Republic of Korea v. Elliott Associates LP (2026) EWHC 368 (Comm), 23 February 2026

Overview

In Republic of Korea v. Elliott Associates LP, the English High Court (per Lord Justice Foxton) upheld in part a jurisdictional challenge arising under the U.S.–Korea Free Trade Agreement (“the FTA”). The challenge had been brought by the Republic of Korea (“the claimant” or “the claimant state”), under Section 67 of the English Arbitration Act 1996 (“the EAA”), to set aside a final arbitral award dated June 20, 2023 (“the award”) rendered in an arbitration between the Claimant and Elliott Associates LP (“the defendant”)—a U.S. investment fund. The challenge against the award was determined by an English court because the arbitration was seated in London and administered by the PCA (PCA Case No. 2018-51).

On February 23, 2026, the Commercial Court of England and Wales (“the court”) set aside the award to the extent that it had found that the National Pension Service of Korea (as an organ of the claimant state) had violated Article 11.5 of the FTA (para. 266(i)) by adopting (or maintaining) measures that related to the defendant and its investment. The court remitted—to the arbitral tribunal—the question of the consequences for causation of the breaches constituted by the remaining measures (para. 266(ii)).

Background

From November 2014, the defendant and an associated fund, Elliott International LP (“EILP”), built an interest, first through total return swaps and then through direct shareholdings, in Samsung C&T (“SC&T”), a Korean company, reaching a combined 6.96% by May 25, 2015 and 7.12% of SC&T’s shares at the time of the merger (para. 26). The defendant (and EILP) also entered into short positions in shares of Cheil Industries Inc (“Cheil”), shares of which the defendant and EILP considered to be overvalued (para. 27). Both SC&T and Cheil were part of the wider Samsung Group (para. 31). Around the same time, the National Pension Fund of Korea (“the NPF”)—which was managed by the National Pension Service of Korea (“the NPS”)—also held 11.94% of SC&T’s shares, and separately, 4.61% of the shares in Cheil (para. 28). The internal governance structure of the NPS required it to vote against a merger “if it is expected that the shareholder value may be damaged” (para. 29).

Following the May 2014 heart attack suffered by Geon-Hui Lee (the Chairman of the Samsung Group), press speculation arose that JY Lee (i.e., the son of Geon-Hui Lee) would take over control of his father’s company (para. 31). To facilitate the succession of control of the Samsung Group to JY Lee while his father was still alive, a merger between SC&T and Cheil was contemplated by the Lee family; the court accepted that succession was “a relevant factor” on the family’s part, while declining to find that it was the only factor favouring the merger (para. 31). On September 15, 2014, JY Lee had a meeting with President Park (i.e., the President of the claimant state at the time) to discuss a possible SC&T-Cheil merger, and the court found that a merger was likely to have been discussed and President Park’s support obtained (para. 33). The defendant was publicly opposed to the merger (para. 35).

On May 26, 2015, the terms of a merger were announced between SC&T and Cheil (para. 36) and, on May 27, 2015, the defendant wrote to the SC&T board, criticizing the proposed merger and alleging an “unlawful conspiracy” (para. 38) with Cheil and the Lee family. Also, on June 3, 2015, the defendant wrote to the NPS communicating its concerns regarding the proposed merger (para. 39). The court found that, on June 29, 2015, President Park personally gave an order to Senior Presidential Secretaries “to take good care of the NPS voting rights” (para. 42), which the court found was intended and understood as an order to ensure the completion of the SC&T-Cheil merger (paras. 42–44 and 46–49).

