SHANGHAI: China on Thursday released a seized Japanese ship after its owner paid $28 million in compensation, a court said, in a business dispute dating to the 1930s which underlines tensions between the countries.

The Shanghai Maritime Court announced on Saturday it had impounded a large freighter owned by Mitsui O.S.K. Lines in accordance with the law, as the Japanese company had failed to compensate a Chinese firm for two ships chartered in 1936.

But the case had political overtones given uneasy ties between the two Asian giants, strained by a territorial dispute over islands in the East China Sea and China’s perception that Japan has failed to make amends for atrocities committed during World War II.

“The court has delivered a ruling on Thursday, to lift the detention of the Baosteel Emotion ship,” the court said in a statement.

Mitsui had “fulfilled its obligations” by paying the compensation and additional court costs of around $390,000, the court said. It did not name the Chinese party awarded the compensation.

The Japanese company said the released ship departed a Chinese port on Thursday afternoon, but warned the incident could have a “negative impact” on its business activities in China.

The ship Baosteel Emotion, designed to carry iron ore, was docked at Majishan island off Shanghai, according to Chinese media reports.

Japan had lodged a formal diplomatic protest over the seizure and warned it could “intimidate Japanese companies doing business in China”.—AFP