The measures available to a creditor for identifying the assets of another party differ depending on whether a judgment in favour of the creditor has already been rendered.
The ownership of certain types of properties is registered with the relevant authorities, and this information is publicly available. However, a person is able to reach such information only in limited circumstances.
For example, information on land parcels and buildings/houses, including the name of the owner, is registered with the real property registry at the Legal Affairs Bureau and is accessible by any person by obtaining a copy of the registration. However, the real property registration can be accessed by specifying the address of the property, but it is not possible to search by specifying the information of the owner. In other words, one can know who owns a specific piece of real property but cannot know what real properties a specific person owns through this system.
Request for information to the Bar Association
Under the Lawyers Act, a Japanese lawyer can request from any public or private organisation/entity, via a relevant Bar Association, disclosure of documents and information necessary for the lawyer to collect evidence and conduct investigations relating to his or her representation. Occasionally, however, the recipient of such request refuses to disclose any information due to confidentiality obligations. By way of example, banks usually do not disclose any information regarding their customers, including a customer's deposit balance, unless the customer consents to the disclosure.
Provisional attachment order
Provisional attachment is a preliminary relief to secure the subsequent enforcement of an eventual monetary judgment by prohibiting the debtor from disposing of its assets. If a creditor can substantiate an underlying claim and demonstrate an imminent risk that the assets would likely be disposed of before the judgment is enforced, the court will issue an ex parte provisional attachment order. However, provisional attachment is not a measure to search out the debtor’s assets; rather, the creditor must identify the assets to be preserved.
An exceptional circumstance in which provisional attachment may be utilised to find out the debtor’s assets is where the court issues a provisional attachment order on receivables owed to the debtor by a third party. The third party would be required to confirm certain information regarding the receivables owed, including the amount thereof. By virtue of this confirmation, the creditor may be able to identify those specific receivables before initiating a lawsuit.
Once a monetary judgment in favour of the creditor becomes final and irrevocable, or comes with a declaration of provisional execution (explained in 2.1 Types of Domestic Judgments), the judgment creditor can take advantage of the asset disclosure system under the Civil Execution Act to obtain information regarding the assets that the judgment obligor owns. Under the Civil Execution Act, a judgment creditor may request for a court order compelling the judgment obligor to disclose his or her property, by demonstrating certain prescribed matters including, for example, that the judgment creditor could not or would not be able to collect money from known assets of the judgment obligor. The judgment obligor’s failure to comply with the compelling order is punishable by imprisonment up to six months and/or a fine of up to JPY500,000.
Moreover, a judgment creditor may request a court order against third parties to compel disclosure of certain information regarding the assets of the judgment obligor. For example, the judgment creditor may collect information about bank deposits, listed stocks, and government or corporate bonds from banks and other financial institutions, and information about real property owned by the judgment debtor from a relevant registry office.
There are three categories of final judgments that Japanese courts are empowered to render on the merits of the case in civil litigation.
Judgment for performance (kyufu hanketsu)
This is an ordinary type of judgment for the court to order the losing defendant to perform (or not to perform) certain acts, such as payment of damages, repayment of loans, eviction from premises, delivery of goods, and restitution. For a monetary judgment, a court may render a declaration of provisional execution along with the judgment in favour of the plaintiff, in which case the plaintiff is entitled to execute the judgment before it is finalised even if the losing defendant appeals the judgment.
Declaratory judgment (kakunin hanketsu)
This type of judgment is a court declaration regarding rights and obligations and other legal relationships between the plaintiff and the defendant. A declaratory judgment is literally and merely a declaration and cannot be enforced. Thus, in many cases, the plaintiff should seek an ordinary judgment for the defendant’s performance.
Formative judgment (keisei hanketsu)
The purpose of this type of judgment is to create and form rights and obligations or legal relationships between the plaintiff and the defendant. A formative judgment is available only in limited cases prescribed by law, including revocation of a shareholders' resolution made in a shareholders' meeting under the Companies Act.
An interlocutory judgment may be rendered at the sole discretion of the court prior to the final judgment when an independent defence or other interlocutory dispute is considered ripe for decision. Unlike a summary judgment available in some other jurisdictions, an interlocutory judgment is not a final judgment on the merits of the case and therefore cannot be enforced.
