Enforcement of Judgments 2019

Last Updated August 07, 2019

Japan

Law and Practice

Authors



Hashidate Law Office was established in 1980 and, since its founding, has earned an outstanding reputation as a law firm that provides high quality legal services to leading Japanese companies, banks and securities firms, particularly in the area of cross-border financial transactions. Currently, the Hashidate law office provides the world’s leading companies with a full range of legal services, from providing legal advice in the preparation and negotiation of agreements so as to avoid potential future disputes to assisting in commercial dispute resolution, including legal proceedings such as litigation and mediation. The Hashidate law office has 12 lawyers, including a foreign attorney, and provides their clients with rapid and effective legal coverage in most countries and areas through a global network of top-tier law firms.

In Japan, there is no publicly available information that identifies all of the assets owned by an individual. The only available public information a creditor can use to identify a debtor’s assets are  real property registrations and registrations of vehicles, aircraft and ships, but some information (such as where real property is located and in which administrative district a vehicle is registered etc) is required before a creditor can gain access to that information.

Besides the above-mentioned resources, a creditor can also use a request for information pursuant to Article 23.2 of the Attorney Act (hereinafter referred to as the ‘request for information’) as a means to identify another party’s assets. The procedures for the request for information are as follows: (i) a lawyer retained by a creditor for a specific matter requests the bar association to make inquiries with public offices or public/private organisations for the necessary information; (ii) the bar association examines the request; (iii) if the bar association approves the request, it will then request that the appropriate public offices or public/private organisations provide the necessary information; (iv) the lawyer then receives the information from the public office or public/private organisations through the bar association. However, please note that while organisations who receive a request for information are obligated to provide the necessary information, if they refuse to do so the bar association cannot compel them to provide that information and no fine can be issued in respect of non-compliance.

Requests for information are used over 210,000 times per year. It is most frequently used to acquire a debtor’s banking information. (Requests to financial organisations account for 28.9% of all requests.) It is convenient to request information from a bank because a creditor (through his or her lawyer) only needs to send a request to the head office of the bank asking that they provide information as to whether the debtor holds an account in any branches of the bank. Most head offices comply with requests for information.

Additionally, there is a measure a creditor can use to identify a debtor’s assets, but only after a creditor acquires a ‘judgment ordering performance’ from the court. Under the Property Disclosure Procedure (Article 197 of the Civil Execution Act), a creditor can force a debtor to disclose all of their assets. Information about property disclosure procedures are described in Section 2.4. Please note that, in Japan, there are no provisions regarding freezing orders within the meaning of the Civil Execution Act.

In Japan, there is no publicly available information that identifies all of the assets owned by an individual. The only available public information a creditor can use to identify a debtor’s assets are  real property registrations and registrations of vehicles, aircraft and ships, but some information (such as where real property is located and in which administrative district a vehicle is registered etc) is required before a creditor can gain access to that information.

Besides the above-mentioned resources, a creditor can also use a request for information pursuant to Article 23.2 of the Attorney Act (hereinafter referred to as the ‘request for information’) as a means to identify another party’s assets. The procedures for the request for information are as follows: (i) a lawyer retained by a creditor for a specific matter requests the bar association to make inquiries with public offices or public/private organisations for the necessary information; (ii) the bar association examines the request; (ii) if the bar association approves the request, it will then request that the appropriate public offices or public/private organisations provide the necessary information; (iv) the lawyer then receives the information from the public office or public/private organisations through the bar association. However, please note that while organisations who receive a request for information are obligated to provide the necessary information, if they refuse to do so the bar association cannot compel them to provide that information and no fine can be issued in respect of non-compliance.

Requests for information are used over 210,000 times per year. It is most frequently used to acquire a debtor’s banking information. (Requests to financial organisations account for 28.9% of all requests.) It is convenient to request information from a bank because a creditor (through his or her lawyer) only needs to send a request to the head office of the bank asking that they provide information as to whether the debtor holds an account in any branches of the bank. Most head offices comply with requests for information.

