The Rt. Hon. Dame Elizabeth Gloster
One Essex Court
Temple
London EC4Y 9AR
United Kingdom

Professor Pierre Mayer
20 Rue des Pyramides
Paris 75001
France

Professor Dr. Klaus Sachs
CMS Hasche Sigle
Nymphenburger Straße 12
80335 Munich
Germany

Tribunal: Professor Dr. Klaus Sachs Presiding Arbitrator
The Rt. Hon. Dame Elizabeth Gloster Arbitrator
Professor Pierre Mayer Arbitrator
Mr. Marcus Weiler Assistant to the Tribunal
Dr. Levent Sabanogullari PCA

Claimants: Mr. James McGovern General Counsel and Chief Compliance Officer, Mason Capital
Ms. Claudia T. Salomon Counsel, Latham & Watkins
Ms. Sophie J. Lamb QC Counsel, Latham & Watkins
Mr. Michael A. Watsula Counsel, Latham & Watkins
Mr. Bryce Williams Counsel, Latham & Watkins
Mr. Dong-Seok (Johan) Oh Counsel, KL Partners
Mr. John M. Kim Counsel, KL Partners
Ms. Jisun Hwang Counsel, KL Partners
Mr. Kenneth Garschina Co-Founder, Mason Capital (Witness)
Mr. Derek Satzinger CFO, Mason Capital (Witness)
Mr. Rolf Lindsay Partner, Walkers (Expert)
Professor Jae Yeol Kwon Dean, Kyung Hee University School of Law (Expert)
Ms. Wansoo Suh Interpreter
Mr. Jon Walton Legal Assistant, Latham & Watkins
Ms. Laura Vazquez Legal Assistant, Latham & Watkins

Respondent: Mr. Changwan Han Ministry of Justice
Mr. Donghwan Shin Ministry of Justice
Ms. Sujin Kim Ministry of Justice
Mr. Sangjin Park Ministry of Health and Welfare
Mr. Kyungsung Yoo Ministry of Health and Welfare
Mr. Paul Friedland Counsel, White & Case
Mr. Damien Nyer Counsel, White & Case
Mr. Sven Volkmer Counsel, White & Case
Mr. Surya Gopalan Counsel, White & Case
Mr. Sanghoon Han Counsel, Lee & Ko
Ms. Ji Hyun Yoon Counsel, Lee & Ko
Mr. Richard Jung Yeun Won Counsel, Lee & Ko
Ms. Rachael Reynolds Partner, Ogier (Expert)
Professor Hyeok-Joon Rho Professor, Seoul National University School of Law (Expert)
Mr. Chi-hyun Ahn Interpreter

a. Mason Capital L.P., a limited partnership organized under the laws of the State of Delaware, the United States of America (the "Domestic Fund"); and

b. Mason Capital Master Fund L.P., an exempted limited partnership governed by the Exempted Limited Partnership Law, 2014 of the Cayman Islands (the "Cayman Fund", "Fund" or "Partnership").⁷

SECTION 3
SAVING OF RULES OF EQUITY AND COMMON LAW

The rules of equity and of common law applicable to partnerships as modified by the Partnership Law but excluding sections 31, 45 to 54 and 56 to 57 shall apply to an exempted limited partnership, except where they are inconsistent with the express provisions of this Law.

SECTION 4(2)
CONSTITUTION

2) An exempted limited partnership shall consist of one or more persons called general partners who shall, in the event that the assets of the exempted limited partnership are inadequate, be liable for all debts and obligations of the exempted limited partnership, and one or more persons called limited partners who shall not be liable for the debts or obligations of the exempted limited partnership save as provided in the partnership agreement and to the extent specified in section 20(1) and 34(1), but a general partner, without derogation from his position as such, may, in addition, take an interest as a limited partner in the exempted limited partnership.

SECTION 14
MODIFICATION OF GENERAL LAW

1) A limited partner shall not take part in the conduct of the business of an exempted limited partnership in its capacity as limited partner.

2) All letters, contracts, deeds, instruments or documents whatsoever shall be entered into by or on behalf of the general partner (or any agent or delegate of the general partner) on behalf of the exempted limited partnership.