For monetary claims, a creditor may seek the following preliminary reliefs ex parte to preserve assets of the debtor, prior to initiating a lawsuit for the same claim:
Pursuant to the Civil Execution Act, a final and irrevocable domestic judgment and a judgment with a declaration of provisional execution may be enforced by filing, with the execution court or an execution officer, an authenticated copy of the judgment accompanied by a certificate of execution issued by the court clerk as well as a certificate verifying that the judgment has been served upon the judgment obligor. The enforcement process differs depending on whether the judgment is for a monetary claim or a non-monetary claim and the type of assets involved.
For Monetary Claims
The judgment creditor may collect the judgment sum from any of the assets owned by the judgment debtor except for certain assets prescribed by law (including requisites for life and a certain portion of the debtor’s salary).
For receivables, the execution court issues an attachment order that prohibits a third-party debtor from repaying any part of the receivables to the judgment debtor. The judgment creditor may elect to either receive repayment from the third-party debtor or (in case another creditor attaches the same receivables) have the receivables assigned and transferred from the judgment debtor to the judgment creditor by another court order.
Real property and personal property are attached by a court order and auctioned off. The sales proceeds are paid to the judgment creditor in an amount up to the judgment sum.
For Non-monetary Claims
If the judgment is for delivery of or eviction from real property, compulsory execution is carried out by an execution officer compulsorily and physically visiting the site and releasing the real property from the debtor’s possession. In most cases, the execution officer first makes a “demand for surrender” specifying the time limit for the delivery/eviction (which must be one month or longer) to encourage the judgment debtor to surrender the property by himself or herself within the time limit.
For a delivery of “movable” property (a concept similar to “personal property” or “chattel” under Anglo-American law), an execution officer compulsorily and physically confiscates the movables from the judgment debtor and delivers the same to the judgment creditor. A “demand for surrender” is not made for movable property.
Other performance by the judgment debtor may be carried out by way of third-party substitute. If the judgment debtor’s obligation is to refrain from doing some specific act, the execution court orders the judgment debtor to reverse the outcome of the debtor’s actions at his or her own expense or take appropriate measures for the future. If the nature of the obligation is not suitable for such measures, the execution court may order the judgment debtor to pay to the judgment creditor a certain sum of money in the event that the judgment debtor fails to perform the judgment within a certain period.
The time and cost required for compulsory execution of a judgment largely differ depending on the type of actions involved.
For example, attachment of receivables only requires a filing fee of JPY4,000 and postal costs. Attachment and public auction of real property requires procedural costs of approximately between JPY500,000 and JPY2,000,000 determined in accordance with a certain formula employed by each court of jurisdiction as well as the registration and licence tax in an amount equal to 0.4% of the value of the real property, on top of the filing fee of JPY4,000 and postal costs.
Regarding the time required, obtaining a court order for attachment of receivables typically requires a couple of weeks. Attachment and public auction of real property takes a year or longer as it requires investigation and valuation of the property by a real-estate appraiser before the auction process commences. In light of the time and cost necessary for the procedures, attaching receivables is generally believed to be the most efficient option to enforce a judgment for a monetary claim.
In Japan, there is no post-judgment procedure for determining what assets the defendant holds and where they are located. The judgment creditor must identify assets that the judgment debtor holds when filing for compulsory execution.
Once a judgment becomes final and irrevocable, the judgment debtor cannot challenge the judgment itself to resist the enforcement thereof, whether based on the merits or on procedural issues, except for a “retrial” under the Code of Civil Procedure based on limited prescribed grounds such as representation by an unauthorised attorney, or false testimony or forgery of evidence relied upon in the judgment. The execution court may, upon petition, issue an order to stay compulsory execution of the judgment pending such a retrial, with or without requiring a security deposit (the amount of which is determined by the court).
Notwithstanding the above, a judgment debtor may challenge enforcement of a finalised judgment based on grounds that occur after the hearing procedures for the judgment, by filing a separate action called “action to oppose execution” pursuant to the Civil Execution Act. The grounds include, among others, repayment and satisfaction of the debt, set-off, and lapse of a ten-year period from the finalisation of the judgment. The execution court may, upon petition, issue an order to stay compulsory execution of the judgment pending the action to oppose execution, with or without requiring a security deposit (the amount of which is determined by the court).
Finally, with respect to a judgment with a declaration of provisional execution, a judgment debtor may file a petition for a court order staying enforcement of the judgment if the defendant appeals the judgment.
Among the three types of judgment explained in 2.1 Types of Domestic Judgments, declaratory judgments and formative judgments are not enforceable. As for judgment for performance, where the parties have agreed not to enforce, the court must declare in its judgment that the judgment is not enforceable.