Eventually, on July 17, 2015, the NPS voted in favour of the merger, without which the requisite two-thirds majority would not have been reached (para. 73), and questions thereby arose regarding (a) whether the conduct of the NPS was attributable to the claimant under the FTA (para. 6(i)); (b) whether the conduct of both the Korean Presidential Office and President Park (jointly referred to as “the Blue House”) and the Korean Ministry of Health and Welfare (“the MHW”) were attributable to the claimant under the FTA (para. 6(ii)); (c) the extent to which the actions of the NPS, the MHW and President Park had been taken with the defendant in contemplation (para. 6(iii)); and (d) whether allegations of corruption—arising from a meeting between President Park and JY Lee—had been established (para. 6(iv)). The court did not consider it necessary to make any finding on the issue regarding the alleged corruption of President Park and JY Lee (para. 74).

After the merger, the defendant suffered losses on its investments in SC&T and Cheil (para. 75) and on 13 April 2018, the defendant filed a notice of intent to submit its claims to arbitration under Article 11.16(2) of the FTA (para. 10). During the arbitration, the claimant (as respondent during the arbitration) raised three challenges (which were also considered as sub-issues by the court) against the jurisdiction of the arbitral tribunal. Those three jurisdictional challenges are (para. 4): (a) whether the actions of which complaint is made constitute “measures”; (b) if so, whether those were “measures adopted or maintained” by the claimant; and (c) if so, whether those measures “relate to” the defendant and its investment.

On sub-issue/jurisdictional challenge (a) above, the claimant had contended that it had not taken any relevant “measure” within Article 1.4 of the FTA, which provides that “Measure includes any law, regulation, procedure, requirement, or practice,” in relation to the defendant’s investment (para. 10(i)). In response, the defendant argued that the conduct of the Korean governmental organs, authorities and officials constituted a “measure” under the FTA (para. 10(i)).

On sub-issue/jurisdictional challenge (b) above, the claimant had contended that it had neither adopted nor maintained any measure, since the NPS was not a state entity (para. 10(ii)). In response, the defendant argued that the conduct of President Park; the Blue House, the MHW (including the Minister of the MHW), and the NPS were all attributable to the claimant (para. 10(ii)(a–c)).

On sub-issue/jurisdictional challenge (c) above, the claimant had contended that no measures related to the defendant because there was no “legally significant connection” between the alleged measures, the defendant’s investment and the defendant as an investor (para. 10(iii)). In response, the defendant argued that such connection did not require conduct targeted at an investor, but that it only required a sufficient factual nexus between the measures taken by the host state and the affected investor’s rights (para. 10(iii)). The defendant thereby argued that the claimant’s measures affected some investors (including the defendant) and that there was sufficient proof (paras. 42–69) that the claimant had acted with the specific intention of discriminating against the defendant (para. 10(iii)).

The arbitral tribunal rejected the claimant’s jurisdictional challenge (para. 12) and found that it had jurisdiction because (a) the actions of the Blue House and the MHW constituted “measures” (para. 13(ii)); (b) the conduct of the NPS was attributable to the claimant (para. 14(ii–vi)); and (c) the claimant’s measures related to the defendant or its investment (para. 15(i–iv)). Thomas KC issued a separate opinion on jurisdictional challenge (c): he agreed that the requirement was satisfied but held that a closer connection was required than a reasonably foreseeable adverse effect, and his analysis treated the actions of the Blue House and the MHW as the relevant measures, rather than the NPS vote itself (para. 16).

On the merits of the case, the arbitral tribunal concluded inter alia that the claimant had breached the Minimum Standard of Treatment Obligation under Article 11.5 of the FTA (para. 18(i)). In the award, the arbitral tribunal awarded damages of USD 48,490,428 to the defendant, reflecting a correction in relation to the treatment of tax made by a Decision on Requests for Correction and Interpretation of the award dated September 1, 2023 (para. 21). The claimant thereby applied to the court to set aside the award.

In a previous judgment delivered on August 1, 2024, the court had dismissed the claimant’s challenge without addressing its merits, on the basis that it did not raise a jurisdictional question ((2024) EWHC 2037 (Comm)) (para. 2). But the English Court of Appeal overturned that judgment ((2025) EWCA Civ 905) (para. 2) and remitted the challenge back to the court.

