Court appraises Japanese company's assets to pay forced labor victims
A Daegu court appraised a joint Korean-Japanese venture company in Korea as it prepares to sell off the assets of a Japanese steel company to compensate wartime forced labor victims.
The Pohang branch of the Daegu District Court announced Thursday that it appraised PNR, a rotary hearth furnace technology joint venture by Japan's Nippon Steel and Korean steelmaker Posco.
Nippon Steel, formerly called Nippon Steel & Sumitomo Metal, was ordered by the Korean Supreme Court in October 2018 to pay 100 million won ($88,000) each to Korean victims of Japanese forced labor during World War II. The court made a similar ruling in November 2018 against Mitsubishi Heavy Industries.
Korea’s top court acknowledged the illegality of Japan’s 1910-45 colonial rule and recognized that the individual’s right to compensation has not expired.
Tokyo, on the other hand, has maintained that all compensation issues related to colonial rule were resolved through a 1965 treaty normalizing bilateral relations.
The Japanese companies refused to comply with the ruling from the Korean Supreme Court, and plaintiffs began the legal process to seize their assets in Korea.
The Pohang branch of the Daegu District Court notified Nippon Steel from June 2020 that the court had ruled to seize the company's assets.
The court made the notification publicly because the Japanese Foreign Ministry did not deliver court documents to Nippon Steel. The documents were posted on the court's website in June 2020 and were considered served as of August 2020, meaning the court is able to sell off the assets of the Japanese company.
The court authorized seizure of PNR’s 81,075 shares, worth around 405 million won.
Japan has warned that the liquidation of assets of Japanese companies in Korea will provoke a strong retaliation. Nippon Steel has as of August 2020 filed for an appeal to the court in Daegu.
The latest court action is expected to further escalate tensions between Seoul and Tokyo.
A trade dispute between the two nations followed the Supreme Court decision in 2018, and eventually led to the falling out of a years-long military agreement between them.
In July 2019, Japan implemented export restrictions impacting Korea's semiconductor and display industries and later removed Korea from its so-called white list of most trusted trading partners. While Japan didn’t officially acknowledge it, the move was seen as retaliation for the rulings Korea made on the forced labor issue.
In response to the export restrictions, Seoul decided to terminate its bilateral General Security of Military Information Agreement (Gsomia) intelligence-sharing pact with Tokyo in August 2019 but conditionally suspended this decision in November that year in favor of dialogue with Japan.
Signed in November 2016, Gsomia was renewed automatically every year unless either of the two countries decided to scrap the pact.
BY ESTHER CHUNG [email@example.com]