There is no organised system in Japan to register judgments.
Japan is not a signatory to any international treaties or conventions for the enforcement of foreign judgments. Japanese law, however, does provide that judgments rendered by foreign courts can be enforced in Japan, provided certain statutory prerequisites are met.
Judgment of Enforcement
Articles 22 and 24 of the Civil Execution Act establish the framework under which a foreign judgment may be enforced in Japan. Article 22 provides that a foreign judgment shall be enforced if, among other things, it is a “judgment rendered by a foreign court… accompanied by an irrevocable and final judgment of execution ['shikko hanketsu']”. A judgment of execution is a judgment rendered by the Japanese court recognising and directing enforcement of a foreign judgment. It is therefore necessary to obtain a judgment of enforcement first from a Japanese court before a foreign judgment can be enforced in Japan.
To obtain a judgment of execution, a party is required to file a lawsuit in a Japanese court. Article 24 of the Civil Execution Act provides that a “judgment of execution shall be rendered without inquiring into the merits of the decision concerned” (Paragraph 2), and a lawsuit seeking a judgment of execution “shall be dismissed when it cannot be demonstrated that the judgment of the foreign court has become final or when the foreign judgment does not meet the conditions enumerated under each item of Article 118 of the Code of Civil Procedure” (Paragraph 3).
Prerequisites under Article 118 of the Code of Civil Procedure
In this respect, Article 118 of the Code of Civil Procedure provides as follows:
"The judgment of a court of a foreign country which has become final and conclusive shall be valid only when the following conditions have been met:
(1) The jurisdiction of the foreign court is recognised by law or treaty;
(2) The losing defendant duly received service of summons or other order necessary to commence the action, by means other than service by publication or any other service similar thereto, or voluntarily entered appearance in the proceedings;
(3) The contents of the judgment and the court proceedings are not contrary to the public order or good morals in Japan; and
(4) There is reciprocity."
To summarise, in order to enforce a foreign judgment in Japan, the litigant needs to demonstrate that the judgment of the foreign court has become final and conclusive, and that the four prerequisites as stipulated by Article 118 of the Code of Civil Procedure have been met.
In Japan, the approach to enforcement of foreign judgments does not vary for different types of judgments.
On a side note, with respect to foreign insolvency proceedings, there is the Act on Recognition of and Assistance for Foreign Insolvency Proceedings, and foreign insolvency proceedings are recognised under certain prerequisites stipulated therein.
Lack of Finality/Judiciality
The first category of foreign judgments that will not be enforced in Japan are judgments that are not a “judgment of a court of a foreign country which has become final and conclusive.” Accordingly, if the foreign judgment can still be appealed, it cannot be enforced in Japan. A foreign administrative decision/order is not enforceable either, since it is not a “judgment” of a “court” of a foreign country.
Lack of Jurisdiction
The second category is foreign judgments that do not meet the prerequisite set forth in Article 118, Item 1 of the Code of Civil Procedure, which provides that “[t]he jurisdiction of the foreign court is recognised by law or treaty.” For the purpose of this provision, the "law" referred to is Japanese law. The Supreme Court of Japan has held that, under Japanese law, whether the jurisdiction of the foreign court is recognised or not is determined in light of the rule of reason, applying the law of international jurisdiction under the Code of Civil Procedure of Japan and considering whether or not it is appropriate for Japan to recognise the particular foreign judgment under the specific circumstances of the case (Supreme Court Judgment of 24 April 2014). The jurisdiction of the foreign court in this context is called “indirect jurisdiction”.
The third category relates to the prerequisite set forth in Article 118, Item 2 of the Code of Civil Procedure: “The losing defendant duly received service of summons or other order necessary to commence the action, by means other than service by publication or any other service similar thereto, or voluntarily entered appearance in the proceedings.” In relation to this prerequisite, the Supreme Court of Japan has ruled that, if there is a treaty between the country of judgment and Japan which requires a certain manner of serving documents that should be followed for commencement of a lawsuit, service must be conducted in accordance with the treaty’s requirement in order to be valid service for purposes of this prerequisite under Item 2 of Article 118 (Supreme Court Judgment of 28 April 1998).
