Recognition and Enforcement of
Foreign Judgments
Regarding Business Activities
Introduction
In
the light of an importance in practice, this note examines the Japanese
mechanism for the enforcement of foreign judgments regarding business
activities. How can a successful party in a foreign court enforce a foreign
judgment in
In
order to answer these questions, first of all, the legal basis of the Japanese
mechanism for the enforcement of foreign judgments is pointed out. Then the two
main provisions making up the Japanese mechanism are examined in detail:
Article 24 of the Civil Execution Act, which is the fundamental provision for
the enforcement of foreign judgments (see Part II), and Article 118 of the Code
of Civil Procedure, which sets forth the particular requirements for the
recognition of foreign judgments whose fulfillment is required in Article 24 of
the Civil Execution Act for the enforcement (see Part III).
In
researching these two provisions, Japanese court decisions applying them in
cases regarding business activity will be considered appropriately. In
particular, two recent Supreme Court decisions will be repeatedly referred to.
One is a decision of 1997, in which the Supreme Court denied the enforcement of
a
I. Statutory
Provisions
1. International
Conventions
No
bilateral or multilateral international agreement or treaty exists between
2. National Law
In
(1) Article 118 of
the Code of Civil Procedure
Article
118 of the Code of Civil Procedure (hereinafter the CCP) is aimed at the
recognition of foreign judgments. However, it is the essential part of the
Japanese mechanism for enforcement of foreign judgments, because the
fulfillment of the particular requirements set forth in it is required for
their enforcement (Article 24(3) of the CEA). It provides as follows:
A
final and conclusive judgment of a foreign court shall have its effect only
upon the fulfillment of the following conditions:
(i) that the foreign
court would have jurisdiction pursuant to the law or treaties;
(ii) that the unsuccessful defendant received service of a
summons or order as required for the commencement of proceedings (except by
publication in a bulletin board at the court or by similar methods), or
appeared in the action without receiving such service;
(iii)
that the contents of the judgment of a foreign
court and its proceeding are not contrary to the public order or good morals in
(iv) that reciprocity is assured.
The CCP was originally enacted in 1890 (Law No. 29 of
1890). Recognition of foreign judgments was provided in the old Article 200 before the 1996 reform of the CCP. So articles by authors and court decisions
before that referred to Article 200, not Article 118. The old Article 200,
slightly different from the present Article 118, provided that:
A judgment
rendered by a foreign court which has become final and conclusive shall have
its effect only upon the fulfillment of the following conditions:
(i) that the foreign
court would not lack jurisdiction pursuant to the law or treaties;
(ii)
that, where the unsuccessful defendant is a Japanese, he or she received
service of a summons or order as required for the commencement of proceedings
except by service by publication on a bulletin board at the court or by similar
methods, or appeared in the action without receiving such service;
(iii) that the foreign judgment is not contrary to the
public policy of
(iv) that reciprocity is assured.
(2) Article 24 of
the Civil Execution Act
The
Civil Execution Act (hereinafter the CEA) includes a provision in Article 24
for the main legal basis for the enforcement of foreign judgments. It provides
for a special action and procedure for the enforcement (see paragraphs 1, 2 and
4 below) and for requirements which foreign judgments must fulfill (see
paragraph 3 below). It reads as follows:
1.
An action for a judgment granting execution of a judgment of a foreign court
shall be brought before a district court as the general forum of the debtor or,
if there is no such general forum, for the place where the matter subject to
the claim or any attachable property of the debtor is situated.
2.
The judgment granting execution shall be rendered without reviewing the
substance of the judgment of a foreign court.
3.
The action under paragraph 1 shall be dismissed if it is not established that
the judgment of a foreign court is final and conclusive, or if the judgment of
a foreign court does not fulfill the conditions set forth in the items of
Article 118 of the Code of Civil Procedure.
4. In the judgment granting execution, it shall be declared
that the execution is granted under the judgment of a foreign court.
