China and the World

Ship comes in

Mitsui pays up as Japan tensions increase


For the sake of diplomacy

For the prime example of a multi-generational legal dispute, look no further than the classic novel Bleak House. “Jarndyce and Jarndyce drones on,” Charles Dickens wrote of the decades-long lawsuit. In fact, it has been litigated for so long almost no one can remember when it started; few in the novel harbour any hopes it will ever be settled.

The Chen family can lay claim to having pursued its own Jarndyce-like lawsuit in a case that dates back to 1936. It originated when the Shanghai tycoon Chen Shuntong leased two vessels to Daido Kaiun, a Japanese shipping line. Payments ceased once the Japanese navy commandeered the ships as part of preparations to invade China.

The Chens sought restitution after the war, but discovered in 1947 that one vessel had been torpedoed and the other had sunk in a typhoon. When damages were sought Daido Kaiun passed off responsibility, blaming the Japanese military. A long running legal case ensued, first in Tokyo and later in Shanghai.

Chen Chungwei, the great-grandson of the family’s patriarch, told the Financial Times: “My family encountered a lot of difficulties but we stuck with it. I grew up with this case. Our sense of responsibility to it was stronger than anything. It can’t be calculated how much we have spent on the case in money, time and our lives.”

Earlier this month the Shanghai Maritime Court gave the Chens hope of final resolution by impounding a Japanese vessel in the city and ruling that the family was owed billions of yen in compensation. The ship belonged to Mitsui OSK, which absorbed Daido Kaiun years ago. Last Thursday Mitsui paid ¥4 billion ($39 million) to free its ship, setting a significant precedent and vindicating the Chen family’s long legal battle.

The Chens claim that there has always been merit in the suit. But by the same token, that merit had been there for decades. So why did a Chinese court act so decisively now? The answer is probably politics. As relations worsen between Beijing and Tokyo – in large part over claims to contested islands in the East China Sea – it suits China to punish the Japanese for wartime wrongs.

Activists like Tong Zeng, chairman of the Chinese Association for Claiming Compensation from Japan, are now calling for more lawsuits, especially from those forced to work in Japan during the war. The Japanese say that this runs against an agreement in 1972 normalising diplomatic ties between the two countries to renounce demands for war reparations. Although Tong disputes the view, saying that the right to claim compensation has not been waived at the “private or individual level”, Chinese courts have stuck to the terms of the agreement and never accepted reparation claims.

But might that now be changing? The Foreign Ministry seemed to deny it last week, telling reporters that the case against Mitsui was a “regular business contract dispute” and not related to the issue of wartime compensation. But a Chinese court also set a new precedent in March by accepting a damages suit against Mitsubishi Materials and Nippon Coke & Engineering over forced labour. Zeng told Reuters that this was “just the beginning” and that “many victims will take up legal weapons”.

In any event, the reaction in Tokyo to the ship seizure was swift, with government spokesperson Yoshihide Suga warning of “a chilling effect on all Japanese companies doing business in China”.

The row comes in the same month that Barack Obama affirmed the US security pact with Japan covered the disputed islands, provoking a stern response from Chinese foreign ministry spokesman Qin Gang. “The so-called security alliance between the US and Japan is a bilateral arrangement made during the cold war period and it should not be used to damage China’s sovereignty and legitimate interests,” Qin argued. “We firmly oppose applying the Japan-US security treaty in the issue of the Diaoyu Islands.”

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