Litigation & Dispute Resolution

2023
12th Edition

Contributing Editor: Justin Michaelson

CONTENTS
Preface

Justin Michaelson, Quinn Emanuel Urquhart & Sullivan

Expert analysis
chapters

Fraud and limitation, Justin Michaelson & Simon Camilleri,Quinn Emanuel Urquhart & Sullivan

1Fintiv stipulations in inter partes review proceedings
Kenneth R. Adamo, Law Office of KRAdamo
Eugene Goryunov, Haynes and Boone, LLP7

Jurisdiction chapters
BrazilEduardo José de Oliveira Costa, Daniel Figueiredo Heidrich &
Roberto Amarante Levy de Seixas Pereira,
Lopes Muniz Advogados Associados

11

Cayman Islands

Ian Huskisson, Anna Peccarino & Neil McLarnon,
Travers Thorp Alberga

22

China

Jason Yue Wang & Carine (Li) Dong, Global Law Office

32

CyprusIosif Frangos & Nikoleta Pogiatzi, I. Frangos & Associates LLC42

England & Wales Richard Hornshaw & Anna Storer, Akin Gump LLP52

FranceFrédéric Flatrès & Mathilde Cousteau, Bersay

62

Germany

Jochen Lehmann & Vladimir Krahn,
GÖRG Partnerschaft von Rechtsanwälten mbB72

GreeceSpyros G. Alexandris & Charilaos (Harry) Agathos,Bahas, Gramatidis & Partners

83

India

Manisha Singh & Swati Mittal, LexOrbis

96

Italy

Mate Alerić, Filippo Frigerio, Micael Montinari & Claudia Rivieccio,
Portolano Cavallo

105

Japan

Shinya Tago, Takuya Uenishi & Landry Guesdon, Iwata Godo

116

Liechtenstein

Manuel Walser & Daria Tschütscher, Walser Attorneys at Law Ltd.

131

MexicoMiguel Angel Hernandez-Romo Valencia &Miguel Angel Hernandez Romo, Foley & Lardner México, S.C.

141

New Zealand

Jonathan Scragg, Ayleath Foote & Edward Greig, Duncan Cotterill

148

NorwayChristoffer O. Simonsen & Jacob S. Bjønness-Jacobsen,
Advokatfirmaet Grette AS

158

Switzerland

Fuad Ahmed, Edouard Faillot & Adeline Burrus-Robin, Faerus SA

168

Turkey/Türkiye

Gökmen Başpınar, Adil Ali Ceylan, Ahmet Furkan Öztürk &
Gülendam Tüylüoğlu, Başpınar & Partners Law Firm,
member of GRATA International

179

United ArabEmirates

Ahmed Mohamed El Sayed, 
BSA Ahmad Bin Hezeem & Associates LLP185

USA

Kenneth R. Adamo, Law Office of KRAdamo
Eugene Goryunov, Haynes and Boone, LLP196

