CHINA VS JAPAN: MORE LAWSUITS

The seizure of a Japanese cargo ship by a Chinese court over compensation claims relating to the second world war could potentially expose Japanese companies to hundreds of millions of dollars in liability, although the lapse of time and the deaths of elderly plaintiffs would make pursuing such cases difficult.

In February, a Chinese court for the first time accepted a law suit brought by 40 former forced labourers against Mitsubishi Materials Co and Nippon Coke & Engineering Co, claiming damages of around $40m. A series of related cases marks a breakthrough for activists, forced for years to seek redress in Japan as Chinese courts refused to hear their cases.

At the weekend, the Shanghai Maritime Court ordered the seizure of Japanese-flagged ore carrier Baosteel Emotion at a deepwater port near the city, after negotiations stalled between Mitsui OSK, which owns the ship, and plaintiffs in a case first opened in 1990.

The court had previously awarded the claimants Y2.9bn in damages against Mitsui, which said it was surprised by the action.

China's new openness to lawsuits brought by private individuals against Japanese companies comes as tension simmers between the two countries. Attitudes are hardening as Tokyo and Beijing spar over disputed gas-rich waters in the East China Sea, and as China seeks to reassert its economic and political weight throughout Asia.

"In the past, the Chinese government was not very supportive of the civil law suits filed against Japanese entities because they wanted to maintain a sort of diplomatic consistency," said Zhou Weihong of the Beijing Centre for Japanese Studies. "Now given the Japanese government, especially the Abe administration's attitude towards history, the Chinese government has gradually given up the policies in the past and begun to offer a certain degree of convenience for individuals filing court cases."

Tokyo said the ship seizure could have a "chilling effect" on Japanese business in China, while the Chinese foreign ministry played it down as a "commercial" dispute. On Tuesday Japan's prime minister Shinzo Abe described the incident as "regrettable". He said: "Mitsui was negotiating with the plaintiffs to try and find a settlement, so it is regrettable that the ship was suddenly seized. We have communicated our regret to China through diplomatic channels and are strongly demanding appropriate action."

For Japanese companies, a new willingness by China and South Korea to hear forced labour cases could present a greater threat than cases like Mitsui's, which involved a lease deal between two shipping companies that was interrupted by the war.

Chinese lawyers seeking compensation for wartime labourers who say 38,939 Chinese were sent to Japan to replace Japanese workers drafted into the military. Some 6,830 Chinese died there due to harsh working conditions.

If the Beijing court agrees to hear the forced labour suit against Mitsubishi and Nippon Coke as a class action case, there could be 9,000 plaintiffs, each seeking $1m and an apology, said Kang Jian, a lawyer who has worked on forced labour issues since 1996. A list of names compiled by Japan in 1946 has helped identify the plaintiffs, while it has been much harder to prove which Chinese might have been forced to work in Japanese factories and mines on mainland China.

Activists in China are relying on research by Koreans pursuing similar cases to show that modern Japanese conglomerates are heirs to the assets and business of companies operating before and during the war.

"We are a Japan-based company and want to respond carefully based on Japanese law," said a spokesman for Nippon Coke, who said the company had received no legal notification. Mitsubishi told Japanese media it would deal with the legal consequences if and when they arise.

Last July Korean courts awarded damages in two landmark cases brought by the families of men forced to work in Japan. Nippon Steel and Sumitomo Metals were ordered to pay Won100m ($88,000) to each of four plaintiffs, after Korea's Supreme Court ruled that a 1965 treaty that settled compensation claims did not rule out claims from individual citizens. Mitsubishi Heavy Industries was ordered to pay $71,800 to each of five plaintiffs, all of whom were deceased.

China absolved Japan of any claims in a 1972 communique that normalised relations and allowed Japanese investment and development aid to flow into China.

The inability to sue the Japanese state has frustrated advocates for China's remaining comfort women, a euphemism for women forced into sexual slavery by the Japanese military.

It is unlikely that any regional government would want to throw open its courts entirely to extremely complicated and overlapping claims. For instance, factories built by Japanese in occupied Manchuria were dismantled and hauled off by victorious Russian armies after the war. A French-built railway through Yunnan was seized by the Japanese, nationalised by China and bombed during a Chinese-Vietnamese border clash.

China's ruling Communist Party nationalised businesses and factories belonging to Chinese capitalists, most of whom were either killed or fled when the Communists won the civil war. Farmers and small business owners across China lost land and shops, often in return for worthless shares in newly-formed collectives. Some homes, churches or mosques were restored to their original owners or congregations in the 1980s and 1990s, when the Communist party once again allowed private property and distanced itself from three decades of radical leftist policies.

And even if Korean and Chinese courts are no longer as hostile to their cases, advocates can do little to fight against time.

Former forced labourers are in their 90s now and their numbers are dwindling. Cui Shuping said her father was an errand runner for the local government in Hebei Province when he was sent to work for Mitsubishi in Japan. Her family filed their first case in Fukuoka in 2003.

"My father has passed away. He used to take on the case himself. Now he is gone, he passed all materials on to us," she told the FT. "When my generation is gone, perhaps we will hand it over to the next generation."

ft.com