The Ministry of Justice announced Friday that it had sought an annulment of an international arbitration's ruling to pay $216.02 million in damages to US-based private equity firm Lone Star over its sales of a Korean commercial bank in 2012.

The government seeks to nullify the entire award it owes to Lone Star to save taxpayers' money, it said in a statement.

This announcement came four months after the World Bank's International Center for Settlement of Investment Disputes rectified Seoul's damage to Lone Star in May, from $216.5 million as concluded in August 2022.

The Justice Ministry claimed the ICSID ruling in May demonstrates that the ICSID tribunal has manifestly exceeded its power, seriously departed from fundamental procedural rules and failed to state its reasons. These claims are among five types of grounds on which an award may be annulled, under the ICSID Convention.

According to the Justice Ministry's statement, the tribunal failed to properly recognize the cause of the delay in its approval of Lone Star's commercial bank sale, claiming the delay -- which consequentially reduced the sales price for the deal, which closed in 2012 -- originates from a red flag raised by stock price manipulation by the then-chief of Lone Star's Korean operations, who was convicted in 2012. The tribunal also failed to specify what the Korean financial authorities' responsibility was when it found that the authorities committed a breach of responsibility. These issues should be seen as evidence that the ICSID manifestly exceeded its jurisdictional powers, according to the ministry.

Moreover, the government stated that the tribunal deprived the government of chances to counterclaim when it admitted evidence, and that the ruling came without documented proof that Korea had orchestrated the price reduction from behind the scenes. Both issues should be regarded as departures from fundamental procedural rules.

Friday's statement followed Lone Star's filing to cancel the ICSID ruling on July 29. The Korean government and Lone Star were to file the application for the annulment before the deadline of Wednesday at 12:59 p.m. Korea Standard Time.

The fallout from the multibillion-dollar deal dates back to decades ago.

In 2003, Lone Star bought a majority stake in Korea Exchange Bank for 1.38 trillion won ($1.05 billion).

Lone Star agreed to sell its now-defunct Korea Exchange Bank stake to its commercial banking competitor, Hana Bank, for 4.69 trillion won in 2010, but Lone Star's proceeds from the sales deal fell to 3.92 trillion won in 2012.

Lone Star has held the government accountable for delaying the review of the transaction process. It filed in 2012 to seek $4.68 billion in compensation. The award recognized in the May ruling amounts to less than 5 percent of what Lone Star had filed for.