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Latham Secures Significant Victory for Mason Capital in Investor-State Arbitration Against South Korea

April 11, 2024
Cross-office team wins arbitration brought under Korea-US Free Trade Agreement.

Latham & Watkins has secured a resounding victory for its client, Mason Capital, in a high-stakes investor-state arbitration against the Republic of Korea. The case is particularly significant given that the dispute arose from one of the biggest governmental corruption scandals in the Southeast Asian region which resulted in the conviction of Korea’s then-Head of State and other high-ranking officials.

The dispute centered on the 2015 merger of Samsung Group affiliates, Samsung C&T Corp., and Cheil Industries Inc. Mason Capital, a significant shareholder in Samsung C&T and a related entity, brought an arbitration under the Korea-US Free Trade Agreement in order to hold the government to account for its improper intervention in support of the merger that grossly undervalued Samsung C&T’s shares.

After rigorous legal proceedings, the tribunal has awarded significant compensation and compound interest to Mason, together with a high proportion of Mason’s legal costs. This marks a defining moment in the enforcement of investor rights under the Korea-US Free Trade Agreement.

Sophie Lamb KC, Litigation & Trial partner at Latham & Watkins in London commented: “We are thrilled for the outcome for Mason Capital. The decision fully vindicates their investment strategies and their long battle for just compensation. I am immensely proud of our team's work on this case. The victory is a testament to the strength of our international arbitration practice and our formidable advocacy.”

“It is an honor to have represented Mason Capital and secured this important award,” added Samuel Pape, Litigation & Trial partner at Latham & Watkins London. “This was a case in which a complex scheme was carried out by corrupt State actors and other powerful individuals to the detriment of foreign investors. The tribunal rightly rejected Korea’s attempts to escape responsibility for its scheme under international law. The award underscores the continued importance of the investment treaty system as a mechanism for international justice in circumstances such as these.”

The successful defense against Korea's Preliminary Objections in 2020 set the stage for a final hearing on the merits, which took place in New York in March 2022.

The Latham team was led by Litigation & Trial partners Sophie Lamb KC and Samuel Pape in London, Lilia Vazova in New York, and included associate Sarah Burack in New York.

Latham were assisted by Korean counsel KL Partners, now Baker & McKenzie Korea.