Additionally, there is a measure a creditor can use to identify a debtor’s assets, but only after a creditor acquires a ‘judgment ordering performance’ from the court. Under the Property Disclosure Procedure (Article 197 of the Civil Execution Act), a creditor can force a debtor to disclose all of their assets. Information about property disclosure procedures are described in Section 2.4. Please note that, in Japan, there are no provisions regarding freezing orders within the meaning of the Civil Execution Act.

Enforcing a judgment (compulsory execution) requires an ‘authenticated copy of the Title of Obligation’, which is provided to the prevailing party in accordance with (a) a final and binding judgment or (b) a judgment with the Declaration of Provisional Execution. The procedure for a compulsory execution is as follows: (i) a party obtains an authenticated copy of the Title of Obligation from a court that issued the final and binding judgment or the judgment with the Declaration of Provisional Execution; (ii) the prevailing party petitions for the grant of a Certificate of Execution to the court clerk of the court which issued the enforceable judgement (a petition for the grant of a Certificate of Execution must be in writing); and (iii) the prevailing party then petitions for compulsory execution with the Certificate of Execution.

The following discusses compulsory execution on claims for personal property including money as well as other types of execution.

The Civil Execution Act covers the compulsory execution of a claim, the compulsory execution of real property and the compulsory execution of personal property including money. In Japan, the most frequent execution is against a monetary claim (approximately 120,000 cases per year).

The compulsory execution of a monetary claim is generally subject to the following procedures: (i) an Execution Court seizes the losing party’s assets upon the prevailing party’s petition for a compulsory execution; (ii) an Execution Court liquidates the losing party’s assets; and (iii) an Execution Court delivers money to the prevailing party. However, some orders do not follow these procedures, eg where there is the Assignment Order pursuant to Article 159 of Civil Execution Act. An Assignment Order can be used if a debtor is subject to a final and binding judgment and has a monetary claim against a third party. In that case, the creditor can petition an Execution Court to issue an order assigning the debtor’s monetary claim against a third party to the creditor.

Furthermore, if the creditor who is awarded a final and binding judgment is unable to collect the entire sum awarded, the creditor may petition for the commencement of bankruptcy proceedings against the debtor. In bankruptcy proceedings, all of the debtor’s assets are liquidated and the proceeds divided among the registered creditors. However, bankruptcy proceedings may only be commenced if the debtor is ‘unable to pay debts or is insolvent’ (ie. the debtor is unable to pay his or her debts in full with his or her property). In many cases, the assets of the debtor will be used to pay the fees of the bankruptcy trustee followed by the satisfaction of secured claims on a priority basis. Consequently, an unsecured creditor is unlikely to receive much money through this process.

The cost of an application for enforcing a judgment against a monetary claim and real property is 4,000 Yen per petition (compulsory executions against personal property are free). In addition to above, the execution of a judgment against real property costs between 600,000 to 2,000,000 Yen as a prepayment for civil execution procedural expenses, and the execution of a judgment against personal property costs approximately 10,000 to 50,000 Yen as prepayment for the same expenses. The specific prepayment amounts depend on the amount of the claim. Furthermore, the petitioner is required to provide prepayment for postage stamps, the cost of certificate issuance and other related expenses. Moreover, the petitioner has the additional cost of having to pay legal fees to his or her lawyer(s).

With regard to enforcement of judgments, from application to the issue of an order of compulsory execution, approximately 60% are completed within three months. The time line for issuing an order to seize a debtor’s assets is case dependent.

In the case of an execution of a monetary claim, it is important that the petitioner determines what type of property they intend to seize. For instance, an execution of a monetary claim against a monetary claim is relatively easy to execute because there is no liquidation process, compared to an execution against real or personal property.

As mentioned above, the request for information and the property disclosure procedure are examples of post-judgment procedures for determining what assets the defendant possesses and where they are located. The following discusses the details of the property disclosure procedure.