SECTION 16(1), (2)
PROPERTY

1) Any rights or property of every description of the exempted limited partnership, including all choses in action and any right to make capital calls and receive the proceeds thereof that is conveyed to or vested in or held on behalf of any one or more of the general partners or which is conveyed into or vested in the name of the exempted limited partnership shall be held or deemed to be held by the general partner and if more than one then by the general partners jointly, upon trust as an asset of the exempted limited partnership in accordance with the terms of the partnership agreement.

2) Any debt or obligation incurred by a general partner in the conduct of the business of an exempted limited partnership shall be a debt or obligation of the exempted limited partnership.

SECTION 20(1)
LIABILITY OF LIMITED PARTNER

1) If a limited partner takes part in the conduct of the business of an exempted limited partnership in its dealings with persons who are not partners, that limited partner shall be liable, in the event of the insolvency of the exempted limited partnership, for all debts and obligations of that exempted limited partnership incurred during the period that he participates in the conduct of the business as though he were, for that period, a general partner, but he shall be liable only to a person who transacts business with the exempted limited partnership during the period with actual knowledge of his participation and who then reasonably believed the limited partner to be a general partner.

SECTION 23
DIFFERENCES DECIDED BY GENERAL PARTNER

Any difference arising as to matters connected with the business of the exempted limited partnership shall be decided by the general partner, and, if more than one, by a majority of the general partners as is provided in the partnership agreement.

SECTION 33
PROCEEDINGS

1) Subject to subsection (3), legal proceedings by or against an exempted limited partnership may be instituted by or against any one or more of the general partners only, and a limited partner shall not be a party to or named in the proceedings.

2) If the court considers it just and equitable any person or a general partner shall have the right to join in or otherwise institute proceedings against any one or more of the limited partners who may be liable under section 20(1) or to enforce the return of the contribution, if any, required by section 34(1).

3) A limited partner may bring an action on behalf of an exempted limited partnership if any one or more of the general partners with authority to do so have, without cause, failed or refused to institute proceedings.

4) If any action taken pursuant to subsection (3) is successful, in whole or in part, as a result of a judgment, compromise or settlement of any action, the court may award any limited partner bringing any action reasonable expenses, including attorney's fees, from any recovery in any action or from an exempted limited partnership.

ARTICLE 1
ORGANIZATION

1.05 Objects and Purposes. The primary purpose of the Partnership shall be to purchase, sell or hold, for investment or speculation, Securities, on margin or otherwise, for the account and risk of the Partnership.

ARTICLE 2
DEFINITION

2.12 "Partnership Interests" shall mean a Partner's interest in the Partnership. The Partner's economic interest shall be expressed as a percentage equal to (i) the balance in the Capital Account of such Partner divided by (ii) the aggregate balance in the Capital Accounts of all the Partners at any given time. The

General Partner may, in its sole and absolute discretion, offer one or more series or sub-series of Partnership Interests.

ARTICLE 3
THE GENERAL PARTNER

3.01 Management. The management, control and the conduct of the business of the Partnership shall be vested exclusively in the General Partner. The General Partner is the general partner of the Partnership. The Limited Partners shall have no part in the management, control or operation of the Partnership or the conduct of its business and shall have no authority to act on behalf of the Partnership in connection with any matter, except as provided in Sections 10.01 and 12.01.

3.02 Authority of General Partner. The General Partner shall have the power by itself on behalf and in the name of the Partnership to carry out any and all of the objects and purposes of the Partnership set forth in Section 1.05, and to perform all acts and enter into and perform all contracts and other undertakings which it may deem necessary or advisable or incidental thereto, and to have and possess the same rights and powers as any general partner in a partnership formed under the laws of the Cayman Islands, including, without limitation, to:

n) commence or defend any litigation or arbitration involving the Partnership or the General Partner in its capacity as General Partner…

3.06 Exculpation. The General Partner (and its members, employees, agents and affiliates) (each, a "Covered Person") shall not be liable to any other Partner or the Partnership for any loss suffered by the Partnership unless such loss is caused by such Covered Person's Gross Negligence, willful misconduct or breach of fiduciary duty. A Covered Person may consult with counsel and accountants in respect of Partnership affairs and, in acting in accordance with the written advice or opinion of such counsel or accountants, such Covered Person shall not be liable for any loss suffered by the Partnership provided that such counsel or accountants shall have been selected with reasonable care and the written advice was not induced by such Covered Person's Gross Negligence or willful misconduct. Covered Persons shall not be liable for errors in judgment or for any acts or omissions that do not constitute Gross Negligence, willful misconduct or breach of fiduciary duty.

