FILE - In this Nov. 29, 2018, file photo, victims of Japan's forced labor and their family members arrive at the Supreme Court in Seoul, South Korea. A South Korean district court said Wednesday, Jan. 9, 2019, it has decided to freeze the local assets of a Japanese company involved in compensation disputes for wartime Korean laborers. The sign reads " Mitsubishi Heavy Industries apologize and compensate victims." (AP Photo/Ahn Young-joon)

S. Korea orders seizure of Japan assets over forced labor

January 09, 2019 - 3:48 am

SEOUL, South Korea (AP) — A South Korean court said Wednesday it has ordered the seizure of local assets of a Japanese company after it refused to compensate Korean laborers who were forcibly employed during Japan's colonial rule, in an escalation of a diplomatic brawl between the Asian neighbors.

Japan called the decision "extremely regrettable" and said it will push for talks with Seoul on the issue.

In a landmark ruling in October, South Korea's Supreme Court ordered Nippon Steel & Sumitomo Metal Corp. to pay 100 million won ($88,000) each to four plaintiffs forced to work for the company when Japan colonized the Korean Peninsula in 1910-45.

But the company refused to follow that ruling, siding with Japan's long-held positon that all colonial-era compensation issues were settled by a 1965 treaty that restored diplomatic relations between the two governments. Japanese officials said they could take the issue to the International Court of Justice.

On Wednesday, the Daegu District Court's branch office in the southeastern city of Pohang said it issued the seizure order for some Korean assets of the Japanese company in early January after lawyers for the plaintiffs filed a request to do so.

The Japanese company holds 2.34 million shares, or around $9.7 million, in a joint venture in Pohang with South Korean steelmaker POSCO.

In Tokyo, Chief Cabinet Secretary Yoshihide Suga said Japan has "grave concern over the development." Suga was expected to hold a meeting of top officials later Wednesday to discuss how to respond.

Seoul's Foreign Ministry said it has no immediate comment on Suga's statement.

The asset freeze will become effective after a court document is delivered to the joint venture, said Kim Se Eun, one of the lawyers for the plaintiffs. She said an additional legal step is required to sell 81,075 of the 2.34 million shares that the district court ordered to be frozen. She declined to say when that step might be taken.

The asset freeze is likely to further chill diplomatic ties between South Korea and Japan, which are both key U.S. allies in the region. The October ruling was the first of its kind, and in November South Korea's Supreme Court ordered a second Japanese company, Mitsubishi Heavy Industries, to compensate 10 former Korean workers, drawing strong criticism from Japan.

When South Korea and Japan signed the 1965 treaty, South Korea received more than $800 million in economic aid and loans from Japan and used the money to rebuild its infrastructure and economy devastated by the 1950-53 Korean War.

In its October and November verdicts, the South Korean Supreme Court said the 1965 treaty cannot prevent individuals from seeking compensation for forced labor because Japanese companies' use of such laborers was an illegal act against humanity that was linked to Tokyo's colonial rule and its war of aggression.

Many South Koreans still harbor strong resentment of Japanese colonial rule, when hundreds of thousands of Koreans were mobilized as forced laborers for Japanese companies or sex slaves at Tokyo's wartime brothels.

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Associated Press writer Mari Yamaguchi in Tokyo contributed to this report.

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