When a government negotiates and signs a treaty, lay people have one simple question: how would it affect me? With a little bit of elaboration, the question then can be further divided into two different categories of retrospective queries and prospective ones.
A good example of a prospective query is whether I, as an individual, can refer to the treaty as a basis to bring a claim in domestic court on my own accord. This has been one of the key issues in the context of free trade agreement negotiations these days.
A good example of a question falling under the retrospective category, on the other hand, is whether the treaty at issue has settled the existing claims that I may have. This very issue lies at the core of the May 24 decision of the Korean Supreme Court, in which it examined the meaning and scope of the 1965 Korea-Japan Claims Settlement Agreement attached to the simultaneous Basic Relations Treaty.
In the 20-page decision, the nation’s highest court opined that the 1965 Claims Agreement cannot be interpreted as having settled all individual claims held by individual victims. It thus reversed the previous judgment of the Busan High Court and remanded the case back to the lower court for further deliberation in accordance with its May 24 decision.
Though a final disposition in the lower court is still to come, the official pronouncement of the highest court concerning the 1965 treaty is expected to have far-reaching implications particularly because this decision does not entirely dovetail with the existing position of the government. The highest court’s decision may incentivize other claimants to consider similar proceedings. Expectedly, the government offered a cautious response and commented that it would continue to carefully watch future proceedings at the lower court.
This decision of the Korean Supreme Court is exactly opposite of the 2007 decision of the Japanese Supreme Court over the same claim and the same issue. In the decision, the highest court of Japan concluded that all individual claims of Koreans were espoused by the Korean government and were settled, once and for all, by the 1965 agreement. In last week’s decision, the Korean Supreme Court offers a lengthy discussion on the 2007 decision of Japan and stated in no less unequivocal terms that it does not agree with the decision. Put another way, the highest courts of the two countries have now two contradictory interpretations of the same treaty provision.
The effect of the conflict will become more palpable when the plaintiffs try to enforce the judgment once they finally prevail in the lower court. In theory, the defendant Japanese corporation’s assets in Korea may be subject to the attachment application by the prevailing plaintiffs. Once (or before) the dispute reaches this stage, the two governments will have to find a resolution.
The Korea-Japan Claims Agreement sets forth a two-step process to deal with this kind of situation. Under Article 3 of the agreement, the two countries are obligated to settle the dispute through diplomatic channels, and if this attempt fails one of the parties can initiate an arbitration proceeding. A three-member arbitration tribunal will be composed within 60 days of initiation. After deliberation, this tribunal then issues a binding decision.
Obviously, the most appropriate way to break the stalemate would be to explore a diplomatic solution to this issue. If, however, the parallel positions of the two sides do not show any sign of flexibility, then the only remaining solution seems to be the arbitration process as stipulated in the treaty provision.
Of course, this route would not be stress-free or cost-free. By having a third party issue a binding decision on this politically and diplomatically sensitive issue, both sides would encounter immense domestic pressure throughout the proceeding. The burden for Korea would be no less onerous since Korea has not participated in any state-to-state arbitration of this sort.
Sadly, unless some area of convergence is found one way or another, this path appears to be the only remaining way to put a punctuation mark on this issue. Hopefully, the two countries will be able to come up with a wise solution to break the deadlock before the problem is further complicated.
By Lee Jae-min
Lee Jae-min is a professor of law at the School of Law, Hanyang University, in Seoul. Formerly he practiced law as an associate attorney with Willkie Farr & Gallagher LLP. ― Ed.