The logo of Samsung C&T is seen in a flag outside the company's Seoul office / Newsis

Korea lost an appeal on Thursday against a ruling that required it to pay U.S. hedge fund Elliott more than $100 million in a dispute over the 2015 merger of two affiliates of electronics group Samsung.

Last year the Korean government was ordered to pay around $108.5 million, including damages, interest and legal fees, by the Netherlands-based Permanent Court of Arbitration.

Korea sought to appeal against that decision at London's High Court, arguing the PCA did not have jurisdiction to make the ruling under a free trade agreement with the U.S., but its legal challenge was rejected on Thursday.

Elliott welcomed the ruling, saying in a statement that the decision was "the proper outcome based on well-established principles of English law."

Elliott had sued over the role played by Korea's National Pension Service in approving an $8 billion merger between Samsung C&T, in which Elliott was a minority stakeholder, and Cheil Industries.

The 2015 merger has also prompted similar legal action from New York hedge fund Mason Capital Management – which in April was awarded about $32 million plus interest – and separate criminal proceedings in Korea.

Samsung Electronics Chairman Lee Jae-yong was found not guilty of accounting fraud and stock manipulation by a Seoul court in February, a ruling which is under appeal by prosecutors. (Reuters)