II. Procedure for
Recognition and Enforcement
1. No Special
Procedure for Recognition of a Foreign Judgment
A foreign judgment is recognized in
2. Action for the
Judgment Granting Execution of a Foreign Judgment
In
contrast, for the enforcement of foreign judgments in
This
action is to be distinguished from an application for the enforcement process
itself. Only if a judgment under Article 24 is given, does the foreign judgment
become an “enforceable title,” that
is, an instrument which confers the right to proceed to enforcement. In other
words, a foreign judgment which is granted execution by a judgment under
Article 24 has an enforceable effect in
A
party seeking to enforce a foreign judgment must bring an action for the
judgment before a district court of
It
should be noted that an action for a judgment granting execution of foreign
judgments may be time-consuming in practice. It takes about between two and
four years to finish an action in a court of first instance. In the case of Nagoya
District Court, Judgment, February 6, 1987, Hanrei Jiho, No. 1236, p.
113 (granting enforcement of a litigation costs order of a German court),
it took six long years to get a judgment from bringing an action. The reform that
the execution of foreign judgments is granted in a summary procedure deserves
future discussion (it is noteworthy that the procedure for granting execution
of foreign arbitral awards is now simplified from the judgment procedure to the
summary procedure by new Arbitration Act of 2003 (Law No. 138 of 2003). See Article 46 of the Act).
3. Non-Review as to
Substance
According
to Article 24(3) of the CEA, it must be ensured in an action for a judgment
granting execution of a foreign judgment that the foreign judgment in question
satisfies the requirements under Article 118 of the CCP. However, in doing so,
the substance of the judgment may not be reviewed in a Japanese court in which
enforcement is sought (Article 24(2)). In other words, the merits of the case
must not be tried afresh or reopened. The basic principle is generally
understood to mean that the court is not allowed to rule again on the ruling
made by the foreign court. As to the recognition, there is no corresponding
provision which prohibits a review of the substance of a foreign judgment in
the CCP or other Acts. However, it is generally understood that it must not be
also reviewed as to substance at the time of recognition.
In
the context of this principle, opinions are divided on the question on whether
a Japanese court is prohibited from examining new evidence and finding new
facts not found in a foreign judgment, and is bound by the findings of fact on
which the foreign court based its judgment in investigating the fulfillment of
the requirements laid down in Article 118 of the CCP. This question especially
arises in examining contrariety to public policy in Article 118 (iii) of CCP.
For public policy exception (see Part IV.4). Some courts have stated
that the court is prohibited from doing so; then, the requirements should be
examined only based on the facts found by the foreign court (Tokyo
District Court, Judgment, September 6, 1969, Hanrei Jiho No. 586, p. 73, Hanrei Taimuzu No. 242, p. 263 (granting enforcement of a
judgment by the Superior Court of California). See also Tokyo
District Court, Judgment, February 18, 1991, Hanrei Jiho No. 1376, p.
79, Hanrei Taimuzu No. 760, p. 250) (denying enforcement of a
California punitive damages judgment because it is contrary to Japanese public
policy)). However, not a few courts seem to take into consideration new facts
not found by a foreign court (See, e.g., Supreme
Court, Judgment, June 7, 1983, Minshu Vol. 37, No. 5, p. 611); Tokyo
High Court, Judgment, March 31, 1982, Hanrei Jiho No. 1042, p. 100, Hanrei
Taimuzu No. 471, p. 123). Moreover, a court sometimes clearly states
that it may examine new evidence and find new facts not shown in a foreign
judgment (See Tokyo
High Court, Judgment, June 28, 1993, Hanrei Jiho No. 1471, p. 89 (refusing enforcement of a California punitive damages judgment because it has
a penal character and is contrary to Japanese public policy)). Nowadays, the
latter approach seems to prevail.
III. Particular
Requirements
As
stated above, for a judgment granting execution of a foreign judgment, it must
be ensured that the foreign judgment in question satisfies the requirements for
recognition under Article 118 of the CCP. The requirements involve the
following: the foreign judgment (see infra 1.), jurisdiction (see
infra 2.), service (see infra 3.), public policy (see infra 4.), and reciprocity (see infra 5.).
1. Foreign Judgment
(1) Definition by
the Supreme Court
What
kind of decision is a “judgment of a foreign court” to be enforced in Japan? This has been often discussed in lower
courts. The Supreme Court, in a case of April 28, 1998, defined a “judgment of a foreign court” as any decision, whatever its name, procedure
or form, given by a
foreign court in which both parties are entitled to due process, in respect of legal relationships under
private law (Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853).
