Constitutional Court dismisses Gaeseong firm's lawsuit against suspension

A South Korean observatory shows the Gaeseong industrial complex in North Korea, May 31. Yonhap

The Constitutional Court ruled Tuesday that the state does not have to enact laws to compensate businesses that operated in the now-shuttered Gaeseong industrial complex in North Korea.

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

It said the companies decided to do business in North Korea at 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 for legislation to provide compensation for losses that occurred when the risk is already expected," the court said.

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 Gaeseong in 2007. But its business was suspended after Seoul banned all forms of inter-Korean cooperation, 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 Gaeseong complex was constitutional, dismissing a suit filed by a group of businesses, claiming their property rights were violated. (Yonhap)