Archive for the ‘Lawsuits’ Category

DPRK trade bank sued for failure to settle debt

Monday, August 9th, 2010

UPDATE 8/9/2010: According to Yonhap:

A state-run North Korean bank has lost a lawsuit for not paying back a loan it borrowed from a Taiwanese bank nine years ago, the New York district court said Friday.

The District Court of New York confirmed it ordered the Foreign Trade Bank of Korea to pay compensations of just under US$6.77 million to the Mega International Commercial Bank (MICB) in a ruling made earlier in the week.

And as Josh notes: “By which they really mean the U.S. District Court for the Southern District of New York.”

Some additional case information may be found here.

As an aside, North Korea also recently lost another court case in the US.  Read more here.

ORIGINAL POST (5/6/2010): According to KBS:

The Taiwanese bank filed its lawsuit to claim some five million dollars in interest and principal on August 25th, 2001.

It is unclear whether the North Korean bank will repay the Taiwanese plaintiff, but North Korea experts say this will at least add to the crunch on North Korean finances.

Some reference information can be found here.

According to the Korea Times:

A state-run North Korean bank is facing trial in the United States for failing to pay a $5 million loan that it borrowed from a Taiwanese bank in 2001, according to sources Wednesday.

The District Court for the Southern District of New York ordered the Foreign Trade Bank (FTB) of North Korea to make a court appearance on May 17 and submit a proposed case management plan and scheduling order.

The FTB reportedly borrowed $5 million from the Mega International Commercial Bank (MICB) in Taiwan on Aug. 25, 2001 on the promise to amortize the principal and interest in three installments by Sept. 15, 2004.

No repayment was made until December 2008, when the FTB paid the MICB $100,000 to cover some of the interest. The North Korean bank has thus far paid off a total of $462,000 to the MICB, still owing $1.78 million in interest and $4.7 million in principal.

“It has been almost unprecedented for North Korea to be sued in a commercial dispute, though there were occasions that the North was asked to stand in U.S. courts for terrorist activities,” an official of the South Korean Consulate General in New York told Yonhap News.

The official said the litigation will hamper Pyongyang’s recent move to aggressively attract foreign investment in an effort to revive its flagging economy, given that obviously doubt will arise over its debt repayment capacity.

Despite a recent currency reform, the North’s economy remains in a parlous state as the U.N. sanctions have cut off virtually all sources of foreign currency.

Seoul has also suspended tours to the North’s popular tourist destination of Mt. Geumgang, following the shooting death of a South Korean tourist in the mountain resort in July 2008. The tours were a cash cow for the North, generating more than $500 million between 1998 and 2008.

On May 1, the FTB’s official exchange rate was 96.9 won per dollar, but it was traded at 180 won in Pyongyang and higher in other areas, demonstrating the instability of the North’s economy, according to the sources.

Since established in 1959, the bank has served as the reclusive regime’s main foreign exchange bank, they said. It has branch offices in France, Australia, Kuwait, Hong Kong and Beijing.

Read the full story here:
NK trade bank sued for failure to settle debt
Korea Times


Group sues North Korea for 1972 terror attack (and wins)

Sunday, July 18th, 2010

UPDATE (Oct, 3, 2010): The Los Angeles Times has also picked up this story:

Plaintiffs’ attorney Nitsana Darshan-Leitner was in her Jerusalem office in July when she got news of the Puerto Rican court’s verdict.

A judge there had just issued a $378-million civil judgment for her clients: the families of 17 Puerto Rican missionaries killed by Japanese Red Army militants at an Israeli airport in 1972.

Yet her euphoria was tempered by pragmatic reality: She would have to try to collect the judgment from a defiant North Korea, which the judge ruled had decades ago given training and support to the assailants.

Over the years, Darshan-Leitner has collected more than $72 million in judgments against Iran and the Palestinian Authority. But cash-strapped, isolationist North Korea had already ignored her legal motions and none of its officials showed up for even a day in court.

Legal judgments against Kim Jong Il and his Democratic People’s Republic of Korea in several civil cases have added up to more than $500 million. But not a dime has been collected.

The regime in “Pyongyang is secretive and they’re poor,” said Darshan-Leitner, director of the Israel Law Center, which pursues lawsuits against nations accused of sponsoring terrorism. “Since they don’t export many things, you have to look hard for the money.”

North Korea has for years been an elusive legal target. In 1988, it was added to Washington’s list of nations that sponsor terrorism. But U.S. law at the time precluded suits against foreign countries.

That changed in 1996 when Congress amended the Foreign Sovereign Immunities Act, allowing plaintiffs to pursue in court governments identified as state sponsors of terrorism. In 2008, then-President George W. Bush removed North Korea from the list after it agreed to allow international inspection of its nuclear facilities, closing the door on further lawsuits against Pyongyang.

