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The Shanghai Maritime Court seized the Baosteel Emotion, a Japanese cargo ship owned by Mitsui OSK Lines, on Saturday over a debt it says is related to unpaid compensation for two Chinese ships leased in 1936.

China's seizure of the cargo ship could hurt business ties, Japan's top government spokesman has warned. "The Japanese government considers the sudden seizure of this company's ship extremely regrettable," Chief Cabinet Secretary Yoshihide Suga said on Monday.

The Chinese ships owned by Zhongwei Shipping were later used by the Japanese military and sank at sea. In 1988 two grandchildren of Zhongwei owner's filed a lawsuit seeking US$160 million.

The court awarded US$30 million in damages and compensation in 2007. The Supreme People's Court rejected Mitsui's appeal in 2010.

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