Hence, the core issue before the court was whether the jurisdictional requirement under the FTA had been satisfied in relation to the award (para. 3). In the view of the court, that core issue also required the determination of the aforementioned sub-issues (para. 4) (i.e., the three jurisdictional challenges raised by the claimant during the arbitration).

Whether the conduct of the NPS was attributable to the claimant

Both the claimant and the defendant agreed that Articles 2, 4, 5 and 8 of the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts (“the ILC Articles”) were relevant to the determination of this issue (paras. 89, 91, 92, 94, and 96).

The claimant contended that the conduct of the NPS could not be attributable to the claimant since the NPS had a separate legal personality (para. 106). In response, the defendant contended that (a) the NPS could be considered as a “central authority” under Article 11.1(3)(a) of the FTA (para. 98(i)); (b) the disputed conduct was carried out by the NPS while exercising a power delegated by a central authority under Article 11.1(3)(b) of the FTA (para. 98(ii)); and (c) the NPS’ conduct was attributable to the claimant on the basis of customary international law by virtue of Article 8 of the ILC Articles (para. 98(iii)).

In determining whether the NPS is a state organ, the court emphasized that where an entity has separate legal personality (under the internal law of a state), it is only in exceptional circumstances that such an entity will constitute a de jure state organ (para. 126(i)). The court also noted that it is also only in exceptional circumstances that an entity (which is not a de jure state organ), and which undertakes commercial activities, will constitute a de facto state organ (para. 126(ii) and (v)) and the entity must have “an extreme lack of independence” (para. 126(vi)) for it to be considered an organ of the state. The court thereby held that since the NPS had a separate legal personality under Korean law (para. 140(v)), the NPS was neither a de jure state organ (para. 150) nor a de facto state organ (paras. 153, 154, and 159) especially since the NPS was not dependent on the claimant state (paras. 157 and 158) and since its activities were commercial in nature (para. 155).

In essence, the court held that the conduct of the NPS was not attributable to the claimant since the lex specialis between the parties (i.e., the FTA between the claimant and the defendant) did not permit the attribution of conduct (as provided under Article 8 of the ILC Articles) of a non-state organ acting under the instructions (or direction) of a state (paras. 206 and 207). The court, however, noted that it was satisfied that President Park, the Blue House, the Minister of the MHW (and the MHW itself) had instructed NPS personnel to vote in favour of the SC&T-Cheil merger (para. 208), and that its conclusion would have been different if not for the lex specialis between the parties (para. 210).

Whether the contested measures constitute measures adopted or maintained by the claimant

The claimant contended that “the concept of ‘measure’ involves some kind of legislative, regulatory or administrative rule-making and practice” (para. 213) or some level of formal sovereign act (para. 213). Hence, according to the claimant, the contested measure had to be governmental (or relate to formal sovereign acts) in order to qualify as measures adopted or maintained by the claimant (para. 214). In response, the defendant contended that certain aspects of the regulatory regime—to which the NPS was subject—established that the contested measure by the NPS (i.e., the deciding vote on the SC&T-Cheil merger) was governmental (para. 173).

The court emphasized that, under Article 11.1(3)(b) of the FTA, “measures adopted or maintained by a Party” means inter alia “measures adopted or maintained by non-governmental bodies in the exercise of powers delegated by central, regional, or local governments or authorities” (para. 162). The court thereby clarified that, under Article 11.1(3)(b) of the FTA, the contested measure must be one adopted or maintained by the NPS in the exercise of a sovereign, regulatory, or governmental power delegated to it by the claimant (para. 167). But the court disagreed with the claimant and held that the “measure” (under Article 11.1(3)(b) of the FTA) was not limited to only governmental or sovereign acts for it to qualify as measures adopted or maintained by the claimant (paras. 215, 217, and 219).