But in the 12-year window of opportunity, some attorneys were successful in suing North Korea. In 2008, Washington-based attorney Richard Streeter won a $65.8-million judgment in a District of Columbia federal court on behalf of several crewmen of the U.S. Navy intelligence ship Pueblo, who had been held captive for 11 months by Pyongyang in 1968.

Silent for decades, the plaintiffs contacted Streeter in 2006 after his success in helping to collect on a judgment against Iran for a case involving the murder of a U.S. Navy diver by hijackers in 1985.

On Oct. 10, 2008, the day before North Korea was removed from the terrorism list, Darshan-Leitner filed suit against the regime on behalf of the family of Kim Dong Shik. The Chicago minister was kidnapped by North Korean agents in 2000 while on a trip to China and presumably died in a North Korean prison camp. The case is still pending.

Armed with her judgment in the Puerto Rico case, Darshan-Leitner is on the hunt for North Korean money and property worldwide and is looking into reports of $32 million in regime assets frozen by the U.S. government.

For his part, Streeter has filed motions against banks nationwide to disclose the names and balances on frozen accounts and has petitioned the U.S. government in court for more leads. He’s also preparing to take the search outside the country.

Plaintiffs’ attorneys are reluctant to give specifics of their search for fear of alerting target nations. In a case against Iran, Darshan-Leitner found banks in Germany and Italy where assets were being held, but by the time she filed motions, Tehran had withdrawn them, she said.

“We have some leads, but we can’t say in what countries — bank accounts that belong to the North Korean government and the Central Bank of North Korea,” she said. “When we confirm the money is there, we will approach lawyers in those countries to go to court and try to collect.”

In another case against the Iranian government, Darshan-Leitner filed motions in a Texas court to collect on funds from the sale of a seized Lubbock home once owned by the shah of Iran. She is also attempting to seize Persian antiquities kept at the University of Chicago as a way to collect on a judgment against the current government of Iran, she said.

In their collection efforts, lawyers often run up against the U.S. government.

“The U.S. State Department doesn’t like these cases,” said David Strachman, a Rhode Island attorney who has collected on judgments against foreign countries. “They take the position that private litigation by victims interferes with their closely held prerogative of international relations. In many cases, they come in as the 1,000-pound gorilla to try and stop us.”

The State Department declined to comment, but an official familiar with such cases says the agency has no written policy on citizens trying to collect judgments against foreign countries.

Still, one expert called such pursuits “a new and evolving area” that have prompted State Department interference.

“They don’t want to set a precedent,” said Jeffrey Addicott, director of the Center for Terrorism Law at St. Mary’s University’s School of Law in San Antonio. “Their argument is that if we seize assets of another nation to distribute to victims, what’s to stop them from fabricating cases to seize U.S. assets abroad?”

Darshan-Leitner hopes that Kim Jong Il’s regime might one day follow the lead of Libyan leader Moammar Kadafi, who, after years of resistance settled hundreds of millions of dollars worth of judgments over his nation’s involvement in the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland.

“Nobody pays attention unless these nations are held accountable,” said Han Kim, the son of the Chicago minister abducted by North Korea.

Meanwhile, plaintiffs’ lawyers continue their hunt for North Korean assets.

“I don’t know whether we’ll ever be successful. That’s the sad part,” said Streeter. He said he charged each of four plaintiffs a $5,000 retainer but will receive no more until a judgment is collected.

“But I want to see some of that money that Kim Jong Il is using to buy his yachts and his Courvoisier as payment to my clients,” he said. “I’ll take it in Courvoisier. I don’t care.”

Read the full story here:
Plaintiffs’ attorneys hunt for North Korea’s money
Los Angeles Times
John M. Glionna

UPDATE (July 18, 2010): Being a lawyer, Joshua does a great job finding and posting posting legal documents related to the DPRK at One Free Korea.  Most recently he posted a civil ruling which finds the DPRK liable for an airport attack in Israel. According to Joshua:

North Korea was held liable for its role in supporting the Popular Front for the Liberation of Palestine and the Japanese Red Army, which planned the attack together in North Korea. North Korea did not contest the suit. The award consisted of $78 million in compensatory damages awarded to the estates and surviving relatives of the victims, and $300 million in punitive damages.

You can read the ruling here (PDF).

Joshua has posted information from other civil litigation cases here.

The Washington Times did a story.

ORIGINAL POST (Dec 2, 2009): According to the

Families of victims have filed suit against North Korea on charges of supporting a major attack by the Japanese Red Army in Israel.

The group, Shurat HaDin, has filed a suit in a U.S. district court in San Juan, Puerto Rico for the families of the victims of the 1972 attack.

