Court Orders Public Notice of Asset Seizure Decision Against Japanese War Criminal Company... Signal for Sale of Domestic Assets

Effective August 4... Diplomatic Tensions with Japan Expected to Escalate

[Image source=Yonhap News]

[Asia Economy Reporter Choi Seok-jin] The court has decided to serve the domestic asset seizure order of a Japanese war criminal company by public notice. This is the first time that a public notice decision has been made regarding the asset sale procedure of a Japanese company.

This measure was taken because the Japanese government received the court's decision that domestic assets were seized to secure compensation claims of forced labor victims but did not deliver it to the relevant company.

With this court measure, the possibility of selling the domestic assets of the Japanese war criminal company has increased, but diplomatic friction with Japan is expected to intensify further.

According to the court on the 4th, the Pohang branch of Daegu District Court decided on August 1 to serve the seizure order decision for PNR by public notice. PNR is a joint venture between POSCO and Nippon Steel (formerly Shin Nippon Steel).

Public notice service is a system where if the address of the litigation opponent is unknown or they refuse to accept documents and do not respond to the trial, the content is posted on the court bulletin board or official gazette and is considered delivered. According to the court decision, the effect of service will take place on August 4.

This seizure case was filed by the plaintiff side after the Supreme Court's full bench ruling in October 2018 ordered Shin Nippon Steel to compensate forced labor victims 100 million won each.

Based on the compensation claims of five forced labor victims, 194,794 shares of PNR were seized twice in January and March this year. The value of the seized shares is about 973 million won based on the face value of 5,000 won.

The court began the procedure to serve this decision to Nippon Steel, but last year the Japanese Ministry of Foreign Affairs received the overseas service request but returned the related documents without any explanation.

The court proceeded with the service procedure again, but the Japanese Ministry of Foreign Affairs has not responded for 10 months.

Accordingly, the legal representatives requested the court to decide on public notice service, arguing that the Japanese Ministry of Foreign Affairs' actions violated the Hague Service Convention.

A court official said, “According to the public notice service, the seizure will take effect on August 4, but a separate procedure is required to liquidate the seized shares.”

He added, “In the case of real estate, usually a collection or full order is issued along with the seizure order, but in the case of shares, a sale order must be issued as a special liquidation procedure. Also, it is unknown whether the court will order the sale or transfer of the shares.”

The Hague Convention stipulates that service can be refused only if it is judged to infringe on the sovereignty or security of the country.

The legal representatives stated, “Although it is regrettable that the decision was made one year and five months after the share seizure order was issued, we welcome the court's decision.”

They added, “We hope that the ongoing appraisal procedure of PNR shares will proceed swiftly.”

This content was produced with the assistance of AI translation services.