Whether service by direct postal mail is recognised as valid service under Article 118, Item 2 of the Code of Civil Procedure had long been an open issue. This was because, when the Japanese government entered into the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters of 1965 (“Hague Service Convention”), it did not lodge an objection under Article 10(a), which provides for the freedom to send judicial documents, by postal channels, directly to persons abroad. In December 2018, however, the Japanese government lodged an objection to Article 10(a) of the Hague Service Convention, by which service of process by direct postal mail is no longer permitted for serving defendants in Japan in lawsuits in foreign countries. Accordingly, for example, if a plaintiff filed suit in a signatory state of the Hague Service Convention against a Japanese defendant and served the Japanese defendant by direct postal mail, any default judgment delivered by the court of that foreign country will most likely be unenforceable in Japan, because the losing defendant would not be deemed to have “duly received service” under Article 118, Item 2 of the Code of Civil Procedure.
Public Order or Good Morals in Japan
The fourth category is foreign judgments that do not meet the prerequisite set forth in Article 118, Item 3 of the Code of Civil Procedure, which provides that “[t]he contents of the judgment and the court proceedings are not contrary to the public order or good morals in Japan”. For example, with respect to the “contents of the judgment”, there is a precedent from the Supreme Court of Japan holding that a part of a California court judgment ordering payment of punitive damages for the purpose of deterrence and sanction is against the public order of Japan, and therefore not enforceable (Supreme Court Judgment of 11 July 1997). Portions of foreign judgments awarding punitive damages are thus potentially unenforceable in Japan for violation of public order of Japan.
The fifth category of foreign judgments that will not be enforced in Japan are those delivered by the courts of a foreign country where there is no reciprocal treatment for the judgments of Japanese courts (Article 118, Item 4). Reciprocity in this context is deemed to exist if the courts of the foreign country would recognise, under their domestic law, the judgments of Japanese courts, and would do so upon conditions not substantially different from those stipulated by Article 118 of the Code of Civil Procedure (Supreme Court Judgment of 7 June 1983). There have been several lower court judgments which found that there is no reciprocity for Japanese court judgments in the People’s Republic of China. On the other hand, there have been judgments that recognised reciprocity in respect of many other countries, which include, for example, Australia, South Korea, Singapore, Germany, the UK, and many states in the USA such as the states of Illinois, California, Minnesota, New York and Nevada.
A party that wishes to enforce a foreign judgment in Japan must file a lawsuit seeking a judgment of execution; in principle, this would be a district court having the jurisdiction over the domicile of the judgment debtor (Article 24 of the Civil Execution Act).
If no challenges are raised on any of the grounds listed in Article 118 of the Code of Civil Procedure, the court will render a directly enforceable judgment. If, on the other hand, the defendant raises any objections on those grounds, the case proceeds like any other normal lawsuit. In a lawsuit seeking a judgment of execution, however, a court decision is often made mainly based on documents submitted by the parties (ie, legal briefs and written evidence), and witness examination is usually not necessary.
If the court finds that the prerequisites set forth in Article 118 of the Code of Civil Procedure are met, the court delivers a judgment of execution that allows the plaintiff to enforce the foreign judgment. It is possible for the court to issue a judgment of execution with respect to only a part of the foreign judgment. Like any other lawsuit, for a district court judgment which has granted or denied a judgment of execution, a losing party may file an appeal to a high court, and a losing party after the high court proceedings may file a final appeal to the Supreme Court.
Once a judgment of execution becomes final and irrevocable, the plaintiff can proceed to enforcement of a foreign judgment. The process thereafter is the same as enforcing domestic judgments.
The time and costs required for enforcing foreign judgments largely differ depending on the circumstances of each case. Upon filing of a lawsuit seeking a judgment of execution, a plaintiff is required to pay the advance filing fees, and the amount of such fees is largely proportional to the amount being claimed. Attorney’s fees are generally borne by the respective parties regardless of the outcome of the case; in other words, the successful party’s legal fees are not covered by the losing party.
There is no published statistical data regarding how long a lawsuit seeking a judgment of execution normally takes. In our experience, it would normally take around six months to two years from the filing of a lawsuit until a judgment is rendered by a district court. Appellate proceedings would usually take about another six months to one year.
Once a judgment of execution becomes final and irrevocable, a winning plaintiff may enforce a foreign judgment. The time required for compulsory execution would be the same as enforcement of a domestic judgment.
In a lawsuit seeking a judgment of execution, the court reviews whether or not the foreign judgment in question meets the prerequisites set forth in Article 118 of the Code of Civil Procedure. Accordingly, the defendant in the foreign judgment may challenge the enforcement thereof, on the grounds that the foreign judgment does not meet those prerequisites. Broadly speaking, a defendant challenging enforcement would usually assert lack of finality/judiciality of the foreign judgment, lack of “indirect jurisdiction”, invalid service, the foreign judgment being contrary to the public order or good morals in Japan, and/or the lack of reciprocity.
