U.S. hedge fund Elliott Management has filed an investor-state dispute(ISD) lawsuit against the South Korean government seeking compensation for its losses from a merger of two Samsung units.

According to the Seoul government, the hedge fund has filed a notice of arbitration claiming it suffered losses of at least 770 million dollars from the 2015 merger of Samsung C&T and Cheil Industries because the Korean government at the time took unjustified measures in approving that deal. 

The notice is seen as a prior step to full-fledged litigation.

In April, Elliott sent a notice of intent seeking arbitration of the dispute to the Seoul government asking whether it was willing to settle the issue. If the matter is not resolved through settlement in 90 days, the investor can then file an ISD lawsuit.

Elliott's damage claim has also increased by 100 million dollars from the amount it claimed in April.