Nippon Steel to appeal S. Korean court ruling on war labor

TOKYO－Japan's Nippon Steel said on Tuesday that it will appeal a South Korean court ruling that allows for a seizure of its assets in South Korea, the latest development in a case that has inflamed tensions between Tokyo and Seoul.

The neighbors are at loggerheads over a 2018 decision by South Korea's Supreme Court that ordered Nippon Steel to pay compensation for forced labor during World War II. Japan argues the ruling violates international law because the issue was settled under a 1965 treaty.

Another ruling by a South Korean lower court last year allowed for the seizure of Nippon Steel assets and from midnight on Tuesday, the court has gained the right to start procedures to auction off the Japanese firm's shares in a Korea-based venture with steel-maker POSCO.

Japan's Deputy Prime Minister Taro Aso said on Tuesday that Tokyo would have to respond if the assets were seized but did not elaborate on what measures might be taken.

"If the assets were confiscated … we would have no choice but to respond, so we must avoid that from happening," he told a regular news briefing.

In a move widely seen as retaliation for the 2018 ruling, Japan last year said it would stop preferential treatment for shipments to South Korea of three key high-tech materials whose production it dominates and which are used by firms such as Samsung Electronics.

The move resulted in much anxiety at South Korean companies and Seoul has filed a complaint with the World Trade Organization.

Export curbs remain in place for two of the three materials－hydrogen fluoride which is used as an etching gas in chipmaking and fluorinated polyimides which are used in smartphone displays. Exporters now need to gain permission for each shipment, which takes around 90 days.

The World Trade Organization last month set up a panel to rule on the complaint.

Kim In-chul, a spokesman for South Korea's foreign ministry, said on Tuesday he hoped Japan would "more actively and sincerely" respond to ongoing diplomatic efforts to resolve tensions over the court ruling.

Nippon Steel was ordered to pay 100 million won ($83,800) each to four South Koreans as compensation.

Its shares in the joint venture, called PNR, an affiliated company of POSCO, are worth about 400 million won at face value.

Procedurally, it could take several months before a sale is completed, a South Korean official said.

If Japan takes retaliatory steps, South Korea might respond by terminating a bilateral intelligence-sharing pact called the General Security of Military Information Agreement, said Chang Ho-jin, a former South Korean presidential secretary on foreign policy.

South Korea had flagged it was going to end the pact last year, but in November reversed that decision.

Agencies Via Xinhua