Mitsui O.S.K. Lines Ltd. paid a deposit of about ¥4 billion to secure the release of an ore carrier seized in China, sources said Thursday.

The ship was seized Saturday based on a Shanghai court ruling involving a dispute over compensation from a contract predating World War II.

The court’s move has renewed fears in Japan that the assets of other Japanese companies operating in China might be confiscated on the basis of wartime rulings in favor of Chinese plaintiffs.

Chinese authorities in Zhejiang province abruptly seized the Mitsui vessel Baosteel Emotion at a port, saying the trading house had failed to follow through on a court order to pay compensation over contractual obligations left unfulfilled by Mitsui’s predecessor, Daido Shipping Co.

Without divulging how much it paid, Mitsui said in a statement Thursday the containership had been released.

“MOL (Mitsui O.S.K. Lines) takes into account that the situation may result in obstacles to its services, which may result in a negative impact on MOL business activities in China. The company continued talks with the Shanghai Maritime Court and today the vessel was released to set sail,” Mitsui said.

Later in the day, Mitsui said the ship had left port.

There is concern that a precedent could be set that runs counter to the spirit of the 1972 joint statement that normalized China-Japan relations. In the statement, China renounced all individual claims for war reparations from Japan.

Recently, former Chinese forced laborers have filed a string of lawsuits in China demanding redress from Japanese corporations, apparently reflecting the intention of China’s new leadership, headed by President Xi Jinping, to take a harder stance toward Japan.

Chief Cabinet Secretary Yoshihide Suga said Thursday the Mitsui case should be treated as “extraordinary” because it was a court battle for many years.

Mitsui’s case dates to 1936, the year before the outbreak of the Second Sino-Japanese War, when Daido Shipping Co. leased two ships on a one-year contract from Chung Wei Steamship Co. After the war began, the ships were commandeered by the Imperial Japanese Navy and later were sunk. Grandsons of Chung Wei’s founder sued Mitsui in 1988, saying Mitsui should pay redress for unpaid contractual obligations. Mitsui has argued that because the ships Daido leased were requisitioned by the military, it is not liable.

In 2007, however, the court ordered Mitsui to pay ¥2.9 billion to the Chinese family.

Despite Mitsui’s efforts to settle the case with the plaintiffs, its vessel was suddenly impounded last weekend. Earlier this week, Suga protested Chinese authorities’ seizure of the Mitsui ship, saying it may shake the foundation of the 1972 statement.

“Impounding (Japanese firms’ property) abruptly could intimidate Japanese companies doing businesses in China. The Japanese government strongly appealed that to China,” Suga said in a daily news conference Thursday.

Daigo Hayashi, director of the international division at the Japan Chamber of Commerce and Industry, said this kind of action might alarm other Japanese firms that have done business in China since before the war.

But it is still unclear how this particular case will affect other compensation suits as the ¥4 billion that Mitsui paid was apparently a deposit, not damages.

Information from Kyodo added

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