JapanShinya Tago, Takuya Uenishi & Landry Guesdon
Iwata Godo
Efficiency of process
Japan is a civil law jurisdiction and there are fundamental differences between the civil
law and the common law litigation practices. In contrast with the adversarial system, theinquisitorial approach of the Japanese civil law procedural system means that the judge
largely controls the process and the collection of factual information, and the decisionmaking process proceeds through a series of oral hearings.
A new Code of Civil Procedure (Law No. 109 of 26 June 1996 (CCP)) was adopted in 1996.
One of the key objectives of the reform was to speed up the course of trials. This goal was
further emphasised through the enactment of the Law on the Expediting of Trials, Law No.
107 of 16 July 2003, which provides that the objective of expediting trials is to conclude thefirst instance proceedings as swiftly as possible, within two years of their commencement.
First instance proceedings last eight months on average, but complex cases can take longer.
The courts typically schedule the initial hearing within one to one-and-a-half months after theplaintiff has submitted a statement of claims, and require the defendant to submit an answer
about a week before the hearing (Article 60-2 of the Rules of Civil Procedure provides that“[e]xcept when special circumstances exist, the presiding judge shall designate a date within
thirty days from the date on which the action has been filed […]”). In general, the courts
have succeeded in increasing the pace of the litigation process.
Information technology plays a role in the CCP: telephone conferencing andvideoconferencing are possible for preparatory proceedings (Articles 170-3 and 176-3).
Videoconferencing is also available for the long-distance examination of witnesses (Article
204); and the electronic processing of claims for payment demands (Article 397). A technicaladviser asked by the court to participate in proceedings can be heard by audio conferencing(Article 92-3), and an expert may be heard using teleconference or videoconference services(Article 215-3) when they live in remote areas. Microsoft Teams is currently used by the
courts as the videoconferencing tool.
The COVID-19 pandemic has had an impact on and accelerated the use of information
technology for proceedings. The CCP had already been revised in 2004 to enable online
petitions (Article 132-10) in connection with demand procedures, which are simplified
proceedings especially designed for demands for payment of claims regarding the paymentof money or other fungible assets or securities. In April 2022, Supreme Court rules cameinto effect to allow most court documents to be filed through an online system for regularcivil litigations. As a result of the enforcement of these Supreme Court rules, an online
filing system has been introduced at certain courts including the Tokyo District Court.
In June 2018, in response to the rapid worldwide development of digitalisation, the Japanese
government announced that it would achieve full-scale digitalisation of court proceedings
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JapanIwata Godoof civil litigation gradually, taking the following three steps: (i) the use of web conferencing
in specific courts including the Tokyo District Court to arrange issues and evidence under
the current CCP (Phase 1, in operation since February 2020); (ii) online oral argument
and arrangements regarding issues and evidence after the CCP revision (Phase 2); and (iii)
online filing of lawsuits, etc. (Phase 3). Their goal is to achieve three “E”s, i.e., e-Filing,e-Court and e-Case Management, while securing information security and access to justiceby those who do not have easy access to the internet. Revisions to the CCP adopted to
implement Phases 2 and 3 were promulgated in May 2022. The revised CCP will come into
force in stages within four years of the date of promulgation.
The current CCP does not provide for general fast-track proceedings but, for monetaryclaims not exceeding JPY600,000, special proceedings known as “petty claim actions” areavailable (Article 368). Cases must generally be concluded at the first hearing and the judge
delivers a judgment immediately after the hearing. The defendant may object and startordinary civil proceedings before the court.
Under the revised CCP, a special trial procedure that allows the parties to foresee the timeframeof civil proceedings is to be introduced. This newly introduced procedure will increase thepredictability and expeditiousness of the proceedings. The court must, in principle, follow
this special procedure if both parties agree thereto. In this special procedure, oral hearings
will be concluded within six months from the first hearing date and the judgment will berendered within one month from the date of conclusion of the oral hearings.
Integrity of process
Integrity of process underpins the general acceptance of Japanese courts as a safe andreliable forum for commercial dispute resolution, sometimes in stark contrast with thesituation prevailing in certain Asian jurisdictions. The professionalism, effectiveness,
integrity, accountability and transparency of the courts are highly rated. The operation ofJapanese justice relies on the existence of a highly trained, professional and independent
judiciary. Japanese courts have been very successful in upholding integrity and judgmentsthat impartially reflect the evidence, the arguments and the laws. Judges do not depart fromthe law and do not act from personal or political motives.
Japan is a society governed by the Rule of Law. The judicial system provides parties toa dispute with a reasonable opportunity to obtain relief when justified, and a reasonable
opportunity to defend against unjustified, spurious, or malicious claims. The system
attempts to implement these ideals through Constitutional provisions guaranteeing thedefendant in criminal cases the right to counsel, privilege against self-incrimination, anda right to a speedy trial before an impartial tribunal (Constitution of Japan, Articles 37
and 38). The civil justice system provides the parties with a reliable means of resolving
disputes by: being reasonably quick; being reasonably available (although cost is still an
issue); providing a neutral forum; and offering a procedure for resolving disputes that gives
a righteous plaintiff reasonable opportunity to be adequately compensated.
Other factors, in addition to access to justice and the relative timeliness of justice delivery,
include: the quality of justice delivery; the independence, impartiality and fairness of the
judiciary; public trust in the judiciary; the absence of corruption; the stability and consistencyof laws and regulations and their interpretation (even in the absence of a doctrine of binding
precedent, decisions of the Supreme Court are generally consistently followed by the lower
courts to the extent equitable); as well as the relative ease of retrieving past judgments andextracting data from court records.
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In contrast with the handling of commercial disputes, Japan’s criminal justice system haslong been criticised abroad (and increasingly domestically) and, according to many critics,
including legal practitioners, would need to be revamped, in particular in relation to thepractice known as “hostage justice” (hitojichi-shiho). Detention is traditionally seen as ameans to prevent suspects from fleeing or destroying evidence. The idea of holding suspects
for a long time is to use that time to interrogate them and attempt to secure a confession
to make a trial easier. According to Human Rights Watch, “the long-term detention in the
Carlos Ghosn case has triggered surprise and criticism overseas, leading to doubts about
Japan’s integrity as a democratic nation that guarantees human rights”. Carlos Ghosn, theousted chairman of Nissan Motor, was arrested in November 2018 and indicted on chargesof financial misconduct to find himself in the throes of the Japanese legal system before
fleeing the country in “one of the most brazen and well-orchestrated escape acts in recent
history”, to quote an assistant US attorney. His prolonged detention and other aspects (bail,defence rights) have put the international spotlight on the criminal justice system. Thisshould not, however, undermine the trust one may have in the Japanese civil justice system.
