Regarding the Decision by the Supreme Court of the Republic of Korea, Confirming the Existing Judgments on the Japanese Company
(Statement by Foreign Minister Taro Kono)

October 30, 2018
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    1. Japan and the Republic of Korea have built a close, friendly and cooperative relationship based on the Treaty on Basic Relations between Japan and the Republic of Korea and other relevant agreements that the two countries concluded when they normalized their relationship in 1965. The Agreement on the Settlement of Problems concerning Property and Claims and on Economic Co-operation between Japan and the Republic of Korea (hereinafter referred to as “the Agreement”), which is the core of these agreements, stipulates that Japan shall supply to the Republic of Korea 300 million USD in grants and extend loans up to 200 million USD (Article I), and that problems concerning property, rights and interests of the two Contracting Parties and their nationals (including juridical persons) as well as concerning claims between the Contracting Parties and their nationals are “settled completely and finally,” and no contention shall be made thereof (Article II). As such, the Agreement has provided the basis for the bilateral relationship up until now.

    2. In spite of the above, today on October 30, the Supreme Court of the Republic of Korea decided to confirm the previously existing Korean judgments as final, which ordered Nippon Steel & Sumitomo Metal Corporation, inter alia, to pay compensation to the plaintiffs. This decision is extremely regrettable and totally unacceptable. This decision clearly violates Article II of the Agreement and inflicts unjustifiable damages and costs on the said Japanese company. Above all, the decision completely overthrows the legal foundation of the friendly and cooperative relationship that Japan and the Republic of Korea have developed since the normalization of diplomatic relations in 1965.

    3. Japan once again conveys to the Republic of Korea its position as elaborated above, and strongly demands that the Republic of Korea take appropriate measures, including immediate actions to remedy such breach of international law.

    4. Furthermore, if appropriate measures are not taken immediately, Japan will examine all possible options, including international adjudication, and take resolute actions accordingly from the standpoint of, inter alia, protecting the legitimate business activities by Japanese companies. As part of such effort, in order for the Ministry of Foreign Affairs to fully address this matter, today, the Ministry of Foreign Affairs has established the Division for Issues Related to Claims between Japan and the Republic of Korea in the Asian and Oceanian Affairs Bureau.

    (Reference) Agreement on the Settlement of Problem Concerning Property and Claim and on the Economic Co-operation between Japan and the Republic of Korea (excerpt)

    Article II

    1. The Contracting Parties confirm that problem concerning property, rights, and interests of the two Contracting Parties and their nationals (including juridical persons) and concerning claims between the Contracting Parties and their nationals, including those provided for in Article IV, paragraph (a) of the Treaty of Peace with Japan signed at the city of San Francisco on September 8, 1951, is settled completely and finally.

    ・・・

    3. Subject to the provisions of paragraph 2 above, no contention shall be made with respect to the measures on property, rights and interests of either Contracting Party and its nationals which are within the jurisdiction of the other Contracting Party on the date of the signing of the present Agreement, or with respect to any claims of either Contracting Party and its nationals against the other Contracting Party and its nationals arising from the causes which occurred on or before the said date.