Asserting the Statute of Limitations Defense in Japan: Who Can Invoke "Jikō"?

In previous discussions, we've explored the concept of Jikō (時効) in Japanese law – the legal doctrine encompassing both acquisitive prescription (acquiring rights through time) and extinctive prescription (the extinguishment of claims or rights due to non-exercise, akin to statutes of limitations). A critical aspect of this doctrine, particularly when it comes to defending against a stale claim or solidifying a right acquired through long possession, is the act of "invocation" or Jikō no En'yō (時効の援用). Simply because a prescription period has run its course does not always mean its legal effects automatically apply in every situation, especially in legal proceedings. The party who stands to benefit from the completed prescription must typically take an affirmative step to claim that benefit. This article delves into the meaning of invoking prescription, who is entitled to do so, the methods and timing involved, and the legal consequences under Article 145 of the Japanese Civil Code.

What is "Invocation of Prescription" (Jikō no En'yō)?

Article 145 of the Japanese Civil Code provides the foundation: "Prescription must be invoked by a party (including a guarantor, property surety, third-party acquirer of the thing that is the object of prescription, and any other person who has a direct interest in the benefit of prescription)."

Invocation of prescription is the formal act by which a person who stands to gain a legal advantage from the completion of a statutory prescription period (e.g., a debtor whose obligation would be extinguished, or a possessor who would acquire ownership) expresses their intention to receive that specific legal benefit. It is an assertion of the completed prescription.

Why is Invocation Necessary? The Principle of Party Autonomy

The requirement for invocation, rather than automatic application of prescription in all contexts, reflects several underlying legal principles, primarily centered on party autonomy:

1. Respect for the Benefiting Party's Choice: The law recognizes that a party who could benefit from prescription might, for various personal or commercial reasons, choose not to do so. For instance, a debtor might feel a moral obligation to repay a debt even if it has become time-barred, or they might wish to maintain a good ongoing business relationship with the creditor. Requiring invocation allows this choice.
2. Legal Certainty and Definitive Effect: From a theoretical standpoint, the prevailing view in Japanese legal scholarship (known as the Kