Developments of the Application of the 2023 CEA Amendment in Japan

It has been three years since the latest amendment of the Civil Enforcement Act (Act No 4 of 1979) (CEA) was made in 2023. While the CEA was amended quite recently, in 2020, which included the expansion of the means for property disclosure and relaxation of the requirements for the application thereof, the amendment in 2023 was made from the perspective of digitalisation of civil proceedings.

This article will explain the background and details of the amendments to the CEA in 2023 (the “2023 CEA Amendment”), together with the prospect of impact from an international perspective.

Background of the 2023 CEA Amendment – digitalisation of civil proceedings

In 2018, the Cabinet established the Investigative Commission for Digitalisation of the Court Proceedings, etc, which released the “Report for the Digitalisation of the Court Proceedings, etc – to Realize Three ‘e’s.” “Three ‘e’s” here stand for:

• e-Filing (which expects (i) the submissions of briefs and evidence only online, (ii) the court records only in digital form, and (iii) fees only by electronic payment);
• e-Court (which expects (i) the implementation and expansion of web conference and TV conference, (ii) reform of the first oral argument proceedings, and (iii) utilisation of IT tools during the arrangement of allegations and evidence); and
• e-Case Management (which expects (i) online access to the briefs and evidence whenever necessary, (ii) the arrangement of the proceedings schedule online, and (iii) the parties’ (and counsels’) checking and confirmation of the status of the case).

With these “three ‘e’s”, this report suggested the “full digitalisation of the court proceedings” that expects no paperwork through the whole process (assuming all the case materials to be digitalised), from the filing/application of the case to all of the following proceedings in civil cases. The amendment consists of the following three phases and was implemented in full, through the amendments to and phased enactment of the Code of Civil Procedure (No 109 of 1996) (CCP) in May 2026.

• Phase One was to enable the arrangement of issues and evidence through web-meetings. This was implemented using the Teams application provided by Microsoft in all the district courts, high courts (including the branches) and summary courts by January 2024. Phase One also included the implementation of the “System for Digital Submission of the Civil Litigation Materials” (so-called “mints”, abbreviation for “MINji saibansyorui denshi Teisyutsu System”), where all the materials that can be submitted by facsimile (such as briefs, copies of evidence and lists of evidence) were to be submitted online in all the district courts, high courts (including branches) and summary courts by November 2023.
• Phase Two was to enable both parties to attend the hearings (including the oral argument, preparatory proceedings and settlement proceedings) online, which were implemented by March 2024.
• Phase Three was to implement all the amendments to the CCP and expect the full digitalisation of the civil proceedings’ materials, including the submission of the complaint. This was implemented in May 2026.

Together with the amendments to the CCP for the digitalisation of the civil proceedings, the laws and regulations have been amended regarding the systems for other civil court-related business, including civil execution, civil preservation, bankruptcy proceedings, civil rehabilitation, corporate reorganisation, special liquidation, recognition of and assistance for foreign insolvency proceedings, non-contentious cases, civil mediation, labour tribunal proceedings, personal status litigation, domestic relations cases and cases relating to the return of a child.

Overview of the 2023 CEA Amendment

The 2023 CEA Amendment relates to this digitalisation reform of civil proceedings, an overview of which is as follows.

Implementation of the provisions pertaining to digitalisation and inspection of case records

The first item is to enable access to the court materials by a person who has an interest in the outcome of the case. To be more specific, regarding the civil execution conducted by an execution court, a person who has an interest may, in accordance with the rules set out in the Rules of the Supreme Court:

• make a request to the court clerk (i) to inspect or copy the electromagnetic case record or (ii) to deliver a document or an electromagnetic record certifying all or part of its contents; and
• make a request to the court clerk for a document or an electromagnetic record certifying matters concerning the case.

This is to be enacted by 13 June 2028 (within five years from the promulgation).

Implementation of the mechanisms, etc, pertaining to the digitalisation of judgments

The second item is to correspond to the digitalisation of judgments. To be more specific, the 2023 CEA Amendment:

• enables:
1. the submission of the case identification information as set out in the Rules of Supreme Court instead of the submission/showing of the original certificate (which is issued by the court); and
2. deeming such submission of the case identification information as the submission of the certificate; and
• implements the necessary revisions corresponding to the digitalisation of judgments to other stipulations including that of the implementation of compulsory execution, grant of a certificate of execution, and the service of title of obligation.

Both items above have been enacted as of the date of writing this article.

Implementation of the provisions pertaining to online submission, etc

Regarding the petitions and other briefs to be filed to the court in writing pursuant to the Civil Execution Act or other laws and regulations, it becomes possible to, instead of filing them in writing, submit the required matters to be described in such briefs by recording through the electronic data processing system. This part of the amendment is expected to be enacted by 13 June 2028.

Use of the means of web conference, etc, on the hearing

The 2023 CEA Amendment enables the execution court to use a web conference system for the proceedings. To be precise, the execution court may, if it finds it to be appropriate, pursuant to the Rules of the Supreme Court:

• conduct proceedings on the distribution date using a method that enables the court and the parties (obligee and obligor) to communicate simultaneously by audio transmission, in which case, the parties who participated in the proceedings by such methods will be deemed to have appeared on such distribution date; and
• conduct the proceedings on the property disclosure date using a method that enables the court and the parties (petitioner and the person obliged to disclose) to communicate simultaneously by audio transmission, in which case, the parties who participated in the proceedings by such methods will be deemed to have appeared on such property disclosure date.

In addition, necessary provisions have also been implemented for statements to be made by a person obligated to disclose by means of communication through transmission and reception of images, etc.

