Japanese Prime Minister Shinzo Abe. Picture: REUTERS
Japanese Prime Minister Shinzo Abe. Picture: REUTERS

Tokyo — Japan says it wants to bring a bitter dispute with South Korea over compensation for wartime labourers to a panel for arbitration.

Relations between the two US allies have been increasingly strained after South Korea’s top court in 2018 ordered a Japanese steelmaker to pay compensation to victims of a wartime policy of forced labour.

The ruling drew the ire of Tokyo, with Prime Minister Shinzo Abe describing the decision as “impossible”.

On Monday, Japan said it wants the issue referred to an arbitration panel, under the terms of an agreement signed by the two countries in 1965.

“The Japanese government has communicated to the South Korean side that we will refer the matter to arbitration,” the foreign ministry said.

“The South Korean government has an obligation under the agreement on the settlement of problems, and the Japanese government strongly demands South Korea accept arbitration, it said.

Under the terms of the treaty, each country names one representative to the panel, and those two members jointly select an additional member from a third country.

The treaty was signed alongside a main agreement that normalised relations between the two countries in 1965.

South Korea’s foreign ministry said it would review the request. “The government will prudently look into it, factoring in all related elements concerning the move by the Japanese side,” it said.

Japan and South Korea are both democracies, market economies and US allies, but their relationship has been strained for decades as a result of Tokyo’s brutal 1910-1945 colonial rule over the Korean peninsula.

Japan argues that compensation issues related to the wartime labour policy were settled by the treaty that normalised relations, which included a reparations package of grants and cheap loans. However, similar court rulings by South Korean courts have followed the top court decision in 2018.