3.07 Indemnification.

a) A Covered Person shall be indemnified and held harmless by the Partnership from and against any and all losses, liabilities and expenses (collectively, "Losses") arising from claims, demands, investigations, actions, suits or proceedings, whether civil, criminal or administrative (each, a "Proceeding"), in which it (and its members, employees and agents) may be involved, as a party or otherwise, by reason of the management of the affairs of the Partnership, whether or not it continues to be such at the time any such Loss is paid or incurred. A Covered Person shall not be entitled to indemnification hereunder for any conduct arising from its Gross Negligence, willful misconduct, breach of its fiduciary duty or breach of this Agreement in connection with its management of the Partnership's affairs…

ARTICLE 4
CAPITAL ACCOUNTS

4.01 Capital Contributions. Each Partner shall make an initial Capital Contribution in cash or in kind, with the consent of the General Partner. Limited Partners shall also make an initial Capital Contribution that is attributable to each series or sub-series of shares issued by such Limited Partner for the benefit of the shareholder(s) of such series or sub-series. The initial Capital Contribution by a Limited Partner shall not be less than $1,000,000 for Partners admitted on or after the effective date of this Amended and Restated Limited Partnership Agreement, except to the extent the General Partner, at its sole discretion, permits an initial Capital Contribution in a lesser amount.

4.03 Capital Account. A capital account shall be established for each Partner on the books of the Partnership for the General Partner and for each series or subseries of shares issued by a Limited Partner (each, a "Capital Account"), and such Capital Account shall be adjusted as provided for herein. …

4.06 Allocation of Net Profits and Net Losses

a) Net Profits and Net Losses for a Valuation Period shall be preliminarily allocated among the Capital Accounts in proportion to their respective Opening Capital Balances for such Valuation Period.

b) With respect to each Capital Account of a Limited Partner, as of the end of each Fiscal Year, there shall be allocated to the Capital Account of the General Partner, as its incentive allocation (the "Incentive Allocation") 20% of:

i) the Cumulative Net Profits preliminarily allocated to such Capital Account of such Limited Partner pursuant to Section 4.06(a) for such Fiscal Year minus

x) any management fees paid by the Limited Partner on behalf of the shareholders of the series or sub-series corresponding to such Capital Account for such year, and

y) any expenses attributable to such series or sub-series of shares that are incurred by the Limited Partner and are not otherwise reflected in the Capital Account balance,

over (ii) the CUNL (as defined below), if any, for such Capital Account as of such Fiscal Year-end.

For the avoidance of doubt, the General Partner will not receive an Incentive Allocation for a Fiscal Year if the calculation in the previous sentence results in a negative number. For the avoidance of further doubt, an Incentive Allocation will be made with respect to a Capital Account for a partial calendar year due to an intra-year contribution, or in the event some or all amounts are voluntarily or mandatorily withdrawn from such Capital Account as of a date other than the end of a Fiscal Year. The General Partner, in its sole discretion, may reduce, waive or grant rebates with respect to the Incentive Allocations for certain Capital Accounts.

a. Declare that the Tribunal lacks jurisdiction over the claims brought by the GP

and dismiss all the claims brought by the GP on the basis that:

i) the GP cannot bring claims on behalf of the Cayman Fund under the FTA, and/or

ii) the GP does not qualify as an investor under Article 11.28 of the FTA.

b. In the alternative, declare that the GP's claim is, as a matter of law, not a claim

for which an award in favor of the GP may be made, and dismiss the GP's claims accordingly; and

c. Order any other relief the Tribunal deems appropriate.⁵⁴

a. Declare that the Tribunal lacks jurisdiction over the GP's claims on the basis that: the GP has not made an investment in accordance with Article 11.28 of the FTA; and/or the GP did not own or control the Samsung Shares, and, accordingly, dismiss all of the claims brought by the GP;

b. In the alternative:

i) Dismiss the GP's claim for losses incurred by the Cayman Fund and the Limited Partner on the basis that: the GP lacks standing to submit claims on behalf of third parties under Article 11.16.1; and/or the GP's claim in respect of such portion is, as a matter of law, not a claim for which an award in favor of the GP may be made under Article 11.20.6; and

ii) Declare that the GP can claim damages only to the extent of its own Partnership Interest in 2015;

c. Order Claimants to bear in full the costs of this preliminary phase of the arbitration and all of Korea's costs of legal representation and other expenses; and

