Japan on Monday called for the setting up of an arbitration board over compensation issues involving wartime Korean laborers, claiming South Korea has violated a 1965 bilateral pact that was designed to settle all such issues involving Japan’s 1910-1945 colonial rule over the Korean Peninsula.

Japan made the request based on Article 3 of the pact, which stipulates a three-member arbitration board can be formed to solve disputes over interpretation and implementation of the pact. The two countries will be obliged to observe any judgment the board reaches. The members would consist of one from each of the two countries and another from a third country.

However, consent of the two countries is needed to convene such a powerful entity and Seoul can turn down Japan’s request. If Seoul disagrees, Japan can take the case to the International Court of Justice in the Hague, Japanese Foreign Ministry officials have indicated.

Last year, South Korea’s top court upheld lower court rulings that ordered Japanese firms to pay compensation money to individual wartime laborers, which has allowed the complainants to seize assets belonging to those firms.

Japan has blamed South Korea for violating the 1965 pact, which explicitly declared that all compensation issues involving Japan’s colonial rule had been “settled completely and finally.”

South Korea — including its Supreme Court and government — is obliged to observe the 1965 pact, according to Japanese officials, who have also been urging Seoul to take “appropriate measures” to correct the situation for more than four months.

The South Korean government, however, has yet to take any measures, citing the independence of the judiciary.

“Currently there are no prospects that such actions will be taken,” Tokyo said in Monday’s statement.

Based on the 1965 pact and related treaty, Japan normalized postwar ties with South Korea and provided what the treaty called huge “economic cooperation” consisting of grants worth $300 million and loans of $200 million over 10 years.

The pact, in turn, obligates the South Korean government to pay any compensation money to individuals by using some of those funds.

South Korea’s Supreme Court has, meanwhile, ruled the 1965 pact does not apply to “claims for consolation money” for “inhuman, illegal acts by Japanese firms that were directly linked to the illegal colonial rule.”

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