Have China’s courts cleared the way for Japan reparation claims?
Share this on

Have China’s courts cleared the way for Japan reparation claims?

If icy winter winds failed to cool down tensions between China and Japan, the warmth of spring is not doing much either. On Saturday, April 19, two possibly eventful developments took place, promising to bring yet more controversies to the marred relationship between the two East Asian powers.

On that day Japanese authorities unveiled a plan to build a radar on Yonaguni Island, in what Defense Minister Itsunori Onodera said is the first deployment since the US returned Okinawa to Japan in 1972.   The decision made by Abe’s government – which also appears inclined to amend Japan’s Pacifist Constitution in order to put the country on an equal military footing with its international peers – comes at a time when tensions with neighboring, fast growing and increasingly assertive China are running high.

It is easy to predict a negative response from Beijing on any Japanese deployment, anywhere, but the positioning of the radar is telling about its future use: Yonaguni is located only 150km from the Diaoyu/Senkaku Islands, which are at the center of a harsh territorial dispute between China and Japan. The very words of Mr Onodera leave little room for doubt: “I want to build an operation able to properly defend islands that are part of Japan’s territory.”

It is an interesting coincidence that on the same day a Chinese Court in Shanghai seized Baosteel Emotion, a vessel operated by TOKYO-Mitsui O.S.K. Lines, in a case connected with facts dating back to almost eight decades ago. The details of the case are worth exploring. If we are to believe Mitsui, the story which is making headlines today began in 1936, when Daido Kaiun – which in 1999 became part of Mitsui after a merger – chartered two vessels from Chung Wei Steamship Co. They were successively expropriated and lost at sea by the Japanese imperial government.

In 1964, the heir of Chung Wei brought a plea for arbitration to the Tokyo Summary Court and in 1970 the plaintiff filed a case to the same institution, to no avail in both cases. The company then brought a suit for damages and reparations for non-fulfillment of financial obligations to the Shanghai Maritime Court in 1988. The court took 19 years to respond, and in 2007 finally ordered Mitsui to pay the plaintiff 2.92 billion Yen. The Japanese company disagreed and appealed to the Shanghai Municipal Higher People’s Court – which upheld the previous verdict – and then to the Supreme Court of the People’s Republic of China, which refused the motion in 2011.

On Thursday, a Chinese court agreed to release the Baosteel Emotion after Mitsui paid out $28 million.

What makes the case so important – and controversial – is that this is the first time a claim for wartime compensation has led to a verdict. The 1972 Joint Communiqué – which established diplomatic relations between China and Japan after the Second World War and is the basic reference in this matter – states that “the Government of the People’s Republic of China declares that in the interest of the friendship between the Chinese and the Japanese peoples, it renounces its demand for war reparation from Japan.” So far, Chinese courts had stuck to the agreement and never accepted reparation claims.

Earlier this year, however, former Chinese forced laborers filed a lawsuit against Mitsubishi Materials and Nippon Coke & Engineering, and, for the first time, the law suit was accepted, signaling that things may be about to change. The seizure of Baosteel is reinforcing such a feeling, reportedly emboldening activists and sending chills down the spines of Japanese businessmen. Tong Zeng, a leading Chinese activist in the field of wartime compensation, told Reuters that these developments are “just the beginning,” and added that “certainly many victims will take up legal weapons.”

The position of the Chinese government is – at least officially – far removed from that of activists. Beijing has stated that the case is not to be considered a reparation and the principles of the agreement are being respected. On Monday, Foreign Ministry Spokesman Qing Gang argued that the seizure is part of a commercial contract dispute, saying that “nothing has changed in the Chinese government’s position on adhering to, and defending every principle in, the Sino-Japanese Joint Statement.” But, aside from the obvious connection with the war, why would courts begin accepting similar cases only now? It is hard not to see deteriorating relations and the increasingly tense territorial dispute as factors underpinning these new developments.

Japan, for its part, has already lodged a protest and warned that the economic fallout could be costly if courts begin targeting Japanese companies. Chief Cabinet Secretary Yoshihide Suga reportedly said: “We have told the Chinese side through diplomatic channels that we regret its seizure of the vessel. We demand China take appropriate measures.” Mr Suga also stated that there could be negative consequences if companies investing in China feel intimidated.

Making the atmosphere even more tense, Japan’s Prime Minister Shinzo Abe sent a ritual offering  to the Yasukuni Shrine, a place of worship where the spirits of millions of war dead are enshrined, including those of 14 leaders convicted as war criminals. The initiative – as others in the past – did not fail in attracting the ire of China and South Korea, which reacted angrily to what they see as Japan’s unwillingness to repent for its actions in WWII.