The Shanghai Maritime Court announced earlier it had impounded a large freight vessel owned by Mitsui OSK Lines in accordance with the law, as the Japanese company had failed to pay a Chinese firm.
But the case had political overtones, given uneasy ties between the two Asian giants, which are locked in a territorial dispute over islands in the East China Sea.
“The court has delivered a ruling at 8.30am on April 24, 2014, to lift the detention of the Baosteel Emotion ship,” the court said.
It added Mitsui had “fulfilled its obligations” by paying compensation and additional court costs of about US$390,000. It did not name the Chinese party who was awarded the compensation.
Japan had lodged a formal diplomatic protest over the seizure, and warned the ruling could “intimidate Japanese companies doing business in China.”
Japanese media suggested the seizure of the ship was meant to underline China’s growing assertiveness ahead of US President Barack Obama’s arrival in Tokyo earlier this week on the first leg of an Asian tour.
Tokyo believes that the seizure undermines a 1972 joint communique that normalized ties between Japan and China, in which Beijing agreed to renounce any demands for war reparations.
China replied that the case was a civil matter and had nothing to do with war reparations.
The ship seizure comes as a set of lawsuits related to wartime forced labor have also been filed in China against Japanese corporations.
The freed ship, which was docked near Shanghai, was to depart China later yesterday, Japan’s Kyodo news agency said.