The property disclosure procedure is as follows: (i) a party petitions the District Court having jurisdiction over the defendant’s address; (ii) the District Court as an Execution Court shall order the implementation of a property disclosure procedure against the defendant; (iii) the Execution Court summons the petitioner and the defendant to establish the property disclosure date; (iv) the defendant submits an inventory of his or her property; and (v) the defendant appears before the Execution Court on the property disclosure date and makes a statement regarding his or her property.

If the defendant does not appear on the property disclosure date or fails to make a statement on the status of his or her property, or makes a false statement regarding the status of his or her property, the defendant shall only be subject to punishment by a non-punitive fine of no more than 300,000 Yen. Therefore, the property disclosure procedure tends to be ineffective without the defendant’s cooperation. The property disclosure procedure is only used in approximately 700 cases per year.

The defendant has several options to challenge enforcement of  judgements, which include: (i) an appeal against a Disposition of Execution pursuant to Article 10 of the Civil Execution Act; (ii) an objection to a Disposition of Execution pursuant to Article 11 of the Civil Execution Act; (iii) an action to oppose execution pursuant to Article 35 of the Civil Execution Act; and (iv) an action to oppose a grant of a Certificate of Execution pursuant to Article 34 of the Civil Execution Act.

An appeal against a Disposition of Execution (see (i) above) may be filed against a judicial decision involving a civil execution procedure (subject to the Civil Execution Act). This procedure can only be used when special provisions exist that allow for such filings (for instance, Article 159-4 of the Civil Execution Act stipulates that an appeal against a Disposition of Execution can be filed against an order on the petition of the Assignment Order).

An objection to a Disposition of Execution (see (ii) above) may be filed against any Disposition of Execution where an appeal against a Disposition of Execution is not allowed. For instance, because Article 131 of the Civil Execution Act stipulates that certain personal property is prohibited from being seized by a compulsory execution procedure, the defendant would use this procedure if the plaintiff attempts to seize personal property that is prohibited from being be enforced.

The Action to Oppose Execution (see (iii) above) may be filed by a defendant who opposes the existence or contents of a claim related to a Title of Obligation. For instance, if the claim concerned a Title of Obligation that had already been satisfied by performance, set-offs or similar circumstances after the judgment was issued, the defendant may seek denial of compulsory execution using this procedure.

An action to oppose the grant of a Certificate of Execution (see (iv) above) may be filed by a defendant who asserts that the Certificate of Execution was issued illegally. For instance, in the case a Certificate of Execution based on a settlement record, and the precondition of the settlement has not been satisfied, this action may be pursued.

Only judgments ordering the performance of final and binding judgments and judgments with a declaration of provisional execution are enforceable. When a plaintiff obtains a declaratory judgment that confirms the defendant’s obligation to pay the plaintiff, a Japanese court cannot enforce it because it merely confirms a legal right belonging to the plaintiff. If the plaintiff wishes to enforce the declaratory judgment, he or she must file an action for performance before the courts.

Additionally, there are provisions regarding assets that cannot be seized (pursuant to Article 131 of the Civil Execution Act and Article 152 of the Civil Execution Act). Article 152 of the Civil Execution Act states the following cannot be seized by compulsory execution: (i) a portion equivalent to three-quarters of a claim pertaining to regular payments the defendant receives from a person other than the state or local public entity for the purpose of maintaining his or her living standards. (For instance, a claim for support pursuant to Article 881 of the Civil Code, such as family support payments); and (ii) a portion equivalent to three-quarters of a claim pertaining to compensation, wages, salary, retirement pension, bonus or any remuneration similar in nature. However, an Execution Court may order a change in the prohibited amount taking into consideration the living conditions of the defendant, or the plaintiff, and any other circumstances.

Article 131 of the Civil Execution Act lists the properties that are prohibited from being seized: (i) clothes, bedclothes, furniture, kitchen utensils, tatami mats and fittings that are indispensable to the defendant; (ii) food and fuel necessary for the defendant to live on for one month; (iii) money in the amount specified by a Cabinet Order that takes into account an average household's necessary living expenses for two months; and (iv) a registered seal or any other seal that is indispensable for an occupation or living.

There is no central register in Japan.