d. Order any other relief the Tribunal deems appropriate.⁵⁵

a. declaring the General Partner's claim admissible, and that the Tribunal has jurisdiction over that claim;

b. rejecting Korea's objections to the Tribunal's competence;

c. rejecting Korea's objection to the General Partner's claim under Article 11.20.6 of the Treaty;

d. ordering that Korea pay all of Mason's costs incurred in relation to this phase of the proceedings, including attorneys' fees and expenses, expert witness costs and the costs of the arbitration, and compound interest on all such costs; and

e. ordering such other relief as the Tribunal may deem appropriate,

and proceed to the merits of Mason's claims.⁵⁹

a. declaring the General Partner's claim admissible, and that the Tribunal has jurisdiction over that claim;

b. rejecting Korea's objections to the Tribunal's competence;

c. rejecting Korea's objection to the General Partner's claim under Article 11.20.6 of the Treaty;

d. ordering that Korea pay all of Mason's costs incurred in relation to this phase of the proceedings, including attorneys' fees and expenses, expert witness costs and the costs of the arbitration, and compound interest on all such costs; and

e. ordering such other relief as the Tribunal may deem appropriate;

and proceed to the merits of Mason's claims.⁶⁰

ARTICLE 11.20
CONDUCT OF THE ARBITRATION

6. Without prejudice to a tribunal's authority to address other objections as a preliminary question, a tribunal shall address and decide as a preliminary question any objection by the respondent that, as a matter of law, a claim submitted is not a claim for which an award in favor of the claimant may be made under Article 11.26.

a) Such objection shall be submitted to the tribunal as soon as possible after the tribunal is constituted, and in no event later than the date the tribunal fixes for the respondent to submit its counter-memorial or, in the case of an amendment to the notice of arbitration, the date the tribunal fixes for the respondent to submit its response to the amendment.

b) On receipt of an objection under this paragraph, the tribunal shall suspend any proceedings on the merits, establish a schedule for considering the objection consistent with any schedule it has established for considering any other preliminary question, and issue a decision or award on the objection, stating the grounds therefor.

c) In deciding an objection under this paragraph, the tribunal shall assume to be true claimant's factual allegations in support of any claim in the notice of arbitration (or any amendment thereof) and, in disputes brought under the UNCITRAL Arbitration Rules, the statement of claim referred to in Article 18 of the UNCITRAL Arbitration Rules. The tribunal may also consider any relevant facts not in dispute.

d) The respondent does not waive any objection as to competence or any argument on the merits merely because the respondent did or did not raise an objection under this paragraph or make use of the expedited procedure set out in paragraph 7.

7. In the event that the respondent so requests within 45 days of the date

the tribunal is constituted, the tribunal shall decide on an expedited basis an objection under paragraph 6 and any objection that the dispute is not within the tribunal's competence. The tribunal shall suspend any proceedings on the merits and issue a decision or award on the objection(s), stating the grounds therefor, no later than 150 days after the date of the request. However, if a disputing party requests a hearing, the tribunal may take an additional 30 days to issue the decision or award. Regardless of whether a hearing is requested, a tribunal may, on a showing of extraordinary cause, delay issuing its decision or award by an additional brief period, which may not exceed 30 days.

ARTICLE 11.16
SUBMISSION OF A CLAIM TO ARBITRATION

1. In the event that a disputing party considers that an investment dispute cannot be settled by consultation and negotiation:

a) the claimant, on its own behalf, may submit to arbitration under this Section a claim

i) that the respondent has breached

A) an obligation under Section A,

B) an investment authorization, or

C) an investment agreement;

and

ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and

b) the claimant, on behalf of an enterprise of the respondent that is a juridical person that the claimant owns or controls directly or indirectly, may submit to arbitration under this Section a claim

i) that the respondent has breached

A) an obligation under Section A,

B) an investment authorization, or

C) an investment agreement;

and

ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach

…

(emphasis added).

ARTICLE 11.28
DEFINITIONS

For the purposes of this Chapter

…

enterprise of a Party means an enterprise constituted or organized under the law of a Party, and a branch located in the territory of a Party and carrying out business activities there.

…

investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk.

Forms that an investment may take include:

a) …

b) shares, stock, and other forms of equity participation in an enterprise;

c) …

…

investor of a Party means a Party or state enterprise thereof, or a national or an enterprise of a Party, that attempts to make, is making, or has made an investment in the territory of the other Party; provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality.