(2) Judgment
Any
decision of such nature as the Supreme Court defines, whatever it may be called according to the law of the rendering country,
such as a decree, order, determination or ruling, may be
enforced in Japan as a “judgment.” It
need not be a judgment ordering the payment of money (a money judgment), but
may be a non-money judgment, for example, a judgment ordering the delivery of property or an order to
refrain from certain acts. It may
have been given after contested proceedings or be a judgment given in default
of the appearance of the defendant (See e.g., Tokyo District Court, Judgment, January 14,
1994, Hanrei Jiho, No. 1509, p. 96, Hanrei Taimuzu No. 864, p.
267 (a New York State court judgment); Nagoya
District Court, Judgment, February 6, 1987, Hanrei Jiho, No. 1236, p.
113 (a German court judgment); Tokyo District
Court, Judgment, January 31, 1994, Hanrei Jiho, No. 1509, p. 101, Hanrei
Taimuzu No. 837, p. 300 (a judgment of the High Court of Justice of
England, Queen's Bench Division)). In
addition, it may include a judgment by default against a party failing to obey
a court order (See, Mito District Court, Ryugasaki Division,
Judgment, October 29, 1999, Hanrei Taimuzu No. 1034, p. 270 (granting enforcement of a default judgment rendered by the United States
District Court for the District of Hawaii, as a sanction against the judgment
debtor who failed to attend his own deposition after being served with a proper
notice, under Federal Rules of Civil Procedure, Rule 37(d)). The fact that a foreign judgment was given in a summary
procedure is not by itself grounds for a refusal to enforce it (See, Tokyo District Court, Judgment, February 25,
1998, Hanrei Taimuzu, No. 972, p. 258 (granting enforcement of a
summary judgment by the Supreme Court of
Queensland, Australia)).
Does
the term “judgment” cover a decision in respect of the
costs and expenses of the litigation, which can be made separately from the
judgment on the merits in the principal case? Lower courts have considered the
litigation costs orders as judgments (Nagoya
District Court, Judgment, February 6, 1987, Hanrei Jiho, No. 1236, p.
113 (granting enforcement of a litigation costs order of a German court); Tokyo District Court, Judgment, November 13,
1967, Kaminshu Vol. 18, No. 11, p. 1093 (granting enforcement of a
litigation costs decision of a Swiss commercial court)). In the case of 1998 mentioned above, the Supreme Court declared for
such lower court decisions and granted the enforcement of the costs orders on
an indemnity basis issued by the Hong Kong High Court (See, Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853 (the
judgment creditors who were alleged by the judgment debtors to pay money but
won in the Hong Kong High Court sought to enforce the orders thereby that the
judgment debtors should compensate the total amount of the litigation cost of
about 1.2 million Hong Kong dollars borne by the judgment creditors)).
There is a related question which has been discussed
in
As
to the effect of a foreign insolvency proceeding, the Law on Recognition of and
Assistance in Foreign Insolvency Proceedings was enacted in 2000. According to
that law, a foreign insolvency proceeding may be “recognized” and appropriate assistance will be given.
Authentic
instruments drawn up by a foreign notary are not a “judgment” to be enforced or recognized.
(3) Foreign Court
A judgment must have been given by a “court” of a foreign country.
The term “court” means an
authority which regularly exercises judicial functions and is entitled to give
a judgment as regards legal relationships under private law. It need not be a court, but may be an
administrative tribunal. If a judgment
rendered by a foreign criminal court imposes a fine on the defendant and also
orders him or her to pay compensation to the injured party, the latter part of
the judgment can be severed from the former and enforced in
As
to the meaning of a foreign “country,” a question has been raised whether it must be a State recognized by
the Japanese government in accordance with
international law. For example, a judgment of a court of Taiwan or
(4) Finality and
Conclusiveness
For
enforcement or recognition, a foreign judgment must be “final and conclusive” (Article 24 (3) of the
CEA, Article 118 of the CCP). It is generally understood that the judgment becomes final and conclusive in time when
the judgment is no longer subject to ordinary forms of review under the law of
the rendering country. Thus a foreign judgment is not enforced if an appeal or
other form of review is pending or still available in the rendering country.
