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North Korean entity defeated in South's court in first trade lawsuit

A North Korean state-owned enterprise presented inadequate evidence of contracts with South Korean entities, a South Korean court said Tuesday. File Photo by Stephen Shaver/UPI
A North Korean state-owned enterprise presented inadequate evidence of contracts with South Korean entities, a South Korean court said Tuesday. File Photo by Stephen Shaver/UPI | License Photo

April 6 (UPI) -- A North Korean state-owned enterprise has lost an unprecedented court battle in the South, after filing a lawsuit with a South Korean court in 2019 for overdue payments.

Seoul Central District Court's Judge Kim Choon-soo said Tuesday in his verdict that Pyongyang's Myongji Co., a state-owned enterprise, did not sign a contract directly with its South Korean partners, the Hankyoreh reported Tuesday.

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The North Korean entity's use of Chinese intermediaries was cited as a reason for insufficient claims.

"There is inadequate evidence to conclude that Myongji Co. has signed contracts in this case with [South] Korean companies," Kim said.

In 2019, Myongji sued four South Korean firms that had agreed to receive North Korean shipments of iron ore in 2010.

But in 2010,Seoul imposed economic sanctions, suspending trade, including a North Korean delivery of 2,600 tons of iron ore.

South Korean purchasers of the commodity reportedly sent a portion of the payment, about $1.24 million, JoongAng Daily reported Tuesday. Myongji said they are owed $4.74 million, according to the Hankyoreh.

The legal victory for South Korean defendants -- Hanchang, Hanil Chemical, Sungan F&C and Eastern Metal -- drew strong criticism from plaintiffs Tuesday.

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Kim Han-shin, head of the South-North Economic Cooperation Research Center in the South, was the only plaintiff who appeared in court, according to the JoongAng. Kim said South Korean sanctions were the problem.

"We came to the court for relief because of the unresolved pain inflicted on North and South Korean business people by the May 24 sanctions, which have lasted 11 years," Kim said.

"It is not right that the Unification Ministry talks about restarting inter-Korean economic cooperation without taking effective measures regarding the sanctions."

Lee Kyung-jae, an attorney with South Korean law firm Dongbuka in charge of the plaintiff's case, said better policies are needed for equitable inter-Korean relations, the report said.

The Myongji Co. operates under the supervision of North Korea's Minkyongryon, an entity that specializes in inter-Korea trade relations.

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