[THE INVESTOR] US activist fund Elliott Associates has filed an investor-state dispute suit against the Korean government seeking compensation for its losses from a 2015 merger of two Samsung units, Seoul’s Justice Ministry said on July 13.

The notice of arbitration lodged by the American firm comes three months after Elliot asked Seoul if it was willing to settle the matter. Under the ISD procedure, if the matter is not resolved through settlement in 90 days, the investor can bring the claim directly to the international tribunal.

The ministry said it held talks with Elliott over the matter but failed to come to a settlement.

Elliott’s damages claim has increased by US$100 million from the amount it claimed in April when it sent to Korea the notice of intent proposing a settlement.

Elliott, with a 7 percent stake in Samsung C&T, led a proxy fight against the firm’s merger with Cheil Industries, citing unfair terms that it said greatly undervalued the company and investors’ interest. The controversial merger went ahead, backed by the state-run National Pension Service’s swing vote in Samsung’s favor.

The merger deal was widely seen as a step to facilitate the leadership succession at the family-run business empire from ailing patriarch Lee Kun-hee to his son, Samsung Electronics Vice Chairman Lee Jae-yong, after the elder Lee fell into a coma in 2014. 

By Song Seung-hyun and newswires (ssh@heraldcorp.com)