Republic of Korea v Elliott Associates, LP

For the purposes of a treaty jurisdiction clause, “measures” is not confined to formal legislative, regulatory or administrative acts. It may include informal governmental conduct, acts and omissions, and a series of interlinked steps. A separate legal person will rarely constitute a de facto state organ. Outside core state functions, exceptional circumstances and a high degree of dependence on the state are required. The exercise of ordinary shareholder voting rights is not, without more, the exercise of delegated governmental authority. A treaty requiring measures to relate to an investor requires a legally significant connection involving proximity, rather than a merely indirect economic effect. Under Arbitration Act 1996, an award may be set aside in part and remitted where the unaffected conclusions do not depend on the jurisdictionally invalid findings.

The Republic of Korea challenged under section 67 of the Arbitration Act 1996 an investment treaty award in favour of Elliott Associates, LP. The arbitration concerned Korea’s alleged intervention in the vote by the National Pension Service on a proposed merger between Samsung C&T and Cheil Industries.

The court had previously dismissed the challenge as non-jurisdictional: [2024] EWHC 2037 (Comm). The Court of Appeal reversed that decision and remitted the matter: [2025] EWCA Civ 905. The issues were whether the relevant conduct constituted measures, whether the measures were adopted or maintained by Korea, and whether they related to Elliott’s investment.

1. Attribution. The National Pension Service was not a de jure or de facto organ of Korea. Its separate legal personality, ability to sue and be sued, commercial investment functions, operational autonomy and financial independence weighed strongly against that conclusion. De facto state-organ status is exceptional outside core state functions such as policing, defence, the judiciary and the Treasury. A multifactorial inquiry is required, but a very high degree of state dependence will ordinarily be necessary.
2. The NPS was not exercising delegated governmental authority when voting shares in the proposed merger. The voting rights were ordinary incidents of share ownership and did not amount to a sovereign or governmental power. Public oversight, fiduciary guidelines and the NPS’s public purpose did not alter that characterisation.
3. Article 11.1(3) of the Treaty excluded attribution under the customary-law principle reflected in Article 8 of the ILC Articles. The provision was an exhaustive and self-contained list of the relevant grounds of attribution. Nevertheless, had Article 8 applied, the evidence established that Korean state organs had instructed or directed the NPS to vote for the merger.
4. Measures. The term “measure” was broad and included informal conduct, acts, omissions and interlinked governmental steps. The President’s, Blue House’s, Ministry of Health and Welfare’s and Minister’s intervention constituted measures. The NPS vote would also have been a measure in the abstract, but it was not a measure adopted or maintained by Korea for Treaty purposes.
5. Relating to. A legally significant connection required more than a mere adverse or indirect effect. Proximity was required. A measure intended adversely to affect an investor, or whose direct and foreseeable consequence was such harm, would ordinarily satisfy the requirement. The intervention in the merger directly concerned shareholders and related to Elliott’s investment. Elliott was also specifically within the contemplation of the Korean officials who intervened.
6. Relief. The arbitral findings dependent on the NPS being a state organ were made without jurisdiction. The findings of breach concerning the Blue House measures did not depend on that erroneous attribution. However, the Tribunal had not clearly found that those measures independently caused the loss. The award was therefore set aside insofar as it treated the NPS as a state organ and found breaches on that basis, and causation and relief concerning the Blue House measures were remitted to the Tribunal for reconsideration.

• Court of Appeal: overturned the earlier decision, [2025] EWCA Civ 905, and remitted the section 67 challenge.
• High Court (Commercial Court): the earlier decision dismissed the challenge without determining the merits, [2024] EWHC 2037 (Comm). On remission, the present court allowed the challenge in part, set aside part of the award and remitted causation and relief.