In addition to the options mentioned above, a defendant in a foreign judgment may be able to raise a defence that has arisen after the rendering of the foreign judgment. For instance, when a foreign judgment ordering a defendant to make a payment to a plaintiff has become final and conclusive, and the defendant thereafter has made the payment in accordance with the foreign judgment, then the defendant may assert in a lawsuit seeking a judgment of execution that the foreign judgment has already been fulfilled.
Domestic and foreign awards are deemed to have the same legal effects as a final and irrevocable court judgment in Japan (Article 45(1) of the Arbitration Act of Japan (Act No 138 of 2003, the “Arbitration Act”)), and can be enforced after obtaining an enforcement decision from a Japanese court (Article 46 of the Arbitration Act). A party seeking enforcement of an arbitral award may petition a court for an enforcement decision.
Japan acceded to the New York Convention on 20 June 1961. The New York Convention became effective in Japan from 18 September 1961, with a reservation of reciprocity. Also, foreign awards rendered in a non-signatory country/region to the New York Convention, such as Taiwan, can be enforced according to Article 46 of the Arbitration Act.
The grounds for refusing to recognise or enforce domestic and foreign awards are substantially the same as those under Article 36(1) of the 1985 UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”) or Article V of the New York Convention. Even if an award is rendered in a country or region that has not signed or ratified the Convention, these recognition and enforcement rules apply. In that sense, the seat of the arbitration is not an issue for the recognition or enforcement of awards in Japan.
Japanese courts are generally considered pro-arbitration and view the recognition and enforcement of awards in a favourable light.
Japanese law does not distinguish between different types of arbitral awards, and thus the provisions relating to enforcement are applicable regardless of the nature of the award.
Currently, neither the interim measures granted by the arbitral tribunal nor the emergency measures ordered by emergency arbitrators may be enforced with an enforcement decision granted by a Japanese court. The Japanese government is deliberating on amendments to the Arbitration Act making the interim measures enforceable in light of the 2006 amendment to the Model Law.
Japanese law does not distinguish between different categories of arbitral awards, and thus the provisions relating to the enforcement are applicable regardless of the nature of the awards.
A party seeking enforcement of an arbitral award should apply to a court for an enforcement decision. As per Article 45(2)(ix) of the Arbitration Act, Japanese courts will consider whether the enforcement of the award will be in conformity with the laws of Japan (both procedural law and substantive law). These standards are basically the same as the ones used to set aside an arbitral award (Article 44(1)(viii) of the Arbitration Act).
To enforce an award that has been issued by an arbitral tribunal but has not been performed voluntarily, a party generally must file a petition with the court for an enforcement decision. When the enforcement decision becomes final and irrevocable, it can be used for compulsory enforcement with the assistance of a judicial authority.
The party seeking the enforcement decision is required to submit a duly certified copy of the arbitral award and, if it is written in a foreign language, a Japanese translation of the award.
The procedure for enforcement decisions has been simplified. While the court must give both parties an opportunity to be heard, a formal oral hearing is not required.
The enforcement decision is subject to appeal, which must be filed within two weeks from the day on which the order is served on the appellant.
Time and total costs required for enforcing arbitral awards largely differ depending on the circumstances of each case.
An application for an enforcement decision requires filing a fee of JPY4,000 and postal costs.
As for length of time, according to the statistics of the Tokyo District Court as of 31 December 2016, among all the cases of petition for an enforcement decision from 2004 until 2016, about half of such cases were completed within six months and 75% of such cases were completed within one year at the court of first instance.
As stated in 4.1 Legal Issues Concerning Enforcement of Arbitral Awards, the grounds for refusing to recognise or enforce domestic and foreign awards are substantially the same as those of Article 36(1) of the Model Law or Article V of the New York Convention.
In Japan, the enforcement of judgments is governed by the Civil Execution Act of Japan (“Civil Execution Act”, or “Act”). A foreign judgment whose effect is acknowledged under the Code of Civil Procedure of Japan can be enforced in Japan under the Act. In the case of a foreign arbitral award, it can be enforced under the Act after the obligee obtains an enforcement decision of the court under the Arbitration Act of Japan (“Arbitration Act”).