However, the court clarified that while measures adopted or maintained by President Park, the Blue House, the Minister of the MHW (and the MHW itself) constituted measures adopted or maintained by the claimant (para. 211), those adopted or maintained by the NPS—on the other hand—did not constitute measures adopted or maintained by the claimant (para. 211). Further, while the court agreed that the NPS was capable of exercising some delegated state powers which could be considered as governmental (para. 174), the court disagreed with the defendant that the NPS’ exercise of voting powers on the SC&T-Cheil merger was an exercise of governmental powers (paras. 175, 177, and 178).

The court was satisfied that the interference by President Park, the Blue House, the Minister of the MHW (and the MHW itself) constituted a “measure” that was “governmental rather than commercial” (para. 223). However, while the court noted that the decision of the NPS to vote in favour of the SC&T-Cheil merger also constituted a “measure” (para. 224), the court held that it was not an exercise of sovereign authority (para. 225).

Whether the contested measure relates to the defendant and its investment

The claimant contended that, in determining this issue, the court had to consider whether the decision of one minority shareholder (i.e., the NPS) as to how to exercise its voting rights related to the position of other shareholders (such as the defendant) (para. 235). In the view of the claimant, a full analysis of this issue would require the court to go into the merits of the case at the jurisdictional stage (para. 235)—an approach that the claimant resisted. In response (as noted earlier), the defendant argued inter alia that the claimant’s measures affected some investors (including the defendant) and that there was sufficient proof (paras. 42–69) that the claimant had acted with the specific intention of discriminating against the defendant (para. 10(iii)).

The court emphasized that it was not sufficient for the contested measure to simply affect the defendant’s investment (paras. 226 and 228). Hence, the court clarified that there must be a “legally significant” connection between the measure and the harm suffered by the defendant (and its investment) (para. 234), and that there is no such connection where the mere ricochet effect of a measure affects investors “not because the measure applies to them, but because of their economic relationship with those to whom the measure does apply” (para. 234).

However, the court disagreed (with the claimant) that it would need to go into the merits to determine this issue (para. 237) and held that the contested measure related to the defendant’s investment (paras. 238 and 239).

The claimant’s Section 67 jurisdictional challenge

The claims of the defendant (as claimant during the arbitration) had related to both the measures adopted or maintained by the NPS (para. 242(ii)) (“the NPS Measures”) and those adopted or maintained by the Blue House, the MHW, and the Minister of the MHW (para. 242(i)) (“the Blue House Measures”).

Hence, while the court found that the arbitral tribunal had rightly exercised jurisdiction over the Blue House Measures (paras. 243 and 244), the court also found that the tribunal had wrongly exercised jurisdiction over the NPS Measures (paras. 243, 245, and 247). The court thereby noted that (under Section 67 of the EAA) it could set aside part of an award where the award satisfies “the severance test” (para. 254), as in this case, and the court set aside the award to the extent that it had found that the NPS (as an organ of the claimant state) had violated Article 11.5 of the FTA by adopting or maintaining measures which related to the defendant and its investment (para. 266(i)). Regarding the causation of the breaches of the FTA, which had been constituted by the Blue House Measures, the court remitted the award to the arbitral tribunal for reconsideration (para. 266(ii)).

Conclusion

In conclusion, the significance of this case lies in the priority which the court gave to the treaty’s own attribution provision over the customary rules of international law. Where an investment chapter defines exhaustively which measures count as those of a party, that definition operates as the lex specialis between the parties. The result is that conduct that would be attributable to a state under Article 8 of the ILC Articles because an entity acted on the state’s instructions or under its direction or control may nonetheless fall outside the treaty where the entity is neither a state organ nor exercising delegated governmental powers.

Note

The decision of the court was delivered by Lord Justice Foxton. The arbitral tribunal (before whom the arbitration—leading to the claimant’s Section 67 challenge—had been conducted) was comprised of Mr. Garibaldi, Dr. Heiskanen and Mr. Thomas KC.

Author

Adeyemi Gomes is a Nigeria-qualified lawyer, currently pursuing a master’s degree in international dispute settlement (the MIDS) at the CIDS Geneva Centre for International Dispute Settlement in Switzerland.