South Korean court verdict allows seizure and sale of Nippon Steel’s assets sparking diplomatic tensions

On Tuesday, in a significant development which could potentially strain Japan-South Korean relation, Nippon Steel Corp stated it will appeal a South Korean court ruling which allows the seizure and sale of the company’s assets in compensation for forced wartime labor.

In 2018, South Korea’s Supreme Court had ruled that Nippon Steel should pay $83,836.35 (100 million won) to each of the four South Koreans, as compensation for forced labor during World War II.

In 2019, a lower court had approved the part seizure of Nippon Steel’s domestic assets. According to a news report by Yonhap News Agency, in June the Daegu District Court had set a Tuesday deadline for the process to begin.

“We will continue to take appropriate measures based on the diplomatic negotiations between the two nations and other situations,” said Nippon Steel’s spokeswoman. “We will immediately make an appeal against procedures for seizure of assets which took effect at midnight on Aug. 4.”

According to Yonhap, at stake are 81,075 shares of Nippon Steel in a company called PNR, which is a joint venture between Nippon and South Koren steelmaker POSCO; the shares have a face value of 400 million won.

Nippon Steel has until the end of Sunday to file an appeal before the court, said Yonhap.

Japan has held that all matters concerning wartime reparations must be settled under a 1965 treaty that normalized relations between the countries.

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