Seoul to back companies looking to sue North Korea for using their property without permission

North Korea leader Kim Jong-un speaks to officials at the Mount Geumgang resort on the east coast of North Korea, in this October 2019 photo. Seoul is pushing to hold Pyongyang liable for damaging and using South Korean companies' property there, including the pictured Hotel Haegumgang owned by Hyundai Asan. Yonhap

Satellite images show Hotel Haegumgang demolished at Mount Geumgang resort

By Jung Min-ho

Seoul is pushing to hold Pyongyang liable for damaging and using the property of South Korean companies without their consent at the Mount Geumgang resort in North Korea, officials told The Korea Times, Friday.

This move comes as the Ministry of Unification is looking into the feasibility of taking separate legal action against the North Korean regime over clear violations regarding the property rights of the South Korean companies that own the facilities and equipment at the inter-Korean manufacturing complex in Gaesong, based on intelligence and North Korea's own media reports.

"Our stance is that, if any companies or businesspeople are willing to take legal action [over property damage at the Mount Geumgang resort], we would support them," a ministry official said. "Even if it takes a long time, we will hold North Korea responsible for violating the property rights of our companies and demand compensation."

The previous day, the Voice of America, a U.S.-funded broadcaster, released satellite images showing that Hotel Haegumgang, a floating hotel owned by South Korea's Hyundai Asan, has been removed from the resort area. This immediately resulted in the ministry strongly condemning the move.

The Korea Tourism Organization, a government agency that owns three facilities worth tens of billions of won (tens of millions of dollars) there, is reportedly preparing to seek damages. Speaking to The Korea Times, its representative said it had no specific plan yet.

Some of the facilities seized by North Korea at the Mount Geumgang resort and the Gaeseong Industrial Complex belong to the South Korean government. Yet officials have been cautious about taking the case to court here directly. The reason is that the evidence collected so far shows no visible damage to the facilities it owns, such as a building for the reunions of families separated by the 1950-53 Korean War and a fire station.

Their reluctance suggests the magnitude of the legal challenges faced by those seeking damages from the reclusive and authoritarian state.

This July 2022 screenshot from North Korea's official Korean Central Television shows what appears to be a Hyundai bus operating in Gaesong, North Korea. Yonhap

First of all, it would be extremely difficult to secure sufficient evidence to prove North Korea's unlawful activities without actually visiting the location in question, something that the North would likely not allow. Therefore, satellite photos and North Korea's media reports might not be enough to win the case.

Even if the court rules in favor of Seoul, there is an even greater challenge remaining: Making North Korea pay damages. Almost certainly, the regime would not do so, leaving it purely as a symbolic win.

Despite all this, North Korea's devious moves have left the ministry with no other option but to take a tough stance.

In a recent interview with the Hankook Ilbo, the sister paper of The Korea Times, Minister Kwon Young-se said Pyongyang had been seeking to make deals with a third country over the operation of South Korea's property in Gaesong. Such cooperation would be a violation of United Nations sanctions as well as the inter-Korean agreement.

A deal signed by the two Koreas over the joint Gaesong project ― which has been halted since 2016 ― bans any party from nationalizing the property invested by the other. If any country is found to be involved in using South Korean property without its consent, the ministry said it will bring the issue to the United Nations.