Monday, April 21, 2014, 11:11
Japanese cargo ship held in legal dispute dating to 1930s
By Wu Yiyao in Shanghai

A Shanghai court placed a cargo ship of Japanese shipping giant Mitsui OSK Lines under custody on Saturday after the shipping company failed to comply with the court's ruling on the compensation for two Chinese ships that were rented in the 1930s and later sank.

Shanghai Maritime Court ruled to take the action against the ship Baosteel Emotion at the Majishan port in Zhejiang province. The ship arrived from Australia on Saturday.

The Chinese court ruled in 2007 that Mitsui OSK must pay more than 2.9 billion Japanese yen ($28 million) in compensation to a Chinese family over a wartime contract dispute, but the Japanese company failed to pay the compensation after many reminders and rounds of settlement talks.

According to a statement on the court's website, it will take further action if Mitsui OSK continues to ignore the ruling.

Chen Chun and Chen Zhen, grandsons of Chen Shutong, who founded Zhongwei Shipping Co, brought the case against Mitsui OSK to Shanghai Maritime Court in 1988. The case arose from a contract dispute over two ships between Zhongwei Shipping Co and Daido Shipping Co, which was purchased by Mitsui OSK.

Daido Shipping Co violated the contract it had signed with the Chens' shipping company in 1936, the Chen brothers told the court.

The Chen brothers said Daido had failed to return two ships it had rented from the Shanghai company after a one-year contract expired in 1937.

In 1940, Daido told Chen that the ships were "legally captured" and owned by the Japanese government.

In fact, one of the two ships sank near Japan in 1938 and the other one in the South China Sea in 1944 while the two countries were at war, according to a report in the newspaper China Youth Reference News.

After the war, the Chen family went to Japan many times, trying to get the rent and compensation, but they suffered many setbacks, including refusals to hear the case in Japanese courts, mostly on the grounds of lack of evidence of the "legal capture". The suit ended in 1974 because a Japanese court ruled that the time for the suit had expired.

The Chen family then initiated a lawsuit in China in 1988, one year after the country's General Principles of Civil Law took effect.

Hearings in the case began in 1991. After five hearings, the Shanghai Maritime Court ruled in 2007 that Mitsui OSK must pay the Chen brothers a total of about 2.92 billion Japanese yen in compensation.

Mitsui OSK appealed, but the Shanghai High People's Court upheld the ruling in 2010. China's Supreme People's Court rejected Mitsui OSK's request for a retrial.

Shanghai Maritime Court issued an enforcement notice to Mitsui OSK in December 2011. The two parties tried to negotiate a settlement but failed to reach an agreement.