SEOUL, Oct 30 (Reuters) - South Korea’s top court is due to rule on Tuesday on a damages lawsuit against a Japanese company filed by South Koreans forced into labour during Japan’s 1910-45 occupation, a decision that could unsettle ties between the uneasy neighbours.
Japan and South Korea share a bitter history that includes Japan’s 35-year occupation of the peninsula and the use of comfort women, Japan’s euphemism for women - many of them Korean - forced to work in its wartime brothels.
Four former labourers initiated a suit in 2005 against Nippon Steel & Sumitomo Metal Corp., seeking compensation and unpaid wages.
Previous cases they had brought in Japan were dismissed on the grounds that their right to reparation was terminated by a 1965 treaty normalising diplomatic ties.
But in 2012, South Korea’s Supreme Court ruled that the company should compensate the plaintiffs.
The company has appealed a 2013 order that it pay 100 million won ($87,900) to each of the four.
The Supreme Court is expected to uphold its 2012 ruling and that could bring repercussions for relations between the countries.
“We might have to brace for not only a diplomatic crisis but a pull-out of some Japanese firms and a fall in new investment,” said Shin Beom-chul, a senior fellow at Asan Institute for Policy Studies in Seoul.
Japan’s foreign ministry said the issue of compensation was “settled completely and finally” by the 1965 deal.
A spokesman at Nippon Steel told Reuters: “We believe the court will rule in our favour.”
If the court upholds the order that the company pays compensation, the former labourers could request a seizure of Nippon Steel’s property in South Korea, which could lead to an international arbitration, said Jin Chang-soo, president of the Sejong Institute think-tank.
South Korea’s foreign ministry said in 2016 any seizure of company assets could drive relations into an “irreversible catastrophe”.
“It’s possible that the case will escalate, stoke anti-Japanese sentiment here and spill over into other areas including security at a time when we need to closely work with Japan to resolve the North Korean nuclear issue,” Jin said. (Reporting by Hyonhee Shin Additional reporting by Jeongmin Kim in SEOUL, and Linda Sieg and Yuka Obayashi in TOKYO Editing by Robert Birsel)