA and UN Commission on International Trade Law regulation.