U.S. activist hedge fund Elliot has launched a legal dispute seeking compensation from the South Korean government over a controversial merger of two Samsung affiliates. 

Elliot said in a statement on Wednesday that it sent the South Korean Justice Ministry a notice of intent on April 13th seeking an investor-state dispute settlement that allows a company from one country to bring arbitration proceedings directly against the country in which it has invested.

Samsung C&T Corporation merged with Cheil Industries in 2015 despite protest from Elliott on the back of support from the National Pension Service(NPS). The NPS held an eleven-point-21 percent stake in Samsung C&T at the time of the deal, while Elliott's share accounted for about seven percent.

The hedge fund claimed that it has suffered losses as a Samsung C&T shareholder because the previous South Korean administration unfairly intervened in the merger. 

Elliott said that the actions of the former administration were in breach of the U.S.-Korea free trade agreement and “constituted manifestly unfair and inequitable treatment of Elliott.” It didn’t disclose how much it would seek in damages.