Nippon Steel to Appeal Korean Seizure Order

Nippon Steel is appealing a Korean court order to seize its assets in a joint venture here after it refused to compensate wartime victims of forced labor.

The Japanese giant has until next Tuesday to file the appeal.

The seizure, effective Tuesday, allows the victims to seize and sell Nippon Steel's shares in a joint venture with POSCO, but Nippon Steel said "issues related to the compensation for forced labor have been completely and definitively resolved under the "Korea-Japan Treaty" of 1965.

The appeal will buy Nippon Steel time before the 81,075 shares in POSCO-Nippon Steel RFH (PNR) are sold off to make up for its refusal to comply with an earlier court order to compensate the victims. It could take anywhere from months to years for a court to decide on the appeal.

Senior Japanese officials slammed the Korean government over the order and threatened retaliatory steps should the asset seizure go ahead.

Japanese Foreign Minister Taro Aso said his government "could not help but take suitable response measures." But export restrictions targeting Korea last year ended up backfiring by damaging Japanese exporters rather than their Korean customers and boosted President Moon Jae-in's approval ratings.

Korean Foreign Ministry spokesman Kim In-chul on Tuesday responded by reiterating a threat Korea made at the height of the spat, telling reporters that the Korean government could choose to end a military intelligence-sharing pact with Japan "any time."

The Japanese government as well as Nippon Steel argue that the 1965 treaty settles all compensation claims for one-off lump-sum reparations, but the Supreme Court here last year ruled that a bilateral accord between governments cannot override individual victims' rights.