To enforce a foreign judgment in Japan, it must be approved as a valid judgment and the plaintiff must obtain an Execution Judgment from the District Court with jurisdiction over the defendant. Approval and enforcement of foreign judgments is stipulated within the Code of Civil Procedure and the Civil Execution Act; no international treaties/conventions prevent the application of the Code of Civil Procedure and the Civil Execution Act.

To obtain an Execution Judgment for a foreign judgment, it shall be confirmed that the foreign judgment satisfies the requirements listed in Article 118 of the Code of Civil Procedure as follows:

•       the foreign judgment is a final and binding judgment rendered by a foreign court;

•       the jurisdiction of the foreign court is recognised under the laws or conventions or treaties;

•       the defendant received service (excluding service by publication or any other service similar thereto) of a summons or order necessary for the commencement of the suit, or appeared in court without receiving such service;

•       the content of the judgment and the court proceedings are not contrary to public policy in Japan; and

•       a mutual guarantee exists.

The defendant cannot challenge the factual findings of the foreign judgment, but he or she may file an Action to Oppose Execution, as stipulated within Article 35 of the Civil Execution Act. The defendant may also allege grounds for opposing execution based upon circumstances that arose after the foreign judgment was rendered, such as the fact that defendant had already provided payment in full.   

A major legal issue for a plaintiff attempting to enforce a foreign judgment is whether or not the foreign judgment can satisfy the requirements stipulated in Article 118. This issue will be discussed further in Section 3.3 of this article.

Article 118 of the Code of Civil Procedure limits foreign judgment enforcement to ‘a final and binding judgment’. On 19 January 2006, the Tokyo District Court ruled that the application of the ‘final and binding’ rule depends on whether or not the foreign judgment can potentially be overturned on appeal within that foreign country. Thus, it does not include judgments that may be subject to cancellation, provisional seizure and provisional disposition in the foreign country.

Additionally, ‘judgment’ means the final judgment of a civil case in a foreign court where both parties were afforded due process, regardless of the name, procedure and formality of the case (decided by the Supreme Court on 28 April, 1998). Based upon this decision, a judgment may include a summary judgment from a common law legal system. It also may include an order/judgment of litigation expenses. However, a judgment does not include Execution Judgments and Execution Orders because these are not judgments/orders arising from a civil case, and the execution policy should be determined within the country where the plaintiff attempts to enforce the foreign judgment. Additionally, settlements, waivers and acknowledgements of claims and notarised documents are not judgments, because they are not final judgments in a foreign country.

Furthermore, in order to enforce a foreign judgment in Japan, it must be a ‘judgment ordering performance’ (Tokyo District Court decided on 2 September 1996). Even if the plaintiff obtains a Foreign Declaratory Judgment that confirms the defendant’s obligation to pay the plaintiff, a Japanese court will not enforce that declaratory judgment, as mentioned in Section 2.6.

Foreign judgments that do not satisfy the requirements of Article 118 of the Code of Civil Procedure shall not be enforced. As mentioned above, Article 118 covers the effect of a final and binding judgment rendered by a foreign court. In the event the foreign judgement does not satisfy all the requirements, the plaintiff cannot receive the Execution Judgment needed to enforce the judgment. The following provides an explanation of each of the requirements of Article 118.

First, Article 118 requires that a foreign judgment is a ‘final and binding judgment rendered by a foreign court’; this was explained in Section 3.2, thus we will refrain from explaining it again.

Second, Section 1 of Article 118 requires that the jurisdiction of the foreign court be recognised under the applicable laws, regulations, conventions or treaties to prevent duplicate execution from being enforced in Japan. According to the leading case, which the Supreme Court decided on 28 April 1998, the existence or non-existence of international jurisdiction is determined by whether or not it would be appropriate to approve the foreign judgment in a certain country (in this case, Japan), taking into consideration the facts and circumstances of each case and the territorial jurisdiction of the Japanese Code of Civil Procedure.