(5) Validity
It
is argued that a foreign judgment must be valid under the law of the State of
origin. There is a court decision
which refused to enforce a
2. Jurisdiction
(1) Standards
A
fundamental requirement for the recognition or enforcement of a foreign
judgment is that the foreign court should have had international judicial
jurisdiction pursuant to the law and treaties (Article 118(i)
of CCP). “[T]he law and treaties” are now uniformly understood to be those of Japan. Thus for recognition and
enforcement the foreign court must have jurisdiction in the view of Japanese
law.
Then
there is a question which has been discussed for a long time: should the
standards for determining jurisdiction of a foreign court required for
recognition or enforcement in Japan, called “indirect
jurisdiction,” be identical with those for determining
jurisdiction of Japanese courts required to entertain a claim there, called “direct jurisdiction”? As to the standards
for “direct jurisdiction,” the
so called “exceptional circumstances theory” is well-established case law (See, Supreme Court, Judgment, November 11, 1997, Minshu Vol. 51, No. 10, p. 4055 (Japanese courts have jurisdiction, in principle,
if
The
prevailing view of authors and many decisions by lower courts have considered
the two as one and the same things; “indirect
jurisdiction” would be the reflection of “direct jurisdiction” in the mirror (See, Tokyo
District Court, Judgment, January 14, 1994, Hanrei Jiho, No. 1509, p.
96, Hanrei Taimuzu No. 864, p. 267; Osaka
District Court, Judgment, March 25, 1991, Hanrei Jiho No. 1408, p. 100, Hanrei
Taimuzu No. 783, p. 252 (refusing enforcement of a judgment of the U.S.
District Court for the District of Minnesota because of lack of jurisdiction)).
However, some authors disagree and argue that the standards for determining “indirect jurisdiction” need not be identical
with those for determining “direct jurisdiction.” Recently this view has been gaining support. It purports mainly to
give foreign judgments, especially ones pronouncing divorce, more opportunity
to be recognized or enforced. Some authors suggest that a Japanese court may
impose more rigorous jurisdiction standards on foreign courts than apply to the
Japanese court itself. The Supreme Court seems to support the latter view, in
the decision of April 28, 1998 (Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853),
granting enforcement of a Hong Kong High Court judgment, in stating that:
“whether the judgment country has the international jurisdiction to
adjudicate should be determined in accordance with principles of justice and
good reasons, basically applying the provisions of territorial jurisdiction
stated in our Code of Civil Procedure, and taking into account the concrete
circumstances of each case, from the viewpoint of whether or not it is proper
for our country to recognize the foreign judgment.”
(2) Main
Jurisdictional Grounds
The
Supreme Court ruling on “indirect jurisdiction” may increase uncertainty in determining whether a foreign court had
jurisdiction, because the words “from the viewpoint of
whether or not it is proper for our country to recognize the foreign judgment” is vague. However, foreign judgments may
be given more opportunity to be recognized or enforced than when standards for “direct jurisdiction” are applied. It appears that the Supreme Court held the
In
court cases, for example, the following grounds under the CCP have often been
relied on: the defendant’s domicile (Article 4) (See e.g., Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853 (upholding jurisdiction of the Hong Kong High Court based on the domicile of
defendants (the judgment creditors) in Hong Kong , with regard to the First
Case in which the judgment creditors were required to pay a certain sum under
an alleged guaranty agreement)), the place of performance (Article 5, item (i)) (See, Tokyo District Court, Judgment, January 14, 1994, Hanrei Jiho, No. 1509, p. 96, Hanrei Taimuzu No. 864, p. 267 (upholding jurisdiction of a New York state court, partly based on the place of
performance because according to the contents of the contract, the judgment
debtor’s obligation of performance was completed in New
York)), the place of tort (Article 5, item (ix)) (Tokyo District Court, Judgment, January 14, 1994, Hanrei Jiho, No. 1509, p. 96, Hanrei Taimuzu No. 864, p. 267 (upholding jurisdiction of a New York state court, partly based on the place of
tort because the judgment debtor and a person domiciled in New York jointly
violated the contract and caused damage in New York); Tokyo District Court, Hachioji Branch, Judgment,
February 13, 1998, Hanrei Taimuzu No. 987, p. 282 (upholding
jurisdiction of a California state court)), forum of related actions (Article
7) (Tokyo District Court, Judgment, January
14, 1994, Hanrei Jiho, No. 1509, p. 96, Hanrei Taimuzu No. 864,
p. 267 (upholding jurisdiction of a New York state court, partly based on
the co-defendant’s domicile in New York); Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853 (upholding
jurisdiction of the Hong Kong High Court over the Second Case because that was
a counterclaim of the First Case or closely related to its cause of action;
with regard to the Third Case, which was in nature a third party proceeding
known in common law, upholding jurisdiction thereof because the Second and the
Third were based on the same cause of substantive law, and have a close
connection with each other; lastly, upholding jurisdiction thereof over the
Fourth Case because it was to be a counterclaim in relation to the Third
Case)), appearance by the
defendant (Article 12), and agreement of forum selection (Article 11) (See, Nagoya
District Court, Judgment, February 6, 1987, Hanrei Jiho, No. 1236, p.
