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S. Korea court orders Nippon Steel to pay damages over wartime labor

This photo taken in October 2018 shows Nippon Steel & Sumitomo Metal Corp. in Tokyo. (Kyodo)

SEOUL (Kyodo) -- A South Korean appeals court on Wednesday upheld a lower court ruling ordering Japanese steelmaker Nippon Steel Corp. to compensate Korean plaintiffs who claimed they were forced to work during World War II.

The Seoul High Court ruling comes in line with Supreme Court decisions last year ordering Japanese companies, including Nippon Steel, to pay damages to victims of forced labor during Japan's 1910-1945 colonial rule of the Korean Peninsula.

The issue of wartime labor compensation has strained bilateral ties, with the Japanese government taking the position that the issue was settled by a 1965 accord under which Japan provided South Korea with $500 million in "economic cooperation."

Japan is also asking South Korea to propose a solution that would not harm the interests of Japanese businesses operating in South Korea.

The Seoul Central District Court originally ordered the steelmaker in 2015 to pay seven plaintiffs 100 million won ($86,300) each, prompting the company to appeal the ruling to the higher court.

Wednesday's ruling upheld the decision and dismissed Nippon Steel's appeal. But with all seven original plaintiffs dead, including one who died earlier this year, their lawyers said they wanted their kin to take over as plaintiffs, but could not resolve legal issues before the ruling.

In late October, the top court ordered Nippon Steel, then named Nippon Steel & Sumitomo Metal Corp., to pay a different group of South Koreans 100 million won each in damages for wartime forced work. Since then, courts in South Korea have ruled in favor of plaintiffs in similar cases.

About 974 million won worth of the steelmaker's assets in South Korea were seized earlier this year upon the request of lawyers for plaintiffs, as the Japanese firm refused to comply with the top court's compensation order.

Lim Jae Sung, one of the lawyers for the plaintiffs in Nippon Steel cases, stressed after Wednesday's ruling that in May the lawyers requested a court to liquidate the assets.

"All we can do now is wait for the court's decision" to proceed with the asset sales, he said.

The lawyers said they are preparing similar lawsuits against other Japanese companies. As a precedent has already been set in the country's highest court, additional lawsuits, if filed, would likely be won by plaintiffs.

Last week, South Korea said it was open to bilateral talks on the compensation issue with Japan on the condition that companies from both countries fund compensation to the plaintiffs.

But Japan rejected the proposal, saying it has moved on from seeking bilateral talks to an arbitration process involving other countries under the terms of the 1965 bilateral accord.

South Korean Foreign Minister Kang Kyung Wha said Tuesday that some South Korean companies have indicated their readiness to provide funds. She did not name the firms, but they are believed to be ones that benefited financially from the 1965 accord.

Another appeals court ruling involving Japanese manufacturer Mitsubishi Heavy Industries Ltd. is scheduled Thursday.

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