Third, Section 2 of Article 118 requires that the defendant should have received proper service (excluding service by publication or any other service similar thereto) of a summons or order necessary for the commencement of the lawsuit, or the defendant appeared in court in the case where he or she did not receive such service. The spirit of this section is to guarantee the due process of law. The service or order is required as (i) an appropriate formality which must be provided, and (ii) in a format that can be reasonably understood by the defendant. Regarding (i), Japan agreed to the Convention of 1 March 1954 on Civil Procedure of Hague Conventions and the Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters of Hague Conventions (Japan is also a member of similar bilateral treaties with such countries as the US and the UK.). In the event the plaintiff issues a summons using a method not mentioned in such treaties, the Supreme Court will determine that the plaintiff failed to satisfy Section 2 of this Article. For instance, although personal delivery is frequently used in the US, the Supreme Court ruled that personal delivery did not satisfy the requirements within Section 2 because there was no mention of personal delivery in the said treaties (Supreme Court decision, 28 April 1998). If the plaintiff is considering enforcement of a foreign judgment in Japan, but has filed his or her lawsuit in a foreign country, the plaintiff needs to pay particular attention to whether the service of a summons or order necessary for the commencement of the lawsuit is approved by the treaties. The plaintiff also must satisfy (ii), since it is a fundamental requirement of the first stage of litigation that the defendant understands what is being claimed so that he or she may assert their rights. In the event the defendant is Japanese, the defendant must be provided with a Japanese translation to satisfy the requirements of (ii), regardless of the defendant’s foreign language proficiency (the Tokyo High Court determined so on 18 September 1997). This translation shall be provided to the defendant at the time of service.

Fourth, Section 3 of Article 118 of the Code of Civil Procedure requires that: (i) the contents of the judgment should not be contrary to Japanese public policy and (ii) the court proceedings should not be contrary to Japanese public policy. The spirit of this section is to ensure that the foundations of the Japanese legal system are maintained. ‘Contrary to public policy’ is determined by considering: (a) any abnormality and its level of influence in Japan if the execution of the foreign judgment is approved and (b) the case’s overall implications within Japan. To provide some clarification on this matter, there are two leading cases that explain the requirements of this section. The first case helps to explain (i), the content of the judgment. In the US and other common law countries punitive damages are allowed, but not so in Japan. Therefore, the Supreme Court denied an application for an Execution Judgment for punitive damages on 11 September 1997. The Supreme Court stated that Japanese damage claims are limited to recovering actual damages, but the character of punitive damages is similar to fines used as a criminal punishment. The second case was in relation to (ii), the court proceedings of the judgment. In the Osaka District Court, the plaintiff requested an Execution Judgment for a foreign judgment, but the same case was also litigated in Japan and it resulted in a ruling contrary to the foreign judgment. Although the foreign judgment occurred first, the Osaka District Court ruled in favour of the Japanese judgment. The Osaka District Court did not grant the Execution Judgment for the foreign judgement because of the negative impact it would have on the Japanese legal system. Some scholars criticised the decision, arguing that Japanese court should have honoured the foreign judgment, which was made final and binding before the matter was adjudicated by the Japanese court. This legal issue does not appear to be settled and it is expected that this will be further developed in future court cases.

Finally, Section 4 of Article 118 of the Code of Civil Procedure requires that a mutual guarantee of enforcement exists between the foreign country and Japan. The spirit of this section is to ensure reciprocity and it is strictly interpreted to establish and maintain effective international dispute resolutions. On 7 June 1983, the Supreme Court stated that whether a mutual guarantee of enforcement of judgments exists or not is determined by considering whether a similar judgment would be enforced in the foreign country. The Japanese courts denied Execution Judgments for foreign judgments from Belgium (Tokyo District Court, 20 July 1970) and China (Osaka High Court, 9 April 2003) due to their failure to satisfy the requirements of Section 4.

In order to enforce a foreign judgment that is final and binding, the plaintiff must file an action seeking an Execution Judgment of a foreign judgment (Article 24 of the Civil Execution Act). By the filling, the jurisdiction is transferred from the foreign jurisdiction that issued the judgment to the Japanese District Court that has jurisdiction over the defendant. In these procedures, it needs to be proven that the foreign judgment is final and binding and that it satisfies the requirements of Article 118 of the Code of Civil Procedure (Section 5 of Article 24 of the Civil Execution Act).

