Over 500 Korean forced labourers died in the incident. Friday's ruling overturned an August 2001 judgment by the Kyoto District Court awarding compensation to 15 survivors of the tragedy.

Given the chaos just days after the end of World War II, it was unavoidable that risks accompanied the voyage of the vessel, the Ukishima-maru, said presiding judge Takaaki Okabe at the Osaka High Court in western Japan.

The Japanese government "cannot be said to have the obligation to transport passengers safely," the judge said.

The plaintiffs are set to bring the case to the Supreme Court.

Chon Sung-Ryol, 61, whose father was killed in the sinking after working as a forced labourer in Japan, said he could never accept the ruling.

"I will pass on my father's grudge (from generation to generation) for a millennium," he told a news conference, arguing the Japanese judicial system did not treat Koreans fairly.

Ruling on the original lawsuit filed by 80 plaintiffs, the Kyoto court had ordered the state to pay three million yen (25,400 dollars) each or a total of 45 million yen to 15 South Koreans, who survived after the Ukishima-maru was blown up and sank.

Carrying about 4,000 Koreans who had served as forced labourers in Japan, the ship departed northern Japan on August 22, 1945, on its way to Pusan, South Korea, to take the former labourers home.

En route, the ship called in at a port in Kyoto Prefecture in central Japan, where the United States had placed many floating mines.

As it neared the port in Kyoto on August 24, an explosion ripped through the ship and it capsized, killing 524 South Koreans and 25 crew members.

Both Osaka and Kyoto rulings said the ship had been blown up by sea mines. There are some other suspected causes for the explosion, including a suicide bombing by a crew member.

The Kyoto district court ruled the Ukishima-maru could have avoided the explosion if the captain had chosen not to enter the port that was known to be dangerous.

The plaintiffs had filed suits with the Kyoto court on three occasions between 1992 and 1994 seeking an apology and about three billion yen in compensation.

They had claimed that the Japanese government had a responsibility to return the Koreans to their homes safely and it failed to fully investigate the cause of the explosion and identify the victims.

The average age of survivors is over 80. It took nine years to reach the initial ruling since 50 people brought action first in 1992.

Six of the 15 plaintiffs who won the compensation ruling at the Kyoto district court have already died during the appeal trial that stretched over 21 months.

WAR.WIRE