In this article, we highlight recent developments regarding enforcement and execution laws in Japan. First, we summarise the 2019 amendments of the Civil Execution Act focusing on (i) amendments regarding the enlargement of the obligee’s right to obtain information concerning the obligor, and (ii) amendments to the execution of surrendering the custody of a child (along with amendments to the Act for Implementation of the Convention on the Civil Aspects of International Child Abduction). Second, we introduce ongoing discussions regarding the enforcement aspect of possible amendments to the Arbitration Act.
2. Amendments Regarding the Enlargement of the Obligee’s Right to Obtain Information Concerning the Obligor
2.1 Amendment of the “Property Disclosure Procedure”
Outline of the Property Disclosure Procedure and reasons for its amendment
Japan conducted a large-scale amendment of the Civil Execution Act in 2003. The 2003 Amendment allows an obligee to obtain information about an obligor’s property through a “Property Disclosure Procedure”. In the Property Disclosure Procedure, upon an obligee’s petition, a court summons an obligor to the court and the obligor is required to make a statement on the property of the obligor under oath.
However, under the 2003 Amendment, the number of obligees’ petitions for Property Disclosure Procedure was limited (to around 1,000 cases per year), and the number has declined in recent years. In addition, only 30-40% of the obligees who filed a petition were able to obtain asset information of the obligors through the Property Disclosure Procedure, due to the obligors’ refusal of disclosure, etc.
In order to increase the viability of the Property Disclosure Procedure, the following two amendments were made in the 2019 Amendment of the Civil Execution Act:
Expansion of the range of standing of petitioners for the Property Disclosure Procedure
Under Japanese law, an obligee who has a “title of obligation” (Saimu-Meigi), such as a final and binding judgment, can carry out compulsory execution through the court. However, under the 2003 Amendment of the Civil Execution Act, an obligee who has some type of title of obligation, such as “a judgment with a declaration of provisional execution” ordered in the judgment of the lower court of instance which is subject to appeal and “a notarial deed prepared by a notary” with debtor’s consent to surrender compulsory execution (Sikkō-Shōsho), could not file a petition for the Property Disclosure Procedure.
However, there was criticism of the above limitation on the range of standing of the petitioners for the Property Disclosure Procedure, because an obligee who has any type of title of obligation can carry out compulsory execution and there are no plausible reasons to exclude such obligees from the Property Disclosure Procedure.
Reflecting the above criticism, the 2019 Amendment of the Civil Execution Act expanded the range of standing of petitioners for the Property Disclosure Procedure, and the Property Disclosure Procedure became available for an obligee who has any type of title of obligation.
Strengthening of penalties for non-appearance and false statement
Under the Property Disclosure Procedure, an obligor who (i) failed to appear on the hearing date for the property disclosure, (ii) refused to swear under oath, (iii) failed to make a statement, or (iv) made a false statement on the status of the obligor’s assets, shall be subject to punishment. However, the punishment under the 2003 Amendment of the Civil Execution Act was only “a non-penal (administrative) fine of not more than JPY300,000 [around USD3,000]”. Some practitioners pointed out that such penalties were insufficient to deter an obligor from failure to disclose his or her property.
Considering the above insufficiency, the 2019 Amendment of the Act strengthens punishment against the items (i) to (iv) above. The punishment under the 2019 Amendment of the Act is imprisonment with work for not more than six months or a penal (criminal) fine of not more than JPY500,000 (around USD5,000).
2.2 Introduction of new procedures for acquiring information from a third party
Procedures for acquiring information from a third party
The 2019 Amendment of the Civil Execution Act also introduced new procedures called “Procedures for Acquiring Information from a Third Party”. Under these procedures, an obligee who has a title of obligation can obtain the following three types of asset information related to an obligor from a third party:
Acquisition of information pertaining to real property of the obligor
In Japan, there is a real property registration system called “Tōki”, and information about real property (eg, owner of a real property) is registered with Tōki. Any person, including an obligee, is able to access Tōki without needing permission. However, Tōki is searchable only by the location (street address) of the real property, and not searchable by the name of the real property’s owner. Therefore, an obligee cannot search an obligor’s real property using the obligor’s name.
The 2019 Amendment of the Civil Execution Act allows an obligee who has a title of obligation to acquire information pertaining to the real property of an obligor through court order. More specifically, upon an obligee’s petition, a court may order the registry office to disclose whether there is any land whose registered holder of ownership is the obligor, and if there is such land, further information about the land.
