Sale of Nippon Steel Assets in S. Korea deferred

March 26, 2019

Seoul--South Korean plaintiffs in a wartime labor lawsuit against Nippon Steel & Sumitomo Metal Corp. <5401> said Tuesday that they will defer the filing for a court order to sell seized assets of the Japanese company for cash.

In a statement, the plaintiffs also said that they have additionally seized assets held by the Japanese steelmaker in South Korea.

While putting off the procedures for the asset sales, they again urged Nippon Steel to hold talks on compensation for the plaintiffs who were requisitioned to work for the Japanese firm during World War II, based on a South Korean top court ruling late last October that ordered the company to pay damages.

Meanwhile, the plaintiffs criticized the Japanese government for showing its intention to take retaliatory measures, claiming that such a move would amount to unfair intervention in judicial affairs in South Korea and violate victims' rights.

They also warned of the possibility of bringing up the issue to the international community, including through the United Nations.

The seized assets are Nippon Steel's holdings of shares in Posco-Nippon Steel RHF Joint Venture Co. (PNR), a joint company set up by the Japanese firm and South Korean steelmaker Posco.

Lawyers for the plaintiffs visited Nippon Steel's headquarters in Tokyo on Feb. 15. As the company declined to respond to the lawyers, they expressed an intention to start procedures to convert the seized assets into cash at an early date.

With the start of the procedures likely to trigger retaliatory measures by Japan, however, the plaintiffs apparently decided to refine their plan.

In the statement, the plaintiffs said they have filed an application with Seoul Central District Court for the disclosure of Nippon Steel's assets in South Korea. Following the filing, the court may order Nippon Steel to unveil details of its assets within a certain period.

If Nippon Steel fails to respond to the order without any fair reason, the firm will likely face disadvantages, such as being added to a list of entities that have defaulted on their obligations, the plaintiffs said.

According to the statement, the seizure of Nachi-Fujikoshi Corp.'s <6474> holdings of shares in the Japanese machine tool maker's joint venture with a South Korean firm has been approved by a South Korean court in separate wartime labor compensation lawsuits although the cases are still ongoing at court.

It is the first time that an asset seizure has been approved in South Korea before a final court ruling is issued in a wartime labor lawsuit filed against a Japanese firm. A filing for a court order for the sale of the Nachi-Fujikoshi assets will also be deferred for the time being.

Besides Nippon Steel and Nachi-Fujikoshi, Mitsubishi Heavy Industries Ltd. <7011> has faced a South Korean court decision to approve plaintiffs' request for a seizure of assets it holds in South Korea over wartime labor. Jiji Press