Privilege and disclosure
Privilege
There is currently no concept of attorney-client privilege under Japanese law. However, theJapan Fair Trade Commission (JFTC) has established new procedures for administrative
investigations to address concerns regarding the protection of communication (the law
carefully avoids using the term “privilege”) between an enterprise and its attorney, whichbecame effective on 25 December 2020. Documents containing confidential communication
between an enterprise and its attorney that address legal issues and satisfy certain conditions
are protected in administrative investigations into unreasonable restraints of trade (cartels
and bid-rigging) prohibited under Article 3 of the Act on the Prohibition of Private
Monopolization and Maintenance of Fair Trade (AMA). Confidential communications
between the enterprise and its attorney that address legal issues and satisfy certain conditions
cannot be accessed by the investigators and must be returned to the enterprise. The JFTC
has established rules under Article 76 of the AMA and explanatory guidelines. Pre-existingmaterials created before the enterprise consulted its attorneys and materials indicating
facts underlying confidential communication regarding legal advice between the enterprise
and attorneys are primary materials/fact-finding materials and cannot be privileged. The
enterprise must request the benefit of this system at the time of an order for submission. A
determination officer will vet the materials earmarked as privileged by the enterprise andconfirm whether these documents satisfy specific requirements.
Attorneys, doctors and other professionals and experts to whom confidential information
has been disclosed may refuse to testify and give evidence (Article 197-1(2) of the CCP) or
refuse to submit documents (Article 220 of the CCP) regarding facts that have come to theirknowledge in the performance of their duties. However, Article 197-1(2) does not apply
where the witness is released from his or her professional duty of secrecy under Article 197.
The attorneys’ obligation to keep secret information obtained in confidence in the course of
their professional duties is also stated under Article 23 of the Lawyers’ Act (Law No. 205
of 10 June 1949).
Disclosure
Under Japanese law, there is no disclosure obligation or extensive discovery process, incontrast with common law jurisdictions. Documents submitted as evidence by the parties are
typically collected by the parties through their own efforts. Accordingly, in a product liability
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JapanIwata Godocase, for instance, if a manufacturer is not cooperating, critical evidence may be concealed
from the plaintiff, which is both relevant and admissible in a product liability case, including,but not limited to, notice to the manufacturer of the existence of a defect in one or more of
its products, causation, the existence of a defect, and the feasibility of safer alternate designs.
It is nonetheless possible to petition a court to issue an order to submit documents after anaction has commenced by providing valid reasons to compel the counterparty, or a third
party keeping certain documents listed in Article 220 of the CCP in his possession, to
submit said documents (Article 221). The person filing a motion must indicate (insofar as
possible) the document, the identity of the person holding it, its significance, what needs tobe proven with it and the reasons why it is necessary. The obligation to produce documents
has been recognised in the following situations: (i) documents a party has referred to forthe purpose of presentation or assertion of proof; (ii) documents that a party submitting
evidence has the right to require delivery or inspection of while in the possession of anotherperson; (iii) documents showing a legal relation that support the rights or legal positionof the person filing a motion, or documents showing a legal relation between the person
filing a motion and the holder of the documents; (iv) documents that are not excluded(e.g., documents exclusively prepared for use by their possessor, documents that containconfidential, technical or professional information (e.g., confidential information held byprofessionals such as lawyers and doctors)); and (v) public officials’ documents, disclosureof which would harm the public (Article 220-4). If the other party fails to comply with thecourt order to produce a document, the court may find the applicant’s allegations concerning
said document to be true (Article 224-1).
Before filing an action, if the future plaintiff has given advance notice of the filing to the
future defendant, the plaintiff or recipient of the notice may, within four months of thedate of the notice, make inquiries to the other party on matters necessary to substantiate
his allegations or collect evidence (Article 132-2 of the CCP). In addition, the court mayorder the submission of documents and the commissioning of examinations when a motion
is filed by a party and it is difficult for that party to collect documentary evidence from theother side that would be clearly necessary to prove his case (Article 132-4).
The absence of extensive discovery may to some extent inhibit litigation in Japan. The
Japanese legal system has a fact-pleading requirement that obliges a plaintiff to plead facts
sufficient to be successful at the start of the case. The means for compelling the production offacts before the initiation of a lawsuit described above are relatively limited and inefficient,and plaintiffs also have little opportunity to obtain meaningful factual discovery even after
the suit has begun.
Costs
The general rule is that court costs are borne by the losing party (court costs consist of
court filing fees, the costs associated with service of process, documentary fees (preparationand submission of documents, including petitions, briefs, copy of evidence, translation of
documents), the costs incurred for the examination of evidence, accommodation and travel
expenses and daily allowances paid to witnesses and interpreters, and the remunerationof experts, as provided for under the Law on Costs of Civil Procedure (Law No. 40 of1971)). Court costs do not include legal fees (attorneys’ fees) that are borne by each party
respectively in the absence of an attorneys’ fees clause. Apart from these court costs, thegeneral rule is that litigation costs are borne by the party incurring the expense, even if theparty prevails in the dispute. In the context of tort claims, the court may nonetheless award
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JapanIwata Godoa usually small part of the prevailing party’s attorneys’ fees as part of the damages when
there is a reasonable causal nexus between a tort and the fees (in such case, the court would
tend to limit the recovery of attorneys’ fees to 10% of the other recoverable damages). The
allocation of court costs is ordered as part of the court’s decision.
Attorneys’ fees may be freely agreed upon between attorneys and clients, and lawyers areallowed to charge part of their fees on a contingency basis under Bar Association rules. Manylaw firms continue to determine their fees based on a combination of retainer fees and successfees based on the now repealed legal fee table of the Japanese Federation of Bar Associations.
The Japan Legal Support Center, an independent public institution, provides civil legal
aid services including free legal consultations and loans for attorneys’ fees for people who
require the assistance of legal experts but who, for economic reasons, are unable to pay
for attorneys’ fees and court costs; although, in practice, this is irrelevant for internationalcommercial disputes. To obtain public funding, the applicant must have financial resources
below a certain amount, have a reasonable chance of success, and pursue aims consistent
with the purposes of legal aid. Criminal matters are excluded from the scheme.
Litigation funding
Third-party funding is not yet common in the Japanese litigation practice. Its lawfulness isstill a moot point, although it does not appear to be prohibited per se. The assignment ofclaims or causes of action is generally permitted, but the entrustment of a claim for litigation
purposes is prohibited under the Trust Law (Law No. 108 of 2006). Depending on thecircumstances, there is still a risk that third-party funding could be regarded as a criminal act