113). Concerning foreign judgments regarding business activities, three
judgments were refused enforcement because of lack of jurisdiction: a judgment
of the U. S. District Court for the District of Minnesota (Osaka District Court, Judgment, March 25, 1991, Hanrei
Jiho No. 1408, p. 100, Hanrei Taimuzu No. 783, p. 252, affirmed
by Osaka
High Court, Judgment, February 25, 1992, Hanrei Taimuzu No. 783 p. 248)
(denying jurisdiction on the grounds that Minnesota was not the place of
performance because under CIF Kobe, Japan, the judgment debtor’s obligation of performance was completed in Japan)), a judgment of
the High Court of Justice of England (Tokyo
District Court, Judgment, January 31, 1994, Hanrei Jiho, No. 1509, p.
101, Hanrei Taimuzu No. 837, p. 300 (as to the second case,
denying jurisdiction of an English court on the grounds that only the
place of performance determined by the law applicable to the contract between
the parties did not constitute sufficient base for jurisdiction of the
rendering court)), and a judgment of the Paris Commercial Court of France (Tokyo
District Court, Judgment, May 2, 1972, Kaminshu Vol. 23, Nos. 5-8, p.
224 (denying jurisdiction of a French court, because place of performance
should not be considered as grounds for international jurisdiction)).
3. Service
(1) Purpose
A
defendant should be given the opportunity to defend himself or herself in the proceedings. As to the notice requirement, Article 118(ii)
provides: “the unsuccessful defendant received service of a
summons or order as required for the commencement of proceedings (except by
publication on a bulletin board at the court or by similar methods), or appeared in the action without receiving such service.”
As
to the meaning of “service of a summons or order as
required for the commencement of proceedings,” the
Supreme Court, in the case of 1998 (Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853),
held that:
“[it] does not have to comply with the laws and rules of our civil
procedure. But it is required that the process serving give the defendant actual
knowledge of the commencement of action and not hinder the exercise of his/her
right to defense. In addition, the viewpoint of realizing clear stable
procedure leads to the following interpretation of Article 118(ii). Where a
treaty is concluded regarding judicial cooperation between our country and the
judgment country for the serving of judicial documents and it is required that
the serving of judicial documents necessary to commence an action be undertaken
in accordance with the methods provided by that treaty, process serving that
does not abide by the methods of that treaty does not satisfy the requisite
mentioned in Article 118(ii).”
(2) Requirement
That Service Complies with Treaties Applicable
As
the Supreme Court requires, if a rendering country has a treaty with Japan
applicable to service abroad, such as the 1965 Hague Convention on the Service
Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters
and the 1954 Hague Convention on Civil Procedure, the service of process must
comply with them. In that Supreme Court case, direct delivery by a person who
was asked personally to do so by the judgment debtors was considered invalid
because it was not permitted by any applicable treaty or convention, including
the Hague Service Convention; however, the fulfillment of the requirement of
Article 118(ii) was ensured on the grounds that the judgment debtors responded
to the action in the Hong Kong High Court without receiving adequate notice. As to the
words in Article 118(ii) “appeared in the action without
receiving such service,” the Supreme Court (Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853) held
that “[it] is different from the response to the merits
which effectuates the jurisdiction based on the defendant’s response on the merits. It means that a defendant is given an
opportunity to defend and actually takes measures of defense in the court. It
includes cases where a defense to contest jurisdiction is submitted.”
