The government has filed a suit to revoke an international tribunal's recent ruling for Seoul to pay 32 million U.S. dollars in compensation to U.S. hedge fund Mason Capital for damages incurred during a controversial 2015 merger of two Samsung affiliates.

According to the justice ministry on Thursday, the Permanent Court of Arbitration(PCA) had falsely interpreted conditions for jurisdiction recognition under the South Korea-U.S. free trade agreement, which resulted in an unfair ruling in the investor-state dispute settlement(ISDS).

The ministry said the false interpretation and unfair ruling provide reasonable grounds to nullify the ruling.

The ministry said in order for an ISDS suit to be recognized under the FTA, it must simultaneously involve actions adopted or retained by a government and affect investors or investment, neither of which applies to the Mason case.

It added that Mason was falsely recognized as a legal owner of Samsung C&T shares, despite it only being a general partner acting on behalf of a fund in the Cayman Islands that actually owned the shares.

Mason filed the ISDS case in 2018, seeking over 200 million dollars in damages over Seoul's alleged "unfair" intervention in favor of the merger of Cheil Industries and Samsung C&T.