under the Lawyers’ Act, which prohibits any person who is not an attorney from engaging
in legal business (including lawsuits, arbitration and conciliation) and also prohibits themfrom “acting as an intermediary in such matters” (i.e., referring cases to attorneys to obtaincompensation for their business activities) (Article 72 of the Lawyers’ Act).
Confirmation that third-party funding schemes are lawful could be welcomed by some inJapan, as litigation before the courts can be very costly. For example, the Japanese legal
system’s practice (no longer a requirement) of paying a substantial part of lawyers’ fees
upfront, inhibits litigation. The now defunct Bar Association courts’ filing fee system,
which for most cases has a graduated fee that increases with the size of damages sought
regardless of the actual work completed by the attorney, increases the cost of getting one’s
case before the court. Legal fees are generally borne by each party respectively, as explained
above. Also, under rules applicable to security for costs, the parties must pay litigation
expenses in advance to cover the cost of handling the case to be incurred by a court, as well
as a per diem expense allowance and transportation costs needed for witnesses, experts
and interpreters, etc. Those persons benefitting from legal aid who would have financial
difficulties in paying such costs can be exempted (Article 82-1 of the CCP). A party seeking
interim measures may also have to pay a security deposit.
There are currently no US-style class actions in Japan but making access to justice easierand more affordable through collective/mass actions was the main thrust behind theintroduction of the special procedure known as the Japanese class action system. The Act
on Special Provisions of Civil Procedure for Collective Recovery of Property Damage
Suffered by Consumers (Law No. 96 of 2013) introduced a system that provides for a
two-tier, opt-in procedure. During the first stage, a qualified consumer organisation files
a lawsuit requesting the court to confirm the liability of a business operator for a common
obligation arising under a consumer contract on behalf of potential consumer claimants. If
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JapanIwata Godothe action is confirmed, the quantum of damages will be determined based on individual
claims filed by consumers having elected to opt in. However, the scope of claims under
this Act is limited and only covers claims arising from consumer contracts and to certain
categories of property damage: claims for performance based on contractual obligations;
unjust enrichment; breach of contract; warranty against defects; and claims for damages
arising out of unlawful acts. However, damage to property other than the subject matterof the consumer contract, lost profits, personal injury, and pain and suffering are expressly
excluded by the Act. There is also the so-called “appointed party” mechanism under Article
30 of the CCP, which allows certain plaintiffs (or defendants) appointed by other claimants(or defendants) to act on their behalf in pursuing (or defending) civil actions. Appointments
can be made when there are enough claimants/defendants sharing a “common interest” (i.e.,the main allegations or defences are common amongst them). The appointed party canpursue the case on behalf of the appointing parties and the result will be binding upon theappointing parties, including a settlement.
Interim relief
The following forms of interim relief are available under the Civil Provisional Remedies
Law (Law No. 91 of 22 December 1989). Where a dispute involves a monetary claim,
obligees/potential plaintiffs may apply for a provisional attachment order (kari sashiosae)
to ensure that any future monetary judgment will be enforced under said Law (Article 20).
The effect of the attachment is to freeze the obligor’s/potential defendant’s assets to keep
the defendant from disposing of his movables (most often money in bank accounts) or
immovables and secure the future collection of their claims. It does not entitle the obligee
to convert the seized property into money and have his obligation satisfied therewith.
Where a dispute involves certain categories of non-monetary claims, potential plaintiffs
may apply for a provisional disposition order (kari shobun) to preserve their rights withrespect to the subject matter in dispute (Article 23). Unlike a provisional attachment, which
only concerns monetary claims, provisional disposition may take different forms due to thevariety of subject matters in dispute. Provisional orders establishing a provisional legal
relationship between the parties (e.g., in a labour relationship between an employer anda dismissed employee, the employee would file a motion requesting the court to issue aprovisional order confirming the employee’s status as an employee pending a resolution of
the dispute on the merits and receive salary without having to report to work) are available
to avoid substantial detriment or imminent danger caused by disputed legal relationships. To
be granted an order, the claimant must demonstrate: (i) its substantive right to be protected;
and (ii) that the exercise of its rights will most likely be impossible or extremely difficult
without such provisional attachment or disposition. For provisional dispositions establishinga provisional legal relationship between certain parties, the claimant must establish the prima
facie existence of a legal relationship that the other party is disputing, and the need forinterim relief to avoid substantial detriment or imminent danger to the claimant.
Enforcement of judgments
Domestic judgments
A local judgment may be enforced by submitting, to the execution court or to a bailiff, anoriginal copy of the judgment and a certificate of enforceability issued by a court clerk of
the judgment court (Articles 25 and 26 of the Civil Execution Law, Law No. 4 of 30 March
1979 (CEL)). The court or bailiff handles the enforcement of judgments. Enforcement
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differs for a monetary and a non-monetary judgment. Pursuant to Article 22 of the CEL,
compulsory execution may be carried out based on (inter alia) the following “obligationtitles” (saimu meigi) (also covering foreign judgments discussed in the next paragraph):a final and binding judgment; a judgment with a declaration of provisional execution; anorder of compensation of damages with a declaration of provisional execution; a demandfor payment with a declaration of provisional execution; a notarial deed prepared by anotary with regard to a claim for payment of a certain amount of money or any otherfungible chattel or a certain amount of securities, which contains a statement to the effectthat the obligor will accept compulsory execution; a judgment of a foreign court for which
an execution judgment has become final and binding; or an arbitral award for which an
execution order has become final and binding, etc.
Compulsory execution may be commenced only when an authenticated copy or a transcriptof an obligation-title, or a judicial decision that is to become an obligation-title when it
becomes final and binding, has been served upon the obligor in advance or simultaneously.
Means of compulsory execution of obligation-titles include the following:• For the enforcement of a monetary claim, the CEL allows for compulsory execution,and the debtor’s general properties (real properties, ships, movable properties, claims
and other property rights) can be attached and sold in a public auction sale, and the sales
proceeds are then used for the satisfaction of the monetary claim (Section 2 of Chapter
2 of the CEL).
• For the enforcement of an obligation to deliver real property, a request for the surrenderor delivery of real estate property, etc. (i.e., real property in which a person resides) may
be made under Articles 168 and 169 of the CEL and an indirect, compulsory execution
method is also available under Articles 173 and 172 of the CEL.
• For the enforcement of an obligor’s performance obligation, execution may be made by athird-party substitute (Article 414-2 of the CCP and Article 171 of the CEL) or through anindirect compulsory execution method under Article 172 of the CEL (monetary sanction:
the execution court orders the obligor to pay the obligee a certain amount deemed