(3) Service by Mail
from a Contracting State to the Hague Service Convention
How
about service by mail on a defendant in
One might suppose that service by mail on a defendant
in
“…we may come to wonder why the Japanese government has not declared
its opposition to the use of the method of sending judicial documents by postal
channel directly to persons abroad, pursuant to Article 10(a) of the Convention on the Service Abroad of Judicial and
Extrajudicial Documents in Civil or Commercial Matters. Such (attitude of
our government) could only imply its recognition of the effect de facto of the act of notice by postal channel, and not to be understood as having
positively introduced a new method of service which foreign States are to
follow.”
This
reasoning is understood to take into consideration a statement by the Japanese
delegation issued at a meeting of the Hague Conference on Private International
Law Special Commission on April 17-20, 1989 (See, Hague Conference on Private
International Law: Special Commission Report on the Operation of the Hague
Service Convention and the Hague Evidence Convention, reprinted in 28 Int'l Legal
Materials 1556, 1561 (1989)).
"Japanese position on Article 10
a of the Hague Convention on the Service Abroad of Judicial and Extrajudicial
Documents in Civil or Commercial Matters: Japan has not declared that it
objects to the sending of judicial documents, by postal channels, directly to
persons abroad. In this connection, Japan has made it clear that no objection
to the use of postal channels for sending judicial documents to persons in
Japan does not necessarily imply that the sending by such a method is
considered valid service in Japan; it merely indicates that Japan does not
consider it as infringement of its sovereign power."
Based
on this statement of the Japanese Government, the U.S. Department of State (See United States Department of State Opinion Regarding the Bankston Case and Service by Mail to Japan under the Hague Service Convention, reprinted in 30 Int’l Legal Materials
260, 261 (1991)) considers that “a judgment by a court
in the United States based on service on the defendant in Japan by mail, while
capable of recognition and enforcement throughout the United States, may well
not be capable of recognition and enforcement in Japan by the courts of that
country.”
Views
of authors are divided on this point. This problem has not been settled yet.
Anyway, persons who will seek the enforcement in
4. Public Policy
(1) Notion
According
to Article 118(iii) of the CCP, a foreign judgment is not recognized or
enforced in Japan if it is contrary to “public order or good
morals,” in other words, public policy (ordre public), in Japan. “[P]ublic order or good morals in Japan” means the essential fundamental principles or ideas underlying
Japanese law. The public
policy exception can be relied on only in exceptional circumstances. It cannot
be a basis for refusal of enforcement by itself that the law applicable to the
case or the procedures followed in the original court differ from those of
Article
118(iii) requires that not only the contents of a foreign judgment but also the
proceeding by which a foreign judgment was established should not be contrary
to public policy. Accordingly, it is possible for a judgment debtor to invoke procedural defects, such as
unfair procedures, biased tribunals, violations of due process, lack of timely
notice, and judgments obtained by fraud to bar recognition and enforcement.
(2) Exceptional
Operation in Case Law
In court cases concerning foreign judgments regarding
business activities, the party opposing recognition or enforcement did actually
raise various issues as being contrary to public policy, such as:
a judgment of a
a judgment rendered by a California court against a
defendant on a breach of a contract to which the parties had not
obtained the necessary approval of the Japanese government violates the
Japanese Foreign Exchange Control Law (Tokyo
District Court, Judgment, September 6, 1969, Hanrei Jiho No. 586, p. 73, Hanrei Taimuzu No. 242, p. 263);
a
default judgment rendered by a U. S. court is a sanction against a party who
failed to attend at own deposition (Mito
District Court, Ryugasaki Division, Judgment, October 29, 1999, Hanrei
Taimuzu No. 1034, p. 270);
a summary judgment given by an Australian court did not
give a defendant the opportunity to defend himself or herself (Tokyo District Court, Judgment,
February 25, 1998, Hanrei Taimuzu, No. 972, p. 258);
a judgment of a
However, their contrariety to public policy was all
denied by Japanese courts, except for two issues. One involves the existence of
a Japanese judgment inconsistent with the foreign judgment and lis alibi pendens.