After obtaining the Execution Judgment, the plaintiff must then obtain a Certificate of Execution from the court clerk of the Execution Court (Section 1 of Article 26 of the Civil Execution Act). In the event the plaintiff obtains both the Execution Judgment and the Certificate of Execution, the plaintiff may also petition for execution before the same court. Because the procedures for execution are basically the same as a Japanese domestic judgement, please refer to Section 2.2.

To enforce a foreign judgment, in addition to the legal fees required to hire a lawyer and the costs, there is a filing fee for the Execution Judgment. For the typical domestic lawsuit, there is a filing fee of 1% of the damages sought up to 1,000,000 Yen, with a sliding scale reduction in the percentage of the damages sought above 1,000,000 Yen. However, because an Execution Judgment on a foreign judgment is different from a domestic lawsuit, the filing fee for an Execution Judgment on a foreign judgment is half of the litigation filing fee for a typical domestic lawsuit. Regarding those other costs following the grant of an Execution Judgment, these are the same as domestic cases.

Regarding the time needed to enforce a foreign judgment, we could not find any public data specifying the time line for the execution of foreign judgments. However, it takes significantly more time than domestic case because it requires an Execution Judgment, which is not necessary for the enforcement of a domestic judgment.

The defendant has an opportunity to challenge the enforcement of a foreign judgement when the plaintiff petitions for the Execution Judgment. As already mentioned in Sections 3.2 and 3.3, the foreign judgment must be final and binding and must satisfy the requirements laid down by Article 118 of the Code of Civil Procedure. The defendant may allege that the foreign judgment does not satisfy such requirements. Also, the defendant can allege facts relating to a change in circumstances or cessation of the plaintiff’s initial claim on or after the legal action was adjudicated by a competent court (so the Tokyo District Court decided on 13 October 1965). However, please note that the defendant has only one opportunity to make such an argument during all opposition proceedings, which means the defendant may not make the same argument in subsequent opposition proceedings such as at an Action to Oppose Execution (Article 35 of the Civil Execution Act). For a detailed explanation regarding Action to Oppose Execution, please refer to Section 2.5.

In 1961, Japan became a signatory to the New York Convention, subject to a declaration of reciprocity from the country where the arbitration occurred (Section 3 of Article 1 of the New York Convention). However, because Section 3 of Article 3 of the Arbitration Law of Japan allows the enforcement of an arbitration award in Japan regardless of whether the arbitration occurred within or outside of Japan, a declaration of reciprocity is no longer required. Additionally, Japan also agreed to the Geneva Convention and has bilateral treaties with other countries. Based upon each of the laws and treaties mentioned above, a qualified person who desires enforcement of an arbitration award (hereinafter referred to as the ‘claimant’) is guaranteed the enforcement of an arbitration award in Japan.

However, since there are no details in the treaties regarding the enforcement procedures, the claimant must petition for enforcement in accordance with the Arbitration Act of Japan. To enforce an arbitration award, the claimant must: (i) obtain an Execution Order; (ii) obtain a Certificate of Execution; and (iii) petition for compulsory execution. There are some legal issues with regard to obtaining the Execution Order. An arbitration award has the same effect as a final and binding judgment in Japan (paragraph 1 of Article 45 of the Arbitration Act of Japan). However, in order to obtain the Execution Order, the arbitration award needs to satisfy the requirements stipulated in each section of paragraph 2 of the Arbitration Act of Japan. Each requirement will be discussed in Section 4.3 of this article.

There are additional legal issues regarding enforcement of arbitral awards in Japan, which include the extent of arbitral award enforcement in Japan, the process of enforcing arbitral awards and challenging the enforcement of arbitral awards, which are discussed in Sections 4.2, 4.4 and 4.6.