reasonable to secure performance of the obligation by reference to the period of delay, or
immediately if the obligor fails to perform the obligation within a reasonable period).
• For the enforcement of an obligor’s obligation not to do something, a petition may be
filed with the court to remove the results of the obligor’s actions at the expense of theobligor or impose any other reasonable disposition for the future (Article 414-3 of the
CCP and Article 171 of the CEL). In addition, indirect compulsion is available under
Article 172 of the CEL. No direct enforcement by specific performance is allowed if
the nature of the obligation does not permit enforcement (Article 414-1 of the CCP).
Foreign judgments
Japan is not party to any bilateral or multilateral treaty for the recognition and enforcementof foreign judgments. To enforce a foreign judgment, the party enforcing the judgmentof the foreign court must obtain an execution judgment from a competent District Court
in Japan declaring such enforcement (Article 24-4 of the CEL). The requirements for therecognition of a foreign judgment are set forth in Article 118 of the CCP. The petitioner
must establish that the judgment is final. In addition, the judgment must satisfy thefollowing requirements: (i) the jurisdiction of the foreign court that rendered the judgment
is recognised in accordance with or under laws, regulations, conventions or treaties; (ii)the losing party has received proper service of summons or orders required to commence
the proceedings (excluding service through notice by publication), or has appeared without
being so served; (iii) the content of the judgment and the proceedings of the lawsuit are
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not contrary to public policy in Japan; and (iv) reciprocity exists (i.e., the courts of therelevant foreign country provide reciprocal recognition of Japanese judgments). If theserequirements are satisfied, the foreign judgment will be effective and enforceable in Japanand the court issuing an execution judgment must not retry the whole case or review thecase on its merits regardless of whether or not the foreign judicial decision was erroneous(Article 24-2 of the CEL). With respect to (iii) above, a Supreme Court judgment of 1997
denied the enforceability of punitive damages in a judgment of a State court of California
as a violation of Japan’s public policy.
Cross-border litigation
Jurisdiction
The jurisdiction of the Japanese courts in cross-border disputes is governed by the CCP(Chapter 2, Section 1, Articles 3-2 et seq.), which lays down international jurisdiction rules
applicable to litigation in the Japanese courts. Jurisdiction over a dispute primarily depends
on the classification of the dispute, as per the examples below:• Jurisdiction based on the defendant’s domicile (Article 3-2 of the CCP): the defendant’s
domicile or residence in Japan; or the principal place of business or business office ofthe defendant’s legal entity.
• Jurisdiction over an action involving a contractual obligation (Article 3-3): for an action
based on a claim for performance of a contractual obligation; on a claim for damages
due to non-performance of a contractual obligation; or on any other claim involving
a contractual obligation, the place of performance of the obligation (Article 3-3(1) of
the CCP).
• A tortious action: the place of the tortious act (Article 3-3(8) of the CCP). A tortious act
is deemed to happen where the tortious act was committed (including the place where
the product has been manufactured in product liability cases) or where the results haveoccurred (unless the occurrence in Japan of the results of a wrongful act committed
abroad was unforeseeable).
• Jurisdiction over actions involving consumer contracts and labour relations:• Article 3-4(1): A consumer dispute commenced by a consumer whose domicile islocated in Japan at the time the action is filed or at the time the consumer contract
is concluded.
• Article 3-4(2): An action involving a dispute over a civil matter that arises between
an individual worker and that worker’s employer with regard to the existence of alabour contract, or any other particulars of their labour relations, may be filed with
the Japanese courts if the place where the labour is to be supplied is within Japan.
• Article 3-5(3): An intellectual property (IP) dispute related to the registration of an
IP right in Japan, or about the existence or validity of certain IP rights registered inJapan.
• Agreement on Jurisdiction: Article 3-7(1): Parties’ agreement to international
jurisdiction.
• Article 3-8: Jurisdiction by appearance.
Even if one of the foregoing grounds is found, the court may dismiss the case if it findsthat there exist special circumstances under which a trial and judicial decision by the courtsof Japan would harm equity between the parties or impede the well-organised progress ofcourt proceedings (Article 3-9).
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Proceedings, etc.
Court proceedings are conducted in Japanese only. Interpretation or translation in Japaneseis required for testimonies or submission of documents in a foreign language. Legal
representation by an attorney is not required before all courts, especially the lower courts.
In court proceedings, the basic rule is that only a Bengoshi (an attorney-at-law registered inJapan) may act as a procedural attorney. A Gaikokuho Jimu Bengoshi (a foreign attorneyregistered with the Ministry of Justice) is not able to act as a procedural attorney in a courtof law in Japan. With respect to the application of a foreign law in the Japanese courts
where a foreign law was selected or determined to be the governing law, the foreign law isseen as the norm on which the judgment should be predicated. In principle, the duty of thecourt is to ascertain the law and its substance and in doing so, the court may make enquiries
to the Supreme Court, the Ministry of Justice, universities, or the foreign country’s embassy
or consulate. An expert witness can be appointed by the court. The court may also ask
the parties to assist and produce legal opinions from foreign lawyers or scholars (and inpractice, the court very often ends up relying on the submissions of the parties).
Service of summons
Service to a Japanese party
Service of summons is important, especially if a foreign judgment needs to be enforced
in Japan at a later stage. Under Article 118-2 of the CCP, the defeated defendant musthave received proper service of summons or order necessary for the commencement of thelawsuit (or have appeared without service). It also provides that service by publication does
not suffice. According to a Supreme Court judgment of 28 April 1998, service of summonsor order does not need to be done in accordance with Japanese law, but it must notify the
defendant of the commencement of the lawsuit and must not impair the defendant’s defence
rights. If there is any treaty on the service method to be used between Japan and the State
where the judgment is entered, service must be made accordingly.
Japan is a signatory to both the Hague Convention on the Service Abroad of Judicial andExtrajudicial Documents in Civil or Commercial Matters of 1965 (Service Convention)and the Hague Convention on Civil Procedure. The Service Convention provides for thechannels of transmission to be used when a judicial or extrajudicial document is to betransmitted from one State party to the Convention to another State party, for service ofthe latter. The Service Convention deals primarily with the transmission of documents; itdoes not address or comprise substantive rules relating to the actual service of process. The
Service Convention does not preclude a party from exercising its authority to serve directly
by post unless the contracting State declares that it refuses such service. Although Japan
has not made such a declaration, service directly made by post is considered not to meet therequirements of Article 118-2 of the CCP.
To meet the requirements of Article 118-2 of the CCP, the defendant must have had theopportunity to become aware of the occurrence of the lawsuit and defend themselves against
this lawsuit. In this regard, in a case involving a Japanese national resident of Japan as
