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A Tale of Two Courts: Japan and South Korea

SNA (Tokyo) — Perhaps the law is a subject better left to lawyers and courts, but the reality is that the law often collides with international politics as well, so it can never be completely ignored.

We couldn’t help but notice that there were two court cases this month in which a judge in a foreign nation made some claim upon Japan, but that the domestic reaction was entirely different. One case involved a court in the United States and the other a court in South Korea. In one case, the Japan jumped to obey the orders of a faraway court and in the other case a government spokesman quickly dismissed the foreign court with a contemptuous wave of the hand. Need it even be said which was which?

On May 16th, a New York District Court judge sent an order to Japan’s largest bank, the Bank of Tokyo-Mitsubishi UFJ, ordering them to freeze all Iranian assets that they hold. Amazingly, the Japanese bank immediately complied with this order, even though it was likely to have a major impact on the Japanese nation’s ability to import Iranian oil.

Moreover, the judge’s order was in connection with a case that, in our opinion, is a legal farce to begin with—a 2007 judgment awarding billions in financial compensation from Iran to the families of US soldiers killed in a 1983 attack by Hezbollah in Lebanon.

When we heard the news about the Bank of Tokyo-Mitsubishi UFJ, we wondered how on earth it was that some district court judge on the other side of the planet had such profound power over Japan’s largest private financial institution. If a local judge in, say, China or Thailand or the Philippines orders a Japanese bank to freeze all the accounts related to a nation they didn’t like, would the obedience to the order be so rapid and profound?

While courts certainly must have the right to give orders to their own governments and businesses, does the New York District Court really have authority over another sovereign nation? If it does have such authority, then why not a Chinese court too?

We were therefore gratified to hear that METI Minister Yukio Edano, a qualified lawyer whose portfolio includes oil imports to Japan, had a very similar reaction to ours. “From what I know of legal matters,” Edano told reporters, “it is clearly strange that the orders of an American court should extend beyond the regions where it holds sovereignty… I find this matter to be incomprehensible.”

Financial Services Minister Shozaburo Jimi, however, whose mandate includes regulation of Japanese banks, refused to make any substantial comment when he was asked about the matter.

As for the Bank of Tokyo-Mitsubishi UFJ, in spite of the implied criticism they had received from METI Minister Edano, they continued to scrupulously obey the New York District Court until the freeze order was eventually lifted last Friday by a US federal court.

So whether it had legal force or not, Japan allowed extraterritorial authority to a humble district court judge in regard to a farcical legal action against Iran.

We didn’t have to wait long to find out the answer to our rhetorical question about what Japan would do if a court in a nation other than the United States made a judgment affecting a Japanese domestic enterprise. Last Thursday, the Supreme Court of South Korea ruled that Mitsubishi Heavy Industries and Nippon Steel are liable to pay its former forced laborers back pay and compensation for their suffering during the colonial period, 1905-1945. According to the South Korean Supreme Court’s verdict, the refusal of Japanese courts to grant compensation to forced laborers “goes against the core values of Korea’s Constitution” because these prior judgments have tacitly accepted that Japanese rule of the Korean Peninsula was legitimate. The Supreme Court also ruled that the 1965 bilateral treaty’s scope was to settle “properties” and “claims” between the two nations, but that the former forced laborers’ demand for compensation was not a settled matter.

If anything, this is a far graver court judgment than the previous one. This ruling comes from another nation’s Supreme Court, not a local district court. It is based, in our opinion, on a much more serious historical matter and a better grounded sense of law than the New York case. Furthermore, the financial aspects of the Korea forced laborer case present a much smaller burden than the potential damage that may have accrued to Japan from freezing the bank accounts of a major energy supplier.

Nevertheless, when Chief Cabinet Secretary Osamu Fujimura was asked about the Supreme Court judgment on Friday morning, he stated, “In regard to property claims between Japan and South Korea, the position of our country is that, based on the Japan-South Korea property claims agreement, this issue is already completely resolved.” But what does he think about the judgment? “Since this was a verdict reached in another country’s court, I have no comment.”

Jung Nam-Ku, the Tokyo correspondent of The Hankyoreh newspaper, sampled the reaction in Japan by citing the relevant articles from the Asahi Shinbun and the Sankei Shinbun, and then added: “Many messages critical of the ruling were posted on online message boards such as 2channel, painting a clear picture of the gulf in perspectives between the South Korean and Japanese sides. ‘We don’t need to obey another country’s court ruling,’ said one, while another asked whether South Korea ‘wants to abandon the Korea-Japan Basic Treaty and sever diplomatic ties.’”

For those paying attention to both cases (and that’s probably only us), the ironies were there to be savored. Where was this appeal to the limits of judicial authority in the farcical New York case? Why was there a total absence of nationalist ire when an American district court judge put a Japan already suffering a major energy crisis in even more danger by threatening its national oil supplies?

To put the most positive spin possible on the New York case and the Bank of Tokyo-Mitsubishi UFJ’s quick obedience to the judge, one could say that it was performed as an act to show deference to a friend and an ally. Maybe the bank wasn’t strictly required to obey the judge’s order, but it was a gesture of sincerity and kindness to the United States. It was a matter of taking the broader view.

And it is precisely this flexibility — this broader view — that is so starkly absent when Japan deals with South Korea or, for that matter, any of its East Asian neighbors. There is only the stiff back and the cold legality.

A broader view aiming to consolidate a genuine friendship between Japan and South Korea might note, for example, that the 1965 treaty was signed at a time when Seoul was governed by a military dictatorship that suppressed popular opinion in order to fight the Cold War. Now that South Korea has blossomed into a vibrant democratic society, it is only natural that much that had previously been repressed has now come out into the open. Yes, Japan can take the narrow legal view that the South Korean military dictatorship signed away all future claims in 1965, but what does such a stance do in terms of building any genuine affection between the two peoples?

Conversely, if Tokyo acted with even half of the flexibility and generosity of spirit toward Seoul as it does toward Washington, how quickly would bilateral friction between the two neighbors evaporate into thin air?

From a realpolitik strategic point of view, aren’t Japan and South Korea natural allies in East Asia? Couldn’t Japan benefit from having a nearby friend?

What continues to divide these two nations most of all, in our view, boils down to racism: Japanese conservatives feel a sense of ethnic and cultural superiority toward Koreans; and the proud Koreans know it and it drives them nuts, especially since it comes on top of a modern history in which they spent forty years under the iron fist of the Japanese Imperial Army.

In sum, until a Japanese government decides to seriously pursue a friendship with their Korean neighbors, it’s simply not going to happen. The recent collapse of negotiations towards the first bilateral military agreement is an example of how public sentiment still drives them apart. But if the Japanese can find it in their hearts to change their basic attitude, the real obstacles to a friendship are few indeed.