(emphasis added).

ARTICLE 1.4
DEFINITIONS

For the purposes of this Agreement, unless otherwise specified:

enterprise of a Party means an enterprise constituted or organized under a Party's law

national means:

a) with respect to Korea, a Korean national within the meaning of the Nationality Act ; and

b) with respect to the United States, "national of the United States" as defined in the Immigration and Nationality Act.

"[i]f the Samsung Shares lose value, the General Partner will receive zero return for that investment notwithstanding its ongoing commitment of significant resources".¹⁴⁶ Other risks, according to Claimants, include "significant and material financial and reputational damage" to the General Partner.¹⁴⁷

As far as the position of international law towards beneficial owners, in cases where the legal title and the beneficial ownership are split, is concerned, it is quite uncontroversial, after a thorough review of the existing doctrine and case-law, that international law grants relief to the owner of the economic interest.²⁰²

In cases where legal title is split between a nominee and a beneficial owner international law is uncontroversial: as Arbitrator Stern has stated in her Dissent the dominant position in international law grants standing and relief to the owner of the beneficial interest – not to the nominee.²⁰³

[T]he division of property rights amongst several persons or the separation of legal and beneficial ownership is commonly accepted in a number of legal systems, be it through a trust, a fiducie or any other similar structure. Such structures are in no way indicative of a sham or a fraudulent conveyance, and no such presumption should be entertained without convincing evidence to the contrary. The separation of legal title and beneficial ownership rights does not deprive such ownership of the characteristics of an investment within the meaning of the ICSID Convention or the Netherlands-Turkey BIT. Neither the ICSID Convention, nor the BIT make any distinction which could be interpreted as an exclusion of a bare legal title from the scope of the ICSID Convention or from the protection of the BIT.²⁰⁴

The next ground of challenge is that the von Pezold Claimants have not proved beneficial ownership. The Tribunal can find no requirement that beneficial ownership be proven in either the Swiss or German BITs, and sees no basis on which such a requirement should be read into the BITs. In the present case, the Tribunal finds that the Claimants have provided prima facie evidence of legal ownership which has not been rebutted and this is sufficient to establish jurisdiction.²⁰⁵

Q. Then, on a last topic, I'm coming back to the discussion of indivisibility. Does the notion of 'indivisibility' determine the amount of a Partner's beneficial interest in the Partnership?

A. (Ms. Reynolds) Do you mean quantum?

Q. Yes.

A. (Ms. Reynolds) I would say no.

A. (Mr. Lindsay) No, it doesn't. That's the whole – that is the point of indivisibility.

So, to the extent that two or three assets perform especially well and the General Partner feels buoyed by the idea that it will share in the upside of those assets, it has, until the point that you conduct the calculation of the Net Profit at the end of the year, it has notionally an indivisible interest in the upside of those assets. If one asset, then, performs particularly badly, then the General Partner loses the benefit of the stellar performance of the other assets.

Q. Right.

So, does the notion of indivisibility help us to determine if a Partner has, for example, 1 percent beneficial interest or a 99 percent beneficial interest?

A. (Mr. Lindsay) No.

A. (Ms. Reynolds) No. (emphasis added)²²¹

The team under my supervision spent hundreds of hours investigating and analyzing Samsung Electronics and the Samsung Group. The internal team regularly met and discussed the company's performance, including reviewing analyst reports from local and international brokers, and preparing and compiling models for the companies. The team travelled to Korea, and worked with other market participants (including other foreign investors in Samsung, and investment banks), with experts on Korean companies and the Korean market, and with the Samsung Group's investor relations group …

While Mason was a minority foreign investor, and its ability to control the ultimate direction of the company was limited, it was clear that Samsung was at least outwardly interested in the views of foreign investors on Samsung's approach to corporate governance. The team's regular meetings with Samsung's investor relations group were not only an opportunity to learn more about the drivers of the Samsung business, but also to express our views and suggestions on Samsung's corporate strategy, provide feedback on the expectations of the market, and contribute to the pressure on Samsung to reform its internal governance.²³⁹

The Arbitral Tribunal does not consider that, as a matter of principle, there is some fixed minimum duration that determines whether assets qualify as investments. Short-term projects are not deprived of 'investment' status solely by virtue of their limited duration. Duration is to be analyzed in light of all of the circumstances, and of the investor's overall commitment.²⁵⁸

