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An unfair judicial ruling in South Korea has, once again, taken a Japanese company a step closer to possibly suffering real damage. In order to avoid further turmoil in Japan-South Korea relations, the South Korean government should expedite efforts to break the deadlock.
A South Korean district court has ordered that assets seized from Mitsubishi Heavy Industries, Ltd. be liquidated. This is the first time the liquidation of Japanese corporate assets has been ordered in a lawsuit related to former requisitioned workers who were mobilized from the Korean Peninsula during Japan’s colonial rule.
The plaintiffs have been proceeding with the seizure of MHI assets and their liquidation by sale since 2018, when South Korea’s Supreme Court ordered MHI to pay compensation to former members of the women volunteer labor corps, among others.
The relevant MHI assets in South Korea, comprising two trademark rights and six patent rights worth ¥75 million in total, have already been seized. MHI plans to file an immediate appeal against the court decision, so it will take some time before the assets are actually liquidated. However, it is certain that the issue of former requisitioned workers is entering a critical phase.
It is natural for Tokyo to lodge a protest with Seoul. Foreign Minister Toshimitsu Motegi said firmly, “The liquidation will bring about a serious situation for both Japan and South Korea.” He likely warned that Japan would take countermeasures if Japanese companies were actually affected.
In the case of Nippon Steel Corp., South Korea’s Supreme Court has also ordered the company to pay compensation to former requisitioned workers, and the plaintiffs have asked a court to order that the company’s assets be liquidated.
In addition to these cases, there has been a series of lawsuits against Japanese companies that were filed mainly by former requisitioned workers, so there is no end to the turmoil surrounding the Supreme Court’s rulings.
In the first place, the Supreme Court’s rulings have a crucial problem. They undermined the legal foundation of the bilateral relationship by violating the 1965 Agreement on the Settlement of Problems concerning Property and Claims and on Economic Cooperation between the two countries that stipulated the issue of claims was “settled completely and finally.”
South Korean President Moon Jae-in bears great responsibility for advocating a “victim-centered principle” that prioritizes the claims of former requisitioned workers and others and fanning anti-Japanese sentiment in the judiciary. He may have underestimated Japan and South Korea’s history of economic cooperation and multifaceted exchanges based on the agreement.
It was not until this year that Moon announced his view that the liquidation of Japanese corporate assets is “undesirable” for Japan-South Korea relations and showed his willingness to improve bilateral relations.
However, Moon has yet to offer any concrete solution. If he believes it is necessary to pay compensation to former requisitioned workers, the South Korean government should do so. His administration has no other choice but to devise and implement measures to prevent damage to Japanese companies.
Moon has about seven months left in his tenure. He should not leave a negative legacy that could weigh heavily on the Japan-South Korea relationship for the next administration. It is hoped that he will do his best to bring things under control before he leaves office.
— The original Japanese article appeared in The Yomiuri Shimbun on Oct. 4, 2021.