defendant, the Tokyo High Court ruled in its judgment of 18 September 1997 that a Japanesetranslation must be included for the service of summons or order, regardless of the Japanesenational’s language skills. The document to be served under the Service Convention is first
sent to the Ministry of Foreign Affairs, which reviews it to determine whether the document
satisfies procedural requirements (for example, whether the request and the summary of the
document are properly filled in and whether the complaint is translated). If the requirements
are satisfied, the Ministry sends the document to the Supreme Court of Japan. Following its
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JapanIwata Godoown review, the Supreme Court sends the document to the District Court having jurisdiction
over the addressee of the document. The District Court then serves the document on theaddressee by special mail service. Once this is done, the District Court issues a certificate
of service, which is sent to the Ministry through the Supreme Court.
Service to a foreign party
Service outside Japan is performed by service as commissioned by the court to the competent
government agency of the foreign country or to a Japanese ambassador or consul stationed
in the relevant foreign country (Article 108 of the CCP). Even if the foreign country was
also a party to the Service Convention and central authority service was allowed, it normallytakes between six months to more than a year to complete service. Service by a consul
may normally be achieved within six months; however, if a person on whom documents
are served refuses to accept them, service cannot be affected. If there is no diplomatic
relationship between Japan and the foreign country and service under Article 108 of the
CCP may not be performed, or if the competent authority of the foreign country fails tosend a report of service for more than six months, documents may be served by publication(Article 110); although, in practice, this is seldom the case.
International arbitration
Arbitration is not a popular method of resolving domestic disputes between Japanesecompanies. The number of cases handled by the main institute, the Japan Commercial
Arbitration Association (JCAA), is nominal compared with the number of litigations
handled by domestic courts or the caseload of competing institutions in Singapore or HongKong. Japanese companies typically rely on Japanese courts for domestic matters and would
only favour arbitration for their cross-border activity: in this context, they tend to selectmajor, internationally recognised arbitration centres such as the International Chamber ofCommerce (ICC) or the Singapore International Arbitration Centre (SIAC).
The Arbitration Law, Law No. 138 of 1 August 2003 (JAL), is applicable to arbitralproceedings whose place of arbitration is in Japan. The JAL is based on the UNCITRAL
Model Law, although there are a limited number of deviations from the Model Law. In
addition, the Supreme Court Rules on Procedures of Arbitration Related Cases (Supreme
Court Rule No. 27 of 26 November 2003) prescribe procedural rules for court cases relating
to arbitration. No distinction is drawn between domestic and international arbitration. The
JAL sets out procedural rules, but should the parties specifically agree on other procedural
rules (for example, JCAA’s Commercial Arbitration Rules or the ICC Arbitration Rules),these rules will override the JAL, which will only fill the gaps. Revisions to bring the JALin line with the latest Model Law were enacted in April 2023.
The arbitration agreement must be in writing (Article 13-2 of the JAL). Documents signedby all the parties or letters exchanged between the parties, including documents exchanged
by fax or other communication devices, and other written instruments, are acceptable. The
agreement is valid only when the subject matter relates to a civil dispute (excluding divorce,etc.) that can be resolved by settlement between the parties (Article 13-1). Arbitrability ofa dispute is broadly construed in Japan to cover a variety of civil and commercial disputes.
Certain matters are generally considered to be non-arbitrable, including: insolvency;
antitrust matters; the validity of IP rights granted by the government; and shareholders’lawsuits against shareholders’ general meeting resolutions. Japanese courts generally takea pro-arbitration approach towards the enforcement of agreements to arbitrate. Article 14-1
compels Japanese courts, upon a petition by the defendant, to dismiss a claim related toa civil dispute that is subject to an arbitration agreement (save in limited circumstances,
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including when the arbitration agreement is null and void, cancelled or invalidated for otherreasons). A consumer may unilaterally terminate an arbitration agreement with a business
operator to arbitrate disputes that may arise in the future, and an agreement with respect
to labour disputes that may arise in the future between an individual employee and his
employer is null and void (JAL Supplementary Provisions, Articles 3 and 4).
The tribunal itself may rule on its own jurisdiction (i.e., the authority to conduct arbitralproceedings and make an award). Article 23-1 of the JAL expressly provides the principleof competence-competence in the same manner as the Model Law. The tribunal may ruleon assertions made on the existence or validity of an arbitration agreement or its own
jurisdiction. If such an objection is made, the tribunal shall issue a preliminary independent
ruling or an arbitral award when it considers it has jurisdiction, and when it deems otherwise,
shall issue a ruling to terminate the arbitral proceedings (Article 23-4).
Article 36 provides that unless the parties have agreed on the rules of law applicable to thesubstance of the matter, the arbitral tribunal will apply the substantive law of the State withwhich the dispute subject to the arbitral proceedings is most closely connected.
Unless otherwise agreed by the parties, the tribunal may order a party to take such interim
protection measures as the tribunal deems fit with respect to the subject matter of the disputeand order a party to provide appropriate security in connection with such measure (Article24). Because interim measures decided by arbitrators are not immediately enforceable,
Article 15 provides that, notwithstanding the existence of an arbitration agreement, aparty may request an interim protection measure from a court before or during arbitration
proceedings, and that the court may grant such measure in respect of a dispute that is the
subject of the arbitration agreement.
Pursuant to Article 39, the award must be in writing, dated and signed by the arbitrators andshould, unless agreed otherwise by the parties, state the reasons for the award. If the arbitral
tribunal is a panel, it is sufficient for the award to be signed by a majority of arbitrators.
Copies of the award must be served on the parties. The grounds for the setting aside of anaward by the court under Article 44-1 are substantially similar to those entrenched in the
Model Law. Article 45 provides that an arbitral award (irrespective of whether or not theplace of arbitration is in Japan) shall have the same effect as a final and conclusive judgment.
Japan is a party to the New York Convention and the Washington Convention. The JAL
also adopts the provisions of the Model Law on the recognition and enforcement of foreign
awards. For the enforcement of an arbitral award made in a foreign country, the applicant
needs to file a petition with the court to get an enforcement order, together with a certified
copy of the award and a translation into Japanese (Article 46 of the JAL).
The costs of arbitration are apportioned between the parties in accordance with the parties’agreement (Article 49-1). If there is no agreement (or applicable rules such as JCAA’s
Commercial Arbitration Rules), each party bears the costs it has disbursed with respect
to the proceedings (Article 49-2). The JAL does not provide that the losing party shouldsystematically bear the costs.
Mediation and ADR
There is no obligation to pursue alternatives to litigation (except for court-annexed
mediation, which is mandatory at first instance for family disputes and certain rent disputes
but is rarely used for large commercial disputes). Japanese people and corporates typically
prefer the amicable settlement of disputes through negotiation over court litigation. Eventhen, a negotiated settlement (wakai) can be made at any time before or during the court
