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Seoul could seek int'l arbitration over dispute

South Korea could seek international arbitration in case North Korea disposes of seized South Korean assets at a scenic mountain resort in the isolated country, a research arm of the legislature said Thursday.

The two Koreas have been at odds over the assets at Mount Kumgang, the site of stalled joint tour programs that had served as a key cash cow for the North.

South Korea could follow in the footsteps of a dispute between foreign oil companies and the Libyan government, the National Assembly Research Service said in a report posted on its Web site.

Libya nationalized assets of foreign companies in 1973 and 1974, including the Texaco Overseas Petroleum Company and California Asiatic Oil Company.

The two U.S. oil companies took the case to the International Court of Justice, which appointed an arbitrator. 

The African country did not participate in the arbitration, though it later agreed to settle the arbitration process by providing oil worth US$152 million to the two American oil companies, according to the research arm.

The joint tour program between the Koreas stipulates an international dispute settlement procedure, according to the Unification Ministry, which handles inter-Korean affairs.

Still, it's up to the company whether it will resort to the international dispute settlement procedure, a ministry official said.

South Korea halted the joint tour programs in 2008 following the shooting death of a South Korean female tourist at the resort.

The move prompted the North last year to seize or freeze several South Korean assets.

North Korea has threatened to take unspecified legal actions to dispose of the South Korean assets unless South Korean investors join an international tour program of the resort under its new law.

A delegation of South Korean government officials and business representatives has traveled to the resort twice since late June, though no progress was made. No date for another consultation has been set.

Later Thursday, the North Korean Web site Uriminjokkiri said

South Korean firms can be compensated for the loss from the halted

tour program if they participate in a new tour project that the

communist nation has recently started.

"We have opened the way for South Korean firms with real estate properties at Mount Kumgang to participate in a new tour program," the Web site said. "If they participate in this, the real estate properties will remain as they are and the loss incurred for the past three years will be able to be compensated soon."

Even if the firms do not participate in the new project, they are allowed to put the properties on lease or sell them off, the Web site said, rejecting Seoul's claims that the North has infringed upon the property rights of the South Korean firms.

(Yonhap News)

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