Acquisition of information pertaining to the salary of the obligor
In Japan, to execute against a claim pertaining to the salary of an obligor, an obligee is required to identify a third-party obligor, such as the employer of an obligor. However, identifying the employer of the obligor is sometimes difficult.
Considering the above, the 2019 Amendment allows an obligee who has a title of obligation to acquire information pertaining to a salary claim of an obligor. More specifically, upon an obligee’s petition, a court may order municipalities or associations related to employees’ pensions to disclose whether there is any person or entity who pays a salary to the obligor, and if there is such a person or entity, further information about the person or the entity. In Japan, a municipality receives information about the employment of a resident in the municipality from the employer of the resident, and the above associations retain employment information about participants in their pension insurance schemes.
It should be noted, however, that only an obligee who has one of the following claims can file a petition for the above order:
Acquisition of information pertaining to deposits or savings in the obligor’s bank account
In Japan, to execute compulsory attachment of deposits or savings in an obligor’s bank account, an obligee is required to identify not only the name of the bank but also the branch name. In practice, however, it is normally difficult to identify the branch name of the obligor’s bank account because all major banks have numerous branches.
The 2019 Amendment of the Civil Execution Act allows an obligee who has a title of obligation to acquire information pertaining to deposits or savings in an obligor’s bank account. More specifically, upon an obligee’s petition, the court may order a bank to disclose whether the obligor maintains a bank account, and if there is such a bank account, further information about it, including the branch which handles the account.
3. Amendments to Execution of Surrendering the Custody of a Child
The Convention on the Civil Aspects of International Child Abduction (the “Hague Convention”) prescribes, among other things, the assistance to be provided by Central Authorities and procedures for the return of an abducted child. Japan is a signatory to the Hague Convention, and it came into effect in Japan from 1 April 2014.
Japan enforces the Hague Convention under the Act for Implementation of Convention on the Civil Aspects of International Child Abduction (“Implementation Act”). In May 2019, the Diet approved a bill to partially amend the Implementation Act, and the amended Implementation Act came into force on 1 April 2020. The primary aim of the amendment is to further ensure the effectiveness of compulsory execution procedures for the return of a child. The amended points are as follows.
3.1 Partially abolishing the prerequisite of indirect compulsory enforcement
In Japan, there are the following three types of enforcement of judgment:
Prior to the amendment, as for the execution of surrendering the custody of a child, indirect compulsory enforcement was a prerequisite for execution by substitute, based on the consideration that enforcement of a judgment should be carried out sequentially, starting with methods that place less psychological burden on the child. In reality, however, there may be cases where it is deemed unlikely that the obligor will release the child even if indirect compulsory enforcement is carried out, or cases where direct compulsory enforcement of the judgment is necessary to prevent immediate danger to the child. Recognising these exceptions, the amendment allows direct compulsory enforcement to be carried out in the following cases:
3.2 Abolishing the principle of simultaneous presence of the obligor
Prior to the amendment, the release of a child could only be made when both the child and the obligor were present at the place of enforcement. However, certain shortcomings of this requirement soon became apparent, such as cases where the obligor avoided being with the child to prevent enforcement, where the obligor resisted violently in front of the child, etc. Therefore, this amendment has eliminated the requirement of simultaneous presence of the obligor. Instead, it requires the presence of the left-behind parent so that the child does not feel uneasy at the place of enforcement. Even if the left-behind parent himself or herself is unable to appear at the enforcement location, if it is deemed appropriate for the protection of the interests of the child for the left-behind parent’s agent to appear on his or her behalf, the enforcement court may decide to grant enforcement when the agent appears pursuant to Article 140 of the Implementation Act and Article 175, Paragraph 6 of the Civil Execution Act.
3.3 The occupant’s consent is not always required
The enforcement of a judgment in places other than those occupied by the obligor is possible with the permission of the enforcement court in lieu of the consent of the possessor of such place under Article 140, Paragraph 1 of the Implementation Act, Article 175, Paragraph 3 of the Civil Execution Act.
3.4 Execution without interrogation of the debtor
In principle, the court is required to conduct a hearing (Shin-Jin) of the obligor in advance of the execution by substitute. However, under Article 138, Paragraph 2 of the Implementation Act, if there is an imminent danger to the child, or if there are other circumstances where the purpose of enforcement of the judgment cannot be achieved after hearing, the court can render a decision on execution by substitute without interrogating the obligor.
