A South Korean court ruling over sex slavery during Japan’s occupation of the Korean peninsula threatens to plunge the relationship between the two pivotal US allies in Asia into a new crisis.

The Seoul central district court has ordered Japan to pay Won100m ($91,000) to 12 former sex slaves — known as comfort women — saying no compensation had ever been made for their “extreme, unimaginable mental and physical pain”.

The judgment risks driving a new wedge between Tokyo and Seoul as US president-elect Joe Biden seeks greater co-operation among democracies in the region in response to China’s increasingly assertive stance.

“It’s extremely regrettable. There’s absolutely no way we can accept this,” said Katsunobu Kato, Japan’s chief cabinet secretary. “We strongly request that South Korea as a nation takes measures to cease its violations of international law.”

Under the principle of state immunity, nations cannot usually be sued in the courts of another country. Japan maintains that all claims relating to the war were settled by a 1965 treaty under which it paid compensation to South Korea.

Lauren Richardson, an expert in Korea-Japan relations at Australian National University, said that with the two sides so “diametrically opposed” on the issue that the Biden administration would struggle to make any progress.

Moon Jae-in, South Korea’s president, has promised not to intervene with the country’s judiciary, further limiting diplomatic options for to resolving the dispute, experts said.

The case marks the latest escalation of tensions after South Korean courts in 2018 allowed claims against Japanese companies over wartime forced labour.

The following year, Tokyo’s retaliatory threats to cut off Seoul’s access to technology inputs sparked months of diplomatic bluster and protests. The spiralling conflict almost led to the unravelling of an intelligence sharing arrangement, which was only averted by Washington’s last-minute intervention.

The bilateral hostility over the issue eased in 2020 during the coronavirus pandemic but returned to the fore this year because of the latest ruling, coupled with the courts’ separate efforts to sell local assets of Mitsubishi Heavy Industries in a wartime forced labour dispute.

While the comfort women decision has raised a new source of friction, the forced labour cases are more likely to prompt a diplomatic crisis, since the defendants in those cases are private companies and the South Korean courts are close to enforcing judgments against them.

Japan would probably retaliate against the seizure of assets from its companies, which it would regard as a fundamental violation of the 1965 treaty.

Japan paid a further ¥1bn ($9.6m) into a compensation fund for South Korean comfort women in 2015 as part of a “final and irreversible” agreement to settle the issue.

South Korea’s foreign ministry said it would respect the court’s decision but would continue talks with Japan on the issue.

In Seoul, however, a victims’ support group said Friday's “pioneering ruling” was a victory for human rights.

“When I heard the verdict, I was filled with emotion,” said Kim Kang-won, a lawyer representing the women, seven of whom have died.

Supporters of the South Korean victims argue that the 1965 treaty needs to be revisited because it was signed by authoritarian ruler Park Chung-hee, who acted against public sentiment.

Any breakthrough, Ms Richardson said, might hinge on Tokyo seeing that Seoul is now as “shackled” by the 1965 treaty’s clause of compensation settlement — just as Japan is burdened by “Article Nine” of the country’s postwar constitution, which limits the development of the Japanese armed forces and security policy.

“Japan wears that like a chain around its neck that was imposed on it by another power. South Korea sees this treaty as being imposed on it by a former dictator. They are doing everything they can to legislate around it, just like [former prime minister Shinzo] Abe did with Article Nine,” Ms Richardson said.