Paragraph 1 of Article 40 of the Arbitration Act of Japan stipulates that an arbitration procedure shall terminate when an arbitration award or a decision to terminate the arbitration procedures is issued. This is based upon paragraph 1 of Article 32 of the UNCITRAL Model Law on International Commercial Arbitration. In this model, an arbitration award, as defined in the Arbitration Act of Japan means ‘the final award’. Thus an arbitral award includes: a final award, a partial award, an interim award, a consent award, a default award and an additional award. However, an arbitration award does not include provisional measures/orders and conservatory measures/orders, because these are not final awards.

Additionally, for the same reason mentioned in Section 3.2 above, the claimant has to obtain a final award that specifies the obligation of the losing party (hereinafter referred to as the ‘respondent’) to pay the award. Even if the claimant obtains a final award, this merely confirms the existence of a monetary claim; it is not sufficient to obtain an Execution Order from a Japanese Court.

To enforce an arbitration award in Japan, the claimant must obtain a final award from the tribunal and an execution order from the District Court. In the event the claimant obtains a final award, while such award has the same effect as a final and binding judgment (Section 1 of Article 45 of the Arbitration Act of Japan), the claimant cannot enforce an arbitration award if he or she cannot obtain an Execution Order.

Arbitration awards that do not satisfy the requirements of paragraph 2 of Article 45 of the Arbitration Act of Japan will be refused and not be granted an Execution Order (paragraph 8 of Article 46 and Article 45 of the Arbitration Act of Japan).

Under Article 45, the Execution Order will be denied if:

•       the arbitration agreement is invalid due to a party’s limited capacity (a minor, adult ward and a person under curatorship);

•       the arbitration agreement is invalid on grounds other than the limited capacity of a party pursuant to the laws and regulations the parties agreed to apply to the arbitration agreement. (If the parties have not reached an agreement, the laws and regulations of the country where the arbitration occurred apply.);

•       the opposing party did not receive notice of the procedures for appointing arbitrators and/or the arbitration procedures as required under the laws and regulations of the country in which the arbitration occurred. (However, the parties may agree to different notice procedures other than those required under the laws and regulations of the country in which the arbitration occurred, provided the agreed upon notice procedures do not violate public policy.);

•       the opposing party was not permitted to provide a defence in the arbitration procedures;

•       the arbitration award contains a decision on matters that lie beyond the scope of the arbitration agreement or the scope of the petition submitted to arbitration tribunal;

•       the composition of the arbitration tribunal or the arbitration procedures are in violation of the laws and regulations of the country in which the place of arbitration occurred (However, the parties may agree to a different composition of the arbitration tribunal or arbitration procedures, other than what is required under the laws and regulations of the country in which the arbitration occurred, provided the agreed upon composition of the arbitration tribunal or arbitration procedures do not violate public policy.);

•       the award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the laws of which, the award was made;

•       the petition filed during arbitration procedures pertains to a dispute which may not be subject to an arbitration agreement pursuant to the provisions of Japanese laws and regulations; or

•       the content of the arbitration award is contrary to Japanese public policy.

These requirements are substantially the same as the UNCITRAL Model Law on International Commercial Arbitration and the New York Convention.

As already mentioned in Section 4.1, in order to enforce an arbitration award in Japan the claimant must: (i) obtain an Execution Order; (ii) obtain a Certificate of Execution; and (iii) petition for compulsory execution.

To obtain an Execution Order, the claimant must submit: (a) a copy of the written arbitration award; (b) a notarisation document proving that the contents of (a) are the same as those of the written arbitration award; and (c) a Japanese translation of the written arbitration award. While the New York Convention requires submission of the original agreement or a duly certified copy of an ‘agreement in writing’ (paragraph 1(b) of the Article 4 of the New York Convention), this is not required under the Arbitration Act of Japan. The jurisdiction for the Execution Order belongs to: (i) the District Court determined by agreement between the parties; (ii) the District Court which has jurisdiction over the place of arbitration; (iii) the District Court that has jurisdiction over the respondent; or (iv) the District Court that has jurisdiction over the location of the subject matter of the claim or the property to be seized from the respondent.

