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Constitutional Court dismisses Kaesong firm's lawsuit against suspension

All News 11:48 May 31, 2022

SEOUL, May 31 (Yonhap) -- The Constitutional Court ruled Tuesday the state does not have to enact laws to compensate businesses that operated in the now-shuttered Kaesong industrial zone in North Korea.

The court dismissed a lawsuit one of the Kaesong companies filed against the government, claiming it breached its constitutional duty to legislate laws to provide compensation for property rights violations.

The court said the companies decided to do business in North Korea under their own responsibility, knowing their investment was at risk of unpredictable damage depending on inter-Korean relations.

"It is difficult to say that there is an obligation of legislation to provide compensation for losses that occurred when the risk is already expected," the court said.

The 2018 file photo taken from a South Korean observatory shows the Kaesong Industrial Complex in North Korea. (Yonhap)

The 2018 file photo taken from a South Korean observatory shows the Kaesong Industrial Complex in North Korea. (Yonhap)

The government already operates funds to provide compensation for losses to inter-Korean businesses and there is a special law to support companies that operated in the North Korean border city, the court added.

The company received the right to acquire a plot of land in Kaesong in 2007. But its business was suspended after Seoul banned all forms of inter-Korean cooperation on May 24, 2010, after North Korea torpedoed the South Korean warship Cheonan in March of that year.

The inter-Korean industrial complex was closed in 2016 following the North's fourth nuclear test.

The company filed the constitutional petition in 2016 accusing the government of "legislative omission" in connection with the May 24 measure, immediately after losing a damages suit against the state.

In January this year, the Constitutional Court ruled the government's 2016 shutdown of the Kaesong complex was constitutional, dismissing a suit a group of Kaesong businesses filed, claiming their property rights were violated.


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