A South Korean district court on Monday dismissed a wartime labor compensation lawsuit brought by a group of Koreans against 16 Japanese companies including Nippon Steel Corp. and Mitsubishi Materials Corp.

The Seoul Central District Court said that while the plaintiffs have not lost their right to claims as individuals under a 1965 bilateral accord under which Japan provided grants and loans to South Korea, such a right cannot be exercised through lawsuits.

South Korean Supreme Court rulings in 2018 had ordered Nippon Steel and Mitsubishi Heavy Industries Ltd. to compensate South Korean plaintiffs for forced labor during Japan’s 1910-1945 colonial rule of the Korean Peninsula.

The top court had said then that the right of individuals to claim damages was not terminated by the accord, which stipulates that issues relating to property and claims between the two countries and their peoples have been settled “completely and finally.”

“We cannot say that an individual’s right to claims completely expired under the agreement but it is right to interpret that a South Korean national is limited in exercising it against Japan or a Japanese national,” the Seoul court said in a statement.

The court had scheduled the ruling for Thursday, but notified parties in the case earlier Monday that the ruling date had been moved up.

According to the court, a total of 85 plaintiffs consisting of former Japanese wartime laborers and their bereaved family members filed the lawsuit in May 2015, demanding a combined 8.6 billion won ($7.74 million) in damages.

A lawyer who supports the plaintiffs said Monday that the court’s ruling was unjust as it went against the higher court’s decision, and that an appeal would be filed immediately.

Among the other firms named as defendants in the case are Nishimatsu Construction Co., Sumitomo Metal Mining Co. and Sumiseki Materials Co.

Ties between South Korea and Japan have soured since the 2018 South Korean Supreme Court rulings, with court proceedings under way to sell off the Japanese companies’ assets in South Korea to compensate the plaintiffs.

South Korea’s Foreign Ministry said Monday it respects both the Seoul court’s ruling and the plaintiffs’ rights, and will continue consulting with Japan to discuss rational solutions that both governments and all the parties concerned can accept.

Asked about the ruling — and if it represented a signal that Seoul is taking steps to help resolve the outstanding historical issues — Japan’s top government spokesman, Chief Cabinet Secretary Katsunobu Kato, said Monday that Tokyo would “continue to keep a close eye on the developments.”

“Japan-South Korea relations are currently in a very difficult situation,” Kato said. “We believe it’s important for South Korea to take responsibility and resolve our concerns, and we are paying close attention to specific proposals from them.”

Another issue souring ties is that of Koreans who worked as “comfort women.”

“Comfort women” is a euphemism for those who suffered under Japan’s military brothel system before and during World War II. They were forced or coerced into sexual servitude under various circumstances, including abduction, deception and poverty.

In April, the Seoul Central District Court tossed out a lawsuit by former comfort women demanding roughly ¥290 million in damages directly from the Japanese government to compensate for physical and psychological suffering. The dismissal was in direct contradiction to a January ruling delivered by a different group of judges in the same court.

Japan has maintained that all claims stemming from its 35-year rule were settled under the 1965 bilateral agreement.

Monday’s ruling comes ahead of a Group of Seven summit in England that is scheduled to kick off Friday.

Japanese government sources have said that Prime Minister Yoshihide Suga is not planning to set up a meeting with South Korean President Moon Jae-in on the sidelines of the meeting, even as both countries recognize the need to improve soured ties.

Suga is set to meet with U.S. President Joe Biden during the summit, slated to run through next Sunday in Cornwall, England, with Moon possibly joining for a trilateral meeting, according to other people familiar with the matter. G7 host Britain has invited Moon as a guest to the in-person summit, as South Korea is not a G7 member.

But Tokyo sees little benefit in holding a bilateral summit with Seoul at this time, as no major progress is expected in the talks on issues involving wartime history, the sources said.

“No preparations have been made or are being considered,” a senior government official said over the weekend.

It was not clear how Monday’s ruling would affect that outlook.

Suga and Moon held telephone talks in September last year. But the two countries have not held an in-person leaders summit since December 2019 when Suga’s predecessor, Shinzo Abe, met with Moon in China.

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