Nippon Steel and Sumitomo Metal chairman and CEO Shoji Muneoka (right) and president Hiroshi Tomono unveil the company's plaque in Tokyo on Oct 1, 2012. (YOSHIKAZU TSUNO / AFP)

SEOUL - Nippon Steel Corp has filed an appeal against a South Korean court decision last year that would allow for a seizure of its assets to compensate laborers forced to work during World War II, a court official said on Friday.

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The potential seizure stems from a 2018 ruling by South Korea’s Supreme Court ordering the steelmaker to compensate four plaintiffs - a ruling that has triggered diplomatic tension and trade friction between the Asian neighbors.

Japan argues the ruling violates international law because all claims for compensation arising from Japan’s 1910-1945 colonization were settled under their 1965 diplomatic treaty

Japan argues the ruling violates international law because all claims for compensation arising from Japan’s 1910-1945 colonization were settled under their 1965 diplomatic treaty. It warned on Tuesday it would have to respond if the assets were seized.

The South Korean government says the ruling must be respected as a decision by an independent judiciary.

In a move widely seen as retaliation for the 2018 ruling, Japan last year said it would stop preferential treatment for shipments to South Korea of some key high-tech materials whose production it dominates and which are used by firms such as Samsung Electronics Co.

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Talks to resolve the export curbs have stalled and South Korea is proceeding with a complaint to the World Trade Organization.

Nippon Steel was ordered to pay 100 million won (US$84,150) each to four South Koreans as compensation. Its shares in the joint venture with Korean steelmaker POSCO, called PNR, have been targeted for seizure and are worth about 400 million won at face value.

The appeal by Nippon Steel was filed with the District Court in Daegu, a court official said.