proceedings.
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ADR is available on a voluntary basis in the form of civil mediation under the Law
Concerning the Promotion of the Use of Alternative Dispute Resolution Procedures (Law
No. 151 of 1 December 2004 (ADR Law)). The ADR Law has introduced an accreditation
system for private dispute resolution services, but this is not mandatory. If the parties canreach an agreement, this agreement is put on record by the court and becomes enforceable
in the same manner as a final judgment. Civil mediation procedures are simple and costeffective (costs are fixed) and proceedings are confidential. The relative success of mediationis due to the increasing costs and sophistication of modern litigation and the recognition thatexisting commercial relationships had better be preserved insofar as possible.
Civil litigants can also agree to refer their dispute to civil conciliation (chotei) under the
Civil Conciliation Law (Law No. 222 of 9 June 1951 (CCL)). Conciliation under the
CCL is conducted by a conciliation committee composed of one judge and two or morecivil conciliation commissioners appointed from amongst knowledgeable and experienced
citizens. The committee assists the parties in finding an amicable settlement and usuallysubmits a settlement plan to the parties. If the parties can reach an agreement, this agreement
is put on record by the court and has the same effect as a court judgment and can be enforced
accordingly. If the parties are unable to reach an agreement, the plaintiff must file a suit
before the ordinary courts to pursue their claims.
Arbitration (chusai) is the most frequently used ADR mechanism to resolve largecommercial disputes. The main thrust behind the new JAL based on the UNCITRAL
Model Law discussed above was to encourage the use of arbitration. Although commercial
arbitration has not been used very actively as a means of resolving domestic disputes inJapan, it has gradually become an important option, especially in an international context.
The major ADR institutions in Japan include, with respect to arbitration, JCAA, the Tokyo
Maritime Arbitration Commission (TOMAC) of the Japan Shipping Exchange, the JapanSports Arbitration Agency (JSAA) for sports-related disputes, and the Japan Intellectual
Property Arbitration Center (JIPAC) for IP-related disputes. For mediation, institutions
include the courts, the Financial Instruments Mediation Assistance Center (FINMAC),
and the Japan Bankers’ Association. A number of domestic construction disputes are also
resolved through the Med-Arb process before the Construction Dispute Review Boards
established pursuant to the Construction Business Act. A number of industry-associated(product-specific) trade associations have established permanent dispute resolution
organisations in the wake of the enactment of the Product Liability Law (Law No. 85 of
1 July 1994): the Federation of Pharmaceutical Manufacturers Associations of Japan; theJapan Chemical Industry Association; the Association for Electric Home Appliances; theJapan Automobile Manufacturers Association, Inc.; the Center for Housing Renovation
and Dispute Settlement Support; the Consumer Product Safety Association; the Japan
General Merchandise Promotion Center; the Japan Cosmetic Industry Association; theFire Equipment and Safety Center of Japan; the Japan Toy Association; and the Japan
Construction Material & Housing Equipment Industries Federation, etc.
In 2017, the Japanese government announced its intention to establish a new, dedicateddispute resolution centre to bring various dispute resolution bodies, such as JCAA, under
the same umbrella in a more internationally focused environment, and to raise the profile ofinternational arbitration in Japan at a time when there is a noticeable uptick in the numberof disputes involving Japanese companies. As a result, the first Japan International Dispute
Resolution Center (JIDRC) was established in early 2018 in Osaka, followed by a second
JIDRC facility established in Tokyo (JIDRC-Tokyo) in March 2020. The JIDRC facilities
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provide a venue for parties to hold hearings on cross-border disputes under proceduraland substantive rules of their choosing. The JIDRC facilities can be used for institutionalor ad hoc arbitrations and other ADR procedures. On 4 June 2019, SIAC entered into amemorandum of understanding (MOU) with the Japan Association of Arbitrators (JAA) and
JIDRC to promote international arbitration as a preferred method of dispute resolution for
resolving international disputes. Under the MOU, SIAC will work with the JAA and JIDRC
to jointly promote international arbitration through conferences, seminars, workshops andtraining programmes on international arbitration in Japan and Singapore.
In addition, Doshisha University and the JAA opened an international mediation centre in
Kyoto in November 2018, in collaboration with the Singapore International Mediation Centre(SIMC). The new mediation centre (the Japan International Mediation Center in Kyoto, or
JIMC-Kyoto) is headquartered at Doshisha University. It relies on a system similar to the ArbMed-Arb, which is in place between SIAC and the SIMC in Singapore and gives parties theopportunity to resolve disputes referred to arbitration through mediation first. In September
2020, JIMC-Kyoto and the SIMC launched a joint mediation protocol, which provides crossborder businesses with an expedited online mediation amid the COVID-19 pandemic.
In May 2020, the Foreign Lawyers Act was amended to promote international arbitration in
Japan. In order to boost international arbitration, the amendments aim to expand the scopeof services that can be rendered by Registered Foreign Lawyers involved in arbitration
proceedings.
In April 2023, a bill of law for the implementation of the Singapore Mediation Convention in
Japan was approved by the Japanese Diet. Japan is not yet a party to the Singapore Mediation
Convention but is set to adhere thereto and the new legislation sets out a mechanism for theenforcement of international settlement agreements resulting from mediation concluded by
the parties to resolve a commercial dispute.
Regulatory investigations
There are a variety of regulatory investigations that cannot be summarised here (and as
many watchdogs). However, the main Japanese regulatory authorities are as follows:• The Public Prosecutor’s Office, which investigates and prosecutes criminal matters ingeneral (assisted by the police).
• The Ministry of Justice, which has supervisory responsibility for matters regulated by
the Companies Act (Law No. 86 of 26 July 2005), the Commercial Code and the CCP.
• The Ministry of Economy, Trade and Industry (METI) for various economic violations
including under the Unfair Competition Prevention Law (Law No. 47 of 19 May 1993).
• The Ministry of Finance (MOF), which is in charge of matters regulated by the Foreign
Exchange and Foreign Trade Law.
• The Ministry of Health, Labour and Welfare, in relation to regulatory matters concerning
pharmaceuticals and medical devices.
• The Financial Services Agency (FSA) and the Securities and Exchange SurveillanceCommission (SESC), which deal with violations of the Financial Instruments andExchange Law (Law No. 25 of 13 April 1948).
• The JFTC, for antitrust violations including unfair practices and cartels under the Lawon the Prohibition of Private Monopolization and Maintenance of Fair Trade (Law
No. 54 of 14 April 1947), and violations of the Law against Delays in Payment of
Subcontract Proceeds, Etc. to Subcontractors.
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The Japan Financial Intelligence Center (JAFIC) within the National Police Agency,
which deals with money laundering investigations and terrorism.
• The Personal Information Protection Commission for the supervision and handling ofdata protection issues under the Protection of Personal Information Law (Law No. 57
of 30 May 2003).
The relevant authorities can use various investigation methods, including voluntary andcompulsory information requests. They can also apply to a court for a search warrant inserious cases. Where an investigative authority concludes that a crime has been committed,
it can refer the matter to the police and/or the public prosecutor.

