In a landmark ruling in May 2012, the South Korean top court quashed the lower courts' decisions and ordered a retrial in favor of the victims. The court found that the Japanese court's decision was based on the disputable premise that its 1910-45 colonial rule of Korea was legal, which is contrary to the South Korean Constitution.

Tuesday's ruling comes more than five years after the Japanese company appealed the decision.

Another major bone of contention is whether individual rights to compensation are still valid in spite of the 1965 treaty signed between Seoul and Tokyo to settle the colonial-era issues.

The Japanese government and firms accused of harsh labor have claimed Japan's provision of $500 million to Korea was in exchange for a complete and irreversible settlement. But Seoul has argued the deal does not cover all issues, including Japan's wartime sexual enslavement of Korean women.

The top court in 2012 ruled that the bilateral treaty between states does not terminate individual rights to damages.

This case has lately become a hot-button issue in Korea following allegations that a former top court chief justice used the case as political leverage to lobby the office of the previous President Park Geun-hye, who wanted amicable relations with Tokyo, to achieve his personal ambitions.

Victims' families and civic groups have strongly denounced the top court's alleged power abuse and called for swift progress amid a fast decline in the number of surviving forced labor victims.

Recent government data show that the number of survivors dropped 19 percent to 6,570 as of October compared with two years ago. Of the four plaintiffs in Tuesday's suit, Lee is the only surviving victim. (Yonhap)