In this case, one lower court concluded to deny the enforcement of a Washington
State court judgment against a Japanese company because there existed an
inconsistent Japanese judgment rendered upon an action brought by the Japanese
company after bringing the U.S. action (See, Osaka District Court, Judgment,
December 22, 1977, Hanrei Taimuzu No. 361, p. 127.
But, some authors
criticize the conclusion of the Court). The other
involves the punitive damages, as seen below.
(3) Punitive
Damages Judgment
In
a case of 1997, the Supreme Court denied the enforcement of a punitive damages
judgment of a
The case can be summarized as follows.
Concerning the dispute arising from a lease agreement, the Superior Court of
the State of California rendered a judgment on the grounds of fraudulent acts
by the judgment debtors, ordering them to pay $425,251 as compensatory damages
and, in addition, one of them to pay $1,125,000 as punitive damages according
to Section 3294 of the California Civil Code. Then the judgment creditor, an
The Supreme Court held, in sum, that “the punitive damage system
under the California Civil Code has a clear purpose of punishment and general
prevention. Thus it is incompatible with the fundamental principles of the
Japanese system of compensatory damages because the Japanese system just
purports to restore the actual loss caused to a victim. In Japan, punishment of
the offender and general prevention are left to criminal or administrative
sanctions.”
It
seems that the conclusion of the Supreme Court is generally accepted by authors
in
5. Reciprocity
(1) Principles
The
last requirement is reciprocity. It requires that a foreign court would enforce
a similar judgment by a Japanese court if the situation were reversed in order
for
(2) Jurisdictions
Which Are Found to Satisfy the Reciprocity Requirement
Foreign judgments regarding business activities from the following
jurisdictions have been held to satisfy the reciprocity requirement:
Hong
Kong (China) (Supreme
Court, Judgment, April 28, 1998, Minshu Vol. 52, No. 3, p. 853 concludes that reciprocity is assured between Japan and Hong Kong before it
reverted to the People’s Republic of China on July 1, 1997,
while there is a lower court judgment which refused the enforcement of a Hong
Kong judgment because of lack of reciprocity between Japan and Hong Kong.
According to the view of one author, reciprocity is also assured between Japan
and Hong Kong Special Administrative Region of the People’s Republic of China after the reversion)
Switzerland
(Tokyo District Court, Judgment, November 13,
1967, Kaminshu Vol. 18, No. 11, p. 1093)
England
(UK) (Tokyo District Court, Judgment, January
31, 1994, Hanrei Jiho, No. 1509, p. 101, Hanrei Taimuzu No. 837,
p. 300)
Hawaii
(USA) (Tokyo District Court, Judgment, October
24, 1970, Hanrei Jiho No. 625, p. 66, Hanrei Taimuzu No. 259, p.
254; Mito District Court, Ryugasaki
Division, Judgment, October 29, 1999, Hanrei Taimuzu No. 1034, p. 270)
New
York (USA) (Tokyo District Court, Judgment,
January 14, 1994, Hanrei Jiho, No. 1509, p. 96, Hanrei Taimuzu No. 864, p. 267)
Washington,
D.C. (USA) (Supreme
Court, Judgment, June 7, 1983, Minshu Vol. 37, No. 5, p. 611)
(3) Jurisdictions Which Are
Found Not to Satisfy the Reciprocity Requirement
In
the judgment of July 20, 1960 of the Tokyo District Court (Tokyo District Court, Judgment, July
20, 1960, Kaminshu Vol. 11, No. 7, p. 1522), a
Belgian judgment was refused enforcement because of lack of reciprocity. The
Court argued as the grounds for the lack of reciprocity that, unless there was
a treaty on mutual recognition and enforcement between
Quite
recently, in 2003, a remarkable decision was delivered by the Osaka High Court,
which refused the recognition of a judgment given by a High People’s Court of the People’s Republic of China
because of lack of reciprocity between Japan and China (See, Osaka
High Court, Judgment, April 9, 2003, Hanrei
Jiho No. 1841, p. 111, Hanrei Taimuzu No.1141, p. 270). In this case, a question arose whether the Chinese
judgment declaring that a successful party in Chinese litigation has the right
to make an investment in a Chinese corporation had effect in
* This note
originally appeared as Nozomi Tada, Enforcement of Foreign Judgments in Japan
Regarding Business Activities, Japanese Annual of International Law, No.
46, pp. 75-94 (2003).