What prompted us to invest at that time was the prospect that the transition to the next generation of leadership would require a significant restructuring of the Samsung Group. The restructuring would be a catalyst to unlock value in the business for shareholders. The Samsung heir apparent was under a lot of pressure from shareholders (particularly foreign shareholders) to improve governance and increase returns …

Consistent with our view, Samsung was interested in foreign investors' preferences for returns and a desire to be in line with global peers within 2-3 years. Samsung's view was that restructuring was likely to take the form of a holding/operating company structure, but this was 'unlikely to be a near-term event' given tax, money and other logistics involved.²⁵⁹

[a]lso a part of it was the corporate environment in Korea and the fact that laws had been passed that would require certain structures to be unwound. Those structures, commonly referred to as the 'chaebol' system, are a group of circularity- driven – I mean, if you looked at the Mason capital structure, and I'm confused by it, if you looked at the Samsung structure, your brain would explode, so the Government of Korea said this is not hospitable to investment capital.²⁶⁰

Q. And do I understand your testimony to be that the time horizon on your Samsung holdings was longer than three to nine months?

A. It was impossible to tell because of the complexity of it. …

Q. It was impossible to tell, I think that's good enough.

A. You know, some investments you make, there's a merger agreement, and you're going to get paid a certain amount of money, and it's feasible to bracket a time period where you're going to receive your money. Other investments – and – and having a shorter time, your money invested for a shorter period of time is not a bad thing, it's a good thing, because your Internal Rate of Return will be higher and your investor's capital will be at risk for a shorter period of time and for less market risk, a lot of other factors that we were not interested in imposing on our investors unnecessarily.

But this investment is more of an open-ended, long-term investment because the gestation period for change in Korea was going to be long. I would compare it to like a long bankruptcy investment where you have the process moves along quite slowly as evidenced by the fact that we're still sitting here in 2019, and they're still restructuring. (emphasis added)²⁶¹

Q. I'm asking you whether that is your testimony, that you intended to hold the Shares until after the restructuring?

A. I think – I think we were going to hold the Shares until not only in the restructuring happened but at a price – inherent in investing is being happy where the price is. You can't just – it's not untrue –

Q. Right.

A. – but there are many reasons.

Q. Right. So, you were intending to hold the Shares until you could make money selling them in the market; right?

A. Or until there was a reason that we had to get out, which happened in this case.²⁶²

Re: chairman's health and potential corporate governance, they think the company will eventually have some sort of holdco/opco structure. But this could take easily 5+ years to come to fruition as the amount of tax, money and other logistics involved will make it unlikely to be a near-term event. (emphasis added)²⁶⁵

[REDACTED] (emphasis added)²⁶⁶

We are primarily value-driven, with a longer-term time horizon. We generally take a bottoms up, fundamental view on most positions. We invest globally across all asset classes, but mostly in equities and credit. We have taken large positions within Asia, that we have held for several years. (emphasis added)²⁶⁷

Q. And isn't it true that you sold your entire holding of Samsung Electronics – by the 10th of October, you had sold your entire holding of Samsung Electronics?

A. That's what it says. What I would say to you is that part of the execution process often is – it's like when you're going into an ocean, you don't jump in right away, at least I don't, sometimes you put a leg in, sometimes you put an arm in, and you splash water on yourself, and if you don't like it you may go out, but you ultimately go in, and that's part of the execution process for investing. And I think that's what you're seeing here. It's maximizing, getting the lowest price for our investors for which – who we're fiduciaries.

Q. I understand the reasons. But what I'm asking you is that by the 10th of October 2014, isn't it true that Mason had liquidated its entire holding in Samsung Electronics?

A. It looks like that, but again, I would say that that's not the end of the investment. That's part of the execution process. (emphasis added)²⁷⁴

Q. You don't say anywhere in your Witness Statements, in your two Witness Statements, Mr. Garschina, that after the period from May 2014 to June 2015 Mason had been trading in and out of Samsung Electronics. You don't say that in your Witness Statements?

A. To me, it's not relevant. Optimizing our price is something completely different from my investment thesis and my investment research and the ideas I have in my mind. (emphasis added)²⁷⁵

Q. So, Mason held the Shares in SC&T for about two months; right? Correct?

A. Well, we started in April and we ended in August – August? Yeah, August.

Q. Sorry, Mason – you started in April, you bought 334,000, you sold them in April, and then you bought in May, in June, early June, and you held them until August. That's about two months.

