Court pushes for sale of Japanese firm’s assets to compensate wartime labor victims

A Korean court has kicked off the process of liquidating seized local assets of a Japanese company that committed World War II-era forced labor, as the Japanese government and the firm have ignored the ruling ordering it to compensate victims.

The Pohang branch of Daegu District Court decided Monday to give public notice of the court ruling made last year on seizing the Korean assets of Japanese steelmaker Nippon Steel, previously known as Nippon Steel & Sumitomo Metal Corp.

The procedure enables a court ruling to be considered to have been delivered to a defendant if the party fails to pick up judicial documents from the court until a certain date.

With that, the court has secured legal grounds to liquidate some 81,075 shares of PNR, a joint venture of the Japanese firm and Korean steelmaker Posco, and put them up for sale from Aug. 4. The shares, which are currently seized by the Korean court, are worth some 405 million won ($332,000).

PNR runs steel mills in Pohang, North Gyeongsang Province, and Gwangyang, South Jeolla Province.

The decision is a follow-up measure after the company refused to comply with the ruling in October 2018 to pay 100 million won each to four plaintiffs, including Lee Choon-sik, 96, the only remaining survivor among them, who had been forced to work at the company’s factories and mines during Japan’s 1910-1945 colonial rule of the Korean Peninsula.

In July last year, the Japanese Foreign Ministry sent back the documents relating to the court’s seizure order that had been delivered in February and remained unresponsive to the count’s redelivery in August.

The Japanese firm’s failure to abide by the court order prompted the victims to take legal steps toward seizure or liquidation of the company’s assets in Korea.

According to the legal representatives for four Korean plaintiffs Wednesday, they have repeatedly requested the court make a public notification to complete execution of the judicial decision, citing that the Japanese Foreign Ministry violated The Hague Service Convention, which establishes a uniform mechanism for serving judicial documents to parties in other countries and streamlines the service process so documents reach recipients in a timely manner.

“It took 13 years for the stock seizure ruling to come since we filed a suit and the enforcement process is also slowing down due to the Japanese government’s interference, they said in a statement.

Relations between South Korea and Japan have deteriorated since the 2018 ruling and similar orders in November against another company, Mitsubishi Heavy Industries.

Japan argues that colonial-era reparations were settled by the 1965 Normalization Treaty, under which Japan provided $500 million in economic assistance to Korea.

But the Korean Supreme Court said the 1965 treaty cannot prevent individuals from seeking compensation for forced labor because Japanese companies’ use of such workers was an illegal act against humanity that was linked to Tokyo’s colonial rule and its war of aggression.

Foreign Ministry spokesperson Kim In-chul said on Thursday that it is putting much effort into close consultation with Tokyo to come up with radical resolutions by taking into account respect for judicial decision, realization of victims’ rights and relations between the two nations.

Japan’s Chief Cabinet Secretary Yoshihide Suga said all options are on the table for countermeasures in order to protect economic activities of Japanese companies.

Some observers link this move by South Korea to stop its wait-and-see approach in its diplomatic row with Japan to the decision to resume a complaint filed with the World Trade Organization over Tokyo’s export restrictions.

The decision came as the Japanese government is reluctant to withdraw the restrictions on important materials for Korea’s key export items such as semiconductors and displays, it imposed in July last year in protest against the wartime labor compensation rulings.

By Park Han-na (hnpark@heraldcorp.com)