All of the above items in this part have already been enacted as of the date of writing this article.

Implementation of the provisions allowing the omission of the submission of certificate of registered matters

The 2023 CEA Amendment sets out that the exercise of a real property security interest shall commence only when a petition for the exercise is filed or a certificate of official registration (excluding provisional ones) of that real estate is submitted. Other necessary provisions were also implemented, such as (i) the designation of the period during which persons with interest should submit their opinion, and (ii) designation of the period for filing an objection to the amount of the claim or dividend of each creditor recorded in the electronic distribution list. This part has been enacted as of the date of this article.

No significant update (further amendments) can be seen from 2024; but it is very important to point out that the digitalisation has been promoted more from the perspective of means of hearings, and counsels attend hearings by means of Teams for almost all the cases, except those involving multiple parties or very complicated legal matters, or those for which one of the parties does not retain counsels.

Impact of the CEA Amendment

As indicated above, the 2023 CEA Amendment will be enacted on a phase-by-phase basis while most parts have been enacted in line with the full enactment of the amendment to the CCP. It may seem that the entire digitalisation is still a bit far off, but, once realised, this amendment will be a huge step not only for domestic clients but also for foreign clients to access the court, and will make civil proceedings much more convenient.

Basic process to enforce the judgment issued by a foreign court

In talking about the impact of the 2023 CEA Amendment from an international perspective, it might be worth recapping the execution process of the judgment issued by a foreign court here in Japan.

The CEA sets out the basis for the compulsory execution (“title of obligation”); and for foreign judgments to be a title of obligation, it should be “a judgment of a foreign court for which an execution judgment has become final and binding”. In short, it is required to file a lawsuit claiming for the execution judgment to the Japanese competent court to proceed with the compulsory execution of the foreign judgment.

Prerequisites set out in the Code of Civil Procedure to obtain the execution judgment are:

• international jurisdiction (the jurisdiction of the foreign court is recognised under laws, regulations, conventions or treaties);
• proper service to the losing party (the defeated defendant has received a service (excluding a service by publication or any other service similar thereto) of summons or order necessary for the commencement of the suit, or has appeared without receiving such service);
• conformity to Japanese public order and morality (the contents of the judgment and the court proceedings are not contrary to public policy in Japan); and
• reciprocity (a mutual guarantee exists).

In this regard, the following points should be noted.

• International jurisdiction – the jurisdiction requirement under the CCP in this respect is called “indirect jurisdiction”, regarding which the Supreme Court of 1998 ruled that it is appropriate to refer to the rule of reason, taking into account the principles of fairness among the parties and the pursuit of appropriate and swift judgment. In this sense, indirect jurisdiction shall be determined from the standpoint of whether it is appropriate to recognise the foreign judgment in Japan, considering the specific circumstances of the case and referring to the relevant provisions of the CCP.
• Proper service – it is not required to be the service under the Japanese civil procedure, but rather it must be done such that: (i) the defendant can actually be aware of the commencement of the legal proceedings against him/her; (ii) he/she is not prevented from the appropriate exercise of the right to defence; and (iii) the service complies with applicable conventions or treaties (Supreme Court of 1998). It can also be satisfied if the unsuccessful defendant has “appeared” in court, which means that the defendant was given the opportunity to defend and actually took measures to defend himself/herself in court, including the submission of a jurisdictional challenge.
• Japanese public order and morality – the foreign judgment must not be against public policy in Japan. In general, both the contents and the underlying facts upon which the judgment is based are to be examined to determine whether or not they are contrary to public policy in Japan.
• Reciprocity – the “mutual guarantee” requirement under Article 118(iv) requires that, in the foreign country where the foreign judgment was rendered, the same type of judgment rendered by a Japanese court would be effective under conditions which are not substantially different from those in Japan (Supreme Court of 1983).

Once the court admits and issues the execution judgment, then the creditor can file a petition for compulsory execution based on such execution judgment, in accordance with the provisions of the CEA, the version of which will depend on the timing of such execution.

Impact to practice – matters to be kept in mind

While counsels are used to the current steps for compulsory execution which has been long used, the new procedures after the amendment seem to be very fascinating because we can shorten the time required for the proceedings and realisation of the judgment. The current process takes quite some time and requires back-and-forth communications with the court. For example, once we, as counsels, have obtained a winning judgment which becomes final and binding after the expiration of the appeal period, we first apply for and obtain an authenticated copy of that judgment, attaching a certificate of execution and a certificate of service of the judgment to the losing party. Together with those documents and some other certified copies of official registrations (especially those relating to the subject of the compulsory execution, such as real estate or the third-party debtor whose debt will be the subject of execution), we then file a petition for compulsory execution onto some specific assets of the losing party. If the competent court is in a local area, it will take quite some time to obtain all the required documents. Imagine where you cannot satisfy the right admitted in the judgment and need additional compulsory execution; then you have to repeat that process all over again for other assets. If we can substitute them with the digital file, we do not have to worry about the timeline that much.

As can be seen, the steps for the execution of foreign judgments are quite the same as those for normal Japanese litigation and following compulsory execution. In this regard, the 2023 CEA Amendment, together with the amendments to the CCP so far, will have a full impact on the cases involving non-Japanese companies, such as one that has a subsidiary in Japan and does business in the country, the one that does business with a Japanese company and would like to execute its rights, or the one that obtained a judgment from the court of its own domicile and would like to realise such rights admitted thereof in Japan.

It would be advisable to check the timing of the execution together with the enactment situation of the 2023 CEA Amendment in order not to miss the mandated procedures and to most efficiently realise your rights.