A. That's the trading record, although I would emphasize that C&T was a proxy for Samsung Electronics. It essentially is a company – maybe still today; I haven't followed it – its primary asset was shares in Samsung Electronics. They had some other peripheral assets. But the reason to buy C&T – there were several reasons, but one of the main reasons to buy it was that it was a cheaper proxy of Samsung Electronics.

So I don't – you haven't pointed me to how much Samsung Electronics we owned at this point.

Q. Right.

A. But what I would say is that it's a – my recollection is that we swapped, not in a financial funding instrument, but we sold some Samsung or just bought Samsung C&T as a cheaper way to buy Samsung Electronics.

So, when I look at our investment at Samsung, it's in – for restructuring of Samsung, it says as a whole. It's not C&T or Samsung.

And importantly, I think that C&T effectively, its main asset was Samsung Electronics in the cross holdings. So, if you added up the Shares in Samsung Electronics and then added up the other, I believe there was some real estate and a few other operating businesses – I believe there was a blood – some sort of generic biotech business – if you added that up, you are 'creating,' my word, Samsung Electronics at a cheaper price.

So, when you say we entered C&T and we exited at – and during a short period of time, I would say two things: One, our investment, as I said before, begins the day we start research. Executing in the market is a switch that we turn on when we want to have economic exposure to that investment process.

And two, Samsung and Samsung C&T were not completely disconnected investments since they were overlapping in the sense that they were both inherently exposed to Samsung Electronics and that Samsung C&T was also undergoing a merger vote that we anticipated would have to be – the exchange ratio would have to be increased if the vote was turned out. (emphasis added)²⁷⁶

The Tribunal does not consider that the standard of review under Article 10.20.4 is limited to "frivolous" claims or "legally impossible" claims, contrary to the submissions of the Claimant …

The Tribunal does consider that the word "may" in Article 10.20.4 (line 4) confers an important arbitral power in whether to grant or refuse a preliminary objection, to be exercised reasonably in all the circumstances of the particular case. The word "may" is not "must" or otherwise mandatory …

In other words, returning to the negative language of Article 10.20.4, to grant a preliminary objection, a tribunal must have reached a position, both as to all relevant questions of law and all relevant alleged or undisputed facts, that an award should be made finally dismissing the claimant's claim at the very outset of the arbitration proceedings, without more. Depending on the particular circumstances of each case, there are many reasons why a tribunal might reasonably decide not to exercise such a power against a claimant, even where it considered that such a claim appeared likely (but not certain) to fail if assessed only at the time of the preliminary objection. (emphasis added)³⁴⁶

When it decides a respondent's objection under paragraph 6 or 7, the tribunal may, if warranted, award to the prevailing disputing party reasonable costs and attorney's fees incurred in submitting or opposing the objection. In determining whether such an award is warranted, the tribunal shall consider whether either the claimant's claim or the respondent's objection was frivolous, and shall provide the disputing parties a reasonable opportunity to comment.

a) declares that the General Partner owned and controlled the Samsung Shares and made an investment in accordance with Article 11.28 of the FTA; accordingly rejects Respondent's request for a declaration that the Tribunal lacks jurisdiction over the General Partner's claim on the basis that: (i) the General Partner has not made an investment in accordance with Article 11.28 of the FTA and/or (ii) the General Partner did not own or control the Samsung Shares; and rejects Respondent's request to dismiss all of the claims brought by the General Partner for that reason;

b) rejects Respondent's application to dismiss, at this stage of the proceedings, the General Partner's claim for losses incurred by the Cayman Fund and the Limited Partner on the basis that the General Partner lacks standing to submit claims on behalf of third parties under Article 11.16.1 of the FTA;

c) rejects Respondent's request to dismiss the General Partner's claim for losses incurred by the Cayman Fund and the Limited Partner on the basis that the General Partner's claim in respect of such portion is, as a matter of law, not a claim for which an award in favour of the General Partner may be made under Article 11.26 of the FTA;

d) rejects Respondent's request for a declaration that the General Partner can claim damages only to the extent of its own Partnership Interest in 2015;

e) rejects Claimants' application for a declaration at this stage of the proceedings that the General Partner's claim is admissible and that the Tribunal has jurisdiction over that claim;

f) reserves its decision on the costs of this preliminary phase of the arbitration for the final award.