Company pays $28.5m in delayed rent and losses to Chinese firm

A maritime court in Shanghai released a Japanese ship on Thursday after its owner paid 2.92 billion Japanese yen ($28.5 million) in delayed rent and losses to a Chinese firm.

The ship Baosteel Emotion, owned by Japanese shipping firm Mitsui OSK Lines, was seized on Saturday at a port in Zhejiang province.

The Shanghai Maritime Court Thursday said Mitsui OSK Lines has fulfilled the obligations in a legally effective verdict in a civil case and paid 2.92 billion Japanese yen in delayed rent and losses.

The court handed down a ruling at 8:30 am ordering a lift on the ship's detention.

The Japanese shipping firm also paid 2.4 million yuan ($384,000) in court fees.

The Japanese shipping firm was sued in 1988 over alleged delays in rent payments for two ships and economic losses dating back to the 1930s.

The maritime court ruled in 2007 that it should compensate the Chinese firm 2.9 billion Japanese yen. The Shanghai Municipal Higher People's Court delivered a final verdict in 2010 that defended the 2007 judgment.

China's seizure of the Japanese ship was solely for delayed rent and losses owed to a Chinese firm, Foreign Ministry spokesman Qin Gang said on Monday at a daily news conference.

"As a commercial lawsuit, the enforcement of the verdict was carried out at the request of the plaintiff. It is unrelated to wartime compensation," he said.

But the case had political overtones given the uneasy ties between the two Asian neighbors, strained by a dispute over China's Diaoyu Islands, and Japan's failure to make amends for atrocities committed during World War II.

The Japanese company said the released ship departed a Chinese port on Thursday afternoon, but warned the incident could have a "negative impact" on its business activities in China.

Japan had lodged a formal diplomatic protest over the seizure and warned it could "intimidate Japanese companies doing business in China".

Tokyo believes that the seizure undermined a 1972 joint communique that normalized ties between Japan and China, in which Beijing agreed to renounce any demands for war reparations.

China has insisted that the case was a commercial matter, and Qin said that the dispute was handled under the law.

"A Chinese court has given a ruling in accordance with law, and Mitsui OSK has also paid compensation in accordance with the ruling of the Chinese court," he said.

"Therefore, the case has been handled."

Dispute in 1936

Mitsui's predecessor chartered two ships from a company called Chung Wei Steamship Co, now referred to as Zhongwei, in 1936.

The ships were reportedly commandeered by the Imperial Japanese Navy and were sunk during World War II, media reports said.

A compensation suit was later brought against Mitsui by the descendants of the founder of the Chinese company, and in 2007 a Shanghai court ordered Mitsui to pay compensation.

Mitsui said in a statement on Monday that it had been seeking an out-of-court settlement after China's Supreme People's Court rejected its appeal against the judgment in 2011, but the vessel was "suddenly" impounded.

A Chinese academic defended the court's move, saying the seizure was legal despite the time elapsed since the original suit was filed in 1988.

"The ruling made by Shanghai Maritime Court is indisputable," said Lu Ming, a professor at the Shanghai University of International Business and Economics who specializes in maritime law.

"After being accepted in 1988, this case was always being handled by the court," she said.

Xinhua-AFP