During the assault on Lod Airport, 26 people were killed and 80 others were injured by attackers alleged to have been trained by North Korea. The attack was attributed to the Japanese Red Army and the Popular Front for the Liberation of Palestine.

“This will be the first time North Korea is being held to account in a U.S. court for its support of terrorism over many decades,” Shurat HaDin said on Dec. 1.

According to Shurat HaDin‘s web page:

The case arises from a lawsuit brought by the families of victims of the 1972 terror attack at the Lod Airport in Israel in which 26 people were killed and 80 injured. The complaint alleges that the government of North Korea trained and financed the terrorists who perpetrated the heinous massacre.

The families are represented by Shurat HaDin director Nitsana Darshan-Leitner, the Osen Law group, attorney Robert Tolchin of New York and attorney Manuel San Juan of Puerto Rico.

In May 1972, terrorists from the Japanese Red Army (JRA), working in league with the Popular Front for the Liberation of Palestine (PFLP), placed automatic weapons, ammunition, and grenades in their check-in luggage on a flight from Italy to Israel. When their bags emerged in Tel-Aviv at the arrivals hall, they took out the weapons and opened fire in every direction mowing down passengers, flight crew members and airport workers. They also attempted to blow up airplanes on the ground using hand grenades. Two of the three attackers were killed, and a third, Kozo Akumoto, was captured, tried, and sentenced to prison in Israel.

Most of the victims were Catholic pilgrims from Puerto Rico who had come to visit the Holy Land for the first time.

North Korea was behind the attack. As the trial will show incontrovertibly, in the months leading up to the massacre the leaders of the JRA and PFLP met each other and with North Korean officials, who provided funding, intelligence, training, and other material support for the terrorists. The attack was part of the JRA’s declared strategy of taking their anti-Western violence and plans of communist revoultion to other parts of the world, beginning with Israel—a strategy approved by the North Korean government.

This will be the first time North Korea is being held to account in a U.S. court for its support of terrorism over many decades. It is widely known that one of the world’s most oppressive regimes is also a consistent support of terrorism, including providing weaponry, training bases, and funding for Palestinian terrorist organizations. They were also responsible for building an enormous underground bunker system for Hezbollah that dramatically increased the terrorist group’s fighting capacity in the 2006 Lebanon War.  For this reason, the U.S. State Department put North Korea on its official list of states that sponsor terror in 1988—a fact that makes it possible for American victims to sue the North Korean government and collect against their assets in a U.S. court. Although North Korea was removed from the list late in 2008 for political reasons, the current lawsuit was filed on behalf of the Puerto Rican families before the deadline for filing lawsuits, as were two other lawsuits Shurat HaDin currently has pending against North Korea.

The trial will begin on December 3 in the U.S. Federal Court in San Juan, Puerto Rico.

A copy of the complaint can be found here.


Chongryon headquarters on block after ruling

Wednesday, June 30th, 2010

According to the Daily NK:

Japan’s Supreme Court has ruled that Chongryon headquarters are a legitimate Chongryon asset which may be seized and auctioned as part of proceedings to recover loans made by a defunct credit union to the organization, Japanese broadcaster NHK reported on Tuesday.

A collection agency recently took over a number of bonds issued by the bankrupt Joeun Credit Union, which loaned around $700 million to Chongryon, the organization of North Koreans in Japan. The agency then announced its intention to pursue collection by putting Chongryon headquarters land and buildings in the Chiyoda district of Tokyo up for auction.

However, since the land and buildings are registered under a separate firm, Chosun Central Hall Management Association, the collection agency was required to file a lawsuit to get the necessary recognition of its right to seizure.

The court initially dismissed the collection agency’s claim on the grounds that the assets are held by a separate entity, but accepted, “It is possible to seize (the assets) if they can be shown to be actual Chongryon assets.”

Therefore, the collection agency filed a separate lawsuit to ask for recognition of the Chongryon headquarters estate and buildings as such an asset, and the Supreme Court has now ruled in its favor.

If the judgment is allowed to stand, the collection agency will be able to legally seize the estate and buildings of the Chongryon headquarters, adding to the organizations mounting woes.

Read the full story here:
Chongryon HQ on Block after Ruling
Daily NK
Yang Jung A


Pueblo crew awarded $65 million by US court

Tuesday, December 30th, 2008

From the Associated Press (via the New York Times):

A federal judge has awarded more than $65 million to several men of the Navy spy ship Pueblo, who were captured and tortured by North Korea in 1968.

The judge, Henry H. Kennedy Jr. of Federal District Court, issued the judgment against North Korea on Tuesday.

North Korea did not respond to the lawsuit, which accused it of kidnapping, imprisonment and torture. Four former crewmen of the Pueblo filed the suit in 2006.

Judgment Is Issued in North Korea Suit
Associated Press