Japan seeks arbitration with South Korea on forced-labour claims

South Korea's Supreme Court in Seoul ruled in November that Mitsubishi Heavy Industries Ltd must pay between 100 million won and 150 million won to each of five plaintiffs who were forced to work in a military factory.
South Korea's Supreme Court in Seoul ruled in November that Mitsubishi Heavy Industries Ltd must pay between 100 million won and 150 million won to each of five plaintiffs who were forced to work in a military factory.PHOTO: REUTERS

TOKYO/SEOUL (BLOOMBERG) - Japan is seeking arbitration with South Korea over compensation claims for Koreans conscripted into labour decades ago by Japanese firms, saying it has exhausted diplomacy with its neighbour on the simmering dispute.

Seoul and Tokyo have been at loggerheads for months on resolving the fight that stemmed from South Korean court decisions last year ordering compensation from Japanese companies whose predecessors used forced labour during the 1910-1945 colonial occupation of the peninsula - a flare-up in a historical conflict that has plunged ties to their lowest level in years.

Japan notified South Korea of its decision on Monday (May 20), saying it has the right to seek arbitration under a 1965 treaty that set up relations between the two.

"The matter could not be resolved through consultations," the Ministry of Foreign Affairs said in explaining why it is seeking the move.

South Korea's foreign ministry confirmed that it received Japan's official letter and said it will "carefully" review the request "considering related elements".

The treaty states that disputes should be settled through diplomatic channels, and matters for which a settlement cannot be reached should go to arbitration. The treaty spells out terms for the two to select a third-party arbitrator on their own, or have appointments made if they cannot decide. South Korea has to respond to Japan within 30 days of receiving its official letter.

The US has military alliances with both countries aimed at keeping peace in a region that includes North Korea. But America hasn't made a major public effort to patch up the latest dispute between Japan and Korea.

The latest move from Japan comes as US President Donald Trump is due to arrive in Tokyo on Saturday for a state visit. He will be the first head of state to meet the country's new Emperor Naruhito.

Mr Trump has no plans to visit South Korea on the trip, but will go there next month while he is in Asia for the Group of 20 summit in Osaka.

 

COURT ACTION

South Korea's Supreme Court in Seoul ruled in November that Mitsubishi Heavy Industries must pay between 100 million won (S$115,300) and 150 million won to each of five plaintiffs who were forced to work in a military factory, a month after finding Nippon Steel & Sumitomo Metal Corp liable in a similar case.

Its courts have ordered the seizure of assets in South Korea in entities associated with the Japanese firms, such as stocks in joint ventures.

There are more than a dozen other lawsuits in the pipeline, affecting about 70 Japanese companies, according to Japan's Ministry of Foreign Affairs.

Japan says all claims relating to the colonial period were settled under the 1965 treaty, which was accompanied by a payment of US$300 million (S$412 million), and that South Korea should be responsible for any compensation.

South Korean President Moon Jae-in has said the treaty doesn't prevent Koreans from suing Japanese firms and that the decisions of the courts should be respected.