After obtaining an Execution Order, the claimant must obtain a Certificate of Execution from the Court Clerk of an Execution Court (Section 1 of Article 26 of the Civil Execution Act). Once the claimant obtains the Execution Order and the Certificate of Execution, the claimant must then seek a petition for execution before the District Court having jurisdiction.

To enforce an arbitration award, in addition to legal fees for lawyer and the costs we mentioned above in Section 2.3, there is a filing fee of 4,000 Yen for an Execution Order.

Regarding the time needed to enforce an arbitration award, according to the available materials there were 74 cases related to the enforcement of arbitration awards in the Tokyo District Court from 1 March 2004 to 31 December 2016. This amounts to approximately 50% of the total number of arbitration cases in all District Courts in Japan during that period. Of these 74 cases, 34 cases pertained to the Execution Orders and 23 received an Execution Order from the court; the claimant withdrew his or her request in 7 instances; 2 petitions were pending at the time the data was published; 1 case was listed as ‘other’; and only 1 case resulted in the denial of an Execution Order. Approximately 50% of claimants obtained an Execution Order within six months of their application. Also, 75% of claimants obtained an order within one year. In cases that took over one year, the respondents had attempted to set aside the arbitration award, which is why it took a long time to secure an award. Please note that claimants will still need further time in order to execute the arbitration award because there are still further procedures to accomplish, such as obtaining a Certificate of Execution and the filing of the execution.

The respondent can challenge enforcement when the claimant submits his or her petition for an Execution Order. As already mentioned in Section 4.2, since the arbitration award refers to the final award of a tribunal, during the Execution Order process the respondent may argue that the arbitration award is not a final award. Additionally, as already mentioned in Section 4.3, in the event the respondent proves Section 1 through Section 7 of paragraph 2 of Article 45 of the Arbitration Act of Japan or the court finds and acknowledges the facts of Section 8 or Section 9 of the same paragraph, the claimant cannot obtain an Execution Order from the court. Furthermore, in the event the claimant’s request for an Execution Order is denied or the respondent’s objection to the Execution Order is granted, the claimant or the respondent may file an immediate appeal to the High Court and seek to dismiss such an order (Section 10 of Article 46 and Section 8 of Article 44 of the Arbitration Act of Japan). Even if the claimant’s request is denied or the respondent’s objection is granted by the High Court, the claimant or the respondent can file a special appeal against the ruling to the Supreme Court (Article 336 of the Code of Civil Procedure) or an appeal, with permission, to the Supreme Court (Article 337 of the Code of Civil Procedure).

Additionally, during the Execution Order procedure, the respondent can allege facts relating to a change in circumstances or a cessation of the initial claim on or after the tribunal adjudicated its award. However, please note that the respondent has only one opportunity to make that argument during all opposition proceedings, which means the respondent may not make the same argument at a later stage, such as at an Action to Oppose Execution (Article 35 of the Civil Execution Act). Regarding the Action to Oppose Execution, please refer to Section 2.5 of this article.

Separately, and this is not directly related to challenging enforcement, the respondent can petition for the setting aside of an arbitration award, as long as the arbitration was held in Japan (Section 1 of Article 3 and Article 44 of the Arbitration Act of Japan). However, please note that the petition to set aside an arbitration award cannot be filed after three months have elapsed since the respondent received a copy of the written arbitration award or if the Execution Order, as set forth in Article 46, becomes final and binding.

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Hashidate Law Office was established in 1980 and, since its founding, has earned an outstanding reputation as a law firm that provides high quality legal services to leading Japanese companies, banks and securities firms, particularly in the area of cross-border financial transactions. Currently, the Hashidate law office provides the world’s leading companies with a full range of legal services, from providing legal advice in the preparation and negotiation of agreements so as to avoid potential future disputes to assisting in commercial dispute resolution, including legal proceedings such as litigation and mediation. The Hashidate law office has 12 lawyers, including a foreign attorney, and provides their clients with rapid and effective legal coverage in most countries and areas through a global network of top-tier law firms.

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