SICC upholds award under Korea-US Free Trade Agreement

In September 2018, Mason - a US hedge fund - initiated arbitration proceedings under the Korea-U.S. Free Trade Agreement claiming that it sustained losses of approximately USD200 million after the Korean government exerted undue pressure on the National Pension Service, a major shareholder of Samsung C&T, to vote in favour of its merger with Cheil Industries.

In April 2024, the Permanent Court of Arbitration (PCA) in the Netherlands ruled in favour of the New York-based fund, ordering Korea to pay compensation of USD32 million and a delay charge. In response, the Korean government initiated proceedings with the Singapore International Commercial Court in July 2024, 2025 to annul the PCA arbitration award.

In Republic of Korea v. (1) Mason Capital L.P. (2) Mason Management LLC [2025] SGHC(I) 9 the SICC rejected the claimant state's request to overturn an investor-state arbitration award based on jurisdictional challenges or natural justice violations. The court found that the state's contentions regarding the absence of state "measures adopted or maintained" that were "relating to" the investor, as well as the investor's alleged lack of standing, did not constitute jurisdictional issues. The investor had brought arbitration proceedings alleging circumstances that could reasonably be characterized as state "measures adopted or maintained" that were "relating to" the investor and caused it harm. While the claimant state's challenge to the defendant's status as an "investor" was indeed jurisdictional in nature, the court determined that the defendant did qualify as an "investor." Additionally, the tribunal's decision to exclude or decline consideration of two supplementary pieces of evidence represented sound case management practices that did not cause unfair prejudice to the claimant state.