The Supreme Court recognised the correlation between the toxic defoliant and certain skin diseases, saying the 39 victims should receive a total of USD 415,000 from Dow Chemical and Monsanto.
The veterans had complained that Agent Orange was responsible for skin diseases such as "chemical acne", which is caused by exposure to dioxin contained in Agent Orange, the court said.
Payment is now up to the US firms, but Dow Chemical said in a statement quoted by Yonhap news agency that it disagreed with the Supreme Court's decision, arguing that the verdict was not backed by clear evidence, citing US court rulings.
More than 16,000 veterans filed separate lawsuits in 1999 against the US firms, seeking about USD 4.4 billion in damages, but a district court ruled against them.
In 2006, an appeals court ordered the US firms to pay a total of USD 61 million in compensation to 6,795 veterans and their families.
But the Supreme Court, in its ruling today, sent the case back to the appeals court for further review.
South Korea sent some 300,000 troops to fight alongside the United States and southern Vietnamese forces during the war.
US forces widely sprayed Agent Orange, which contained the lethal chemical dioxin, in Vietnam during the conflict to deprive enemy guerrillas of forest cover and destroy food crops.
Veterans in South Korea estimate the number of Korean victims of the chemicals at about 150,000. Many insisted they were suffering from various ailments associated with exposure to the powerful herbicide.
Washington has never accepted responsibility for the Vietnamese government's claim.
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