3.5 Consideration of the child’s physical and mental health
Under Article 140, Paragraph 1 of the Implementation Act and Article 176 of the Civil Execution Act, in realising the extradition of the child in the enforcement of judgment procedure, the enforcement court and the enforcement officer are required to take into consideration the age and level of development of the child and other circumstances. Additionally, to the extent possible, consideration shall be given to ensuring that the enforcement of the judgment does not have a harmful effect on the child’s mind or body.
4. Ongoing Discussions Regarding the Enforcement Aspect of the Possible Amendments to the Arbitration Act
The Arbitration Act was enacted in August 2003 and came into force in March 2004. The Arbitration Act is applicable to arbitral proceedings whose place of arbitration is in Japan. The Arbitration Act generally adopts the UNCITRAL Model Law, with some deviations. However, the UNCITRAL Model Law was amended in 2006 shortly after enactment of the Arbitration Act in Japan. In addition, following the Basic Policy on Economic and Fiscal Management and Reform 2017 approved by the Cabinet of Japan, the Japanese government has enthusiastically promoted and developed reliable judicial systems for arbitration in Japan. Further, it has been seriously discussed that relevant laws should be amended in line with the United Nations Convention on International Settlement Agreements Resulting from Mediation (“Singapore Convention on Mediation”), which was adopted on 20 December 2018 and came into effect on 12 September 2020.
On 17 September 2020, an Arbitration Law Sub-Committee was established under the Legislative Committee in order to discuss and provide a legislative draft of the amendment of the Arbitration Act. On 5 March 2021, the Sub-Committee proposed the “Tentative Draft of the Amendment of the Arbitration Act, etc.” (“Tentative Draft”).
4.2 Summary of the Tentative Draft
Amendments related to interim measures
In line with Article 17 of the 2006 UNCITRAL Model Law, the Arbitration Law Sub-Committee proposes to enact the explicit definition of the four categories of interim measures an arbitral tribunal may order in the Arbitration Act. Explicit provisions regarding the conditions for granting interim measures and the arbitral tribunal’s authority to order the deposit of security to the party requesting an interim measure are also proposed in line with the 2006 UNCITRAL Model Law. While whether the arbitral tribunal may order preliminary orders or interim measures via ex parte procedure was discussed, the Arbitration Law Sub-Committee proposes not to create explicit rules on this and to leave this to interpretation of law. Further, the Arbitration Law Sub-Committee proposes the amendment that interim measures are to be enforceable after obtaining the court’s recognition and enforcement order, which is also in line with the UNCITRAL Model Law.
Amendment related to domestic jurisdiction and transfer of arbitration and mediation cases
The Arbitration Law Sub-Committee proposes to create concurrent jurisdiction for arbitration-related court proceedings to the Tokyo and Osaka District Courts in order to facilitate smooth and sophisticated management of these kinds of court proceedings. Arbitration-related court proceedings include court procedures for the recognition and enforcement of an arbitration award. It is expected that well-trained judges with sufficient English skills will be assigned to the arbitration-focused division of both district courts, which would be beneficial for the promotion of a reliable judicial system for international arbitration in Japan.
Amendment related to the need for translation
The Arbitration Law Sub-Committee proposes to amend the Arbitration Act to the effect that the court may order that a Japanese translation of all or part of an arbitration award and exhibits written in a foreign language is unnecessary in arbitration-related court proceedings. This revision would be beneficial in that it would significantly reduce the translation costs for an arbitration award, which is often quite lengthy and typically constitutes the majority of the costs for the enforcement of an arbitration award in Japan.
Amendment related to enforcement of a settlement agreement under the mediation procedure
While whether Japan should ratify the Singapore Convention on Mediation is outside the scope of the discussion at the Arbitration Law Sub-Committee, it proposes the amendment of relevant laws regarding enforcement of a settlement agreement through the mediation procedure. In the Tentative Draft, the Arbitration Law Sub-Committee proposes multiple options – a settlement agreement through the mediation procedure would be enforceable (i) only if the mediation procedure has international aspects, (ii) regardless of international or domestic mediation procedure, or (iii) only in the case of a limited scope of mediation procedures (irrespective of domestic or international), such as government-certified ADR under the ADR Act. In all options, the Arbitration Law Sub-Committee proposes to exclude consumer disputes, labour disputes and family disputes from the scope of what is an enforceable settlement agreement under the mediation procedure.
4.3 Prospect of the legislation process
The Arbitration Law Sub-Committee will discuss further and propose the Final Draft, considering the result of the public-comments procedure for the Tentative Draft, which was concluded in May 2021.