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Shinya Tago
Tel: +81 3 3214 6205 / Email: stago@iwatagodo.com
Shinya Tago is a Japanese attorney-at-law, admitted to the New York StateBar Association, managing partner and a member of the International
Practice Committee of Iwata Godo. His practice encompasses a broad rangeof litigation including general commercial litigation, securities litigation,
shareholder derivative suits, tort claims (including product liability disputes),domestic and international arbitration, conciliation and mediation. Shinya
Tago has extensive experience dealing with complicated cross-borderdisputes involving Japanese and non-Japanese parties and particular expertisein representing foreign clients in the Japanese courts. Shinya Tago served asa professor at the Hitotsubashi University Law School.
Takuya Uenishi
Tel: +81 3 3214 6205 / Email: tuenishi@iwatagodo.com
Takuya Uenishi is a Japanese attorney-at-law (who has passed the New YorkState Bar Examination) and partner. He has vast experience representing
financial institutions (Japanese mega-banks, regional banks, trust banks,etc.) in litigations and cross-border transactions. He also has extensive
experience as a litigator involved in corporate-related lawsuits, damages suits,competition law-related disputes, and labour disputes. He was seconded to
the legal department of a Japanese mega-bank from 2014 to 2016. Takuya
Uenishi graduated from the University of Tokyo School of Law (J.D., 2010)
and UC Berkeley School of Law (LL.M., 2019).
Landry Guesdon
Tel: +81 3 3214 6205 / Email: lguesdon@iwatagodo.com
Landry Guesdon is a registered foreign attorney-at-law and member of theInternational Practice Committee of Iwata Godo. He has extensive experiencein mergers and acquisitions, joint ventures and general corporate mattersand antitrust spanning numerous industries (pharmaceuticals and medical
devices, cosmetics, defence and aerospace, food and agriculture, consumer
and retail, general industrials, energy and utilities). Landry Guesdon hasreceived a B.A. in law from the University of Kent in Canterbury and an
LL.M. from the University of Paris.

Iwata Godo
Marunouchi Bldg. 15 floor, 2-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-6315, Japan
Tel: +81 3 3214 6205 / Fax: +81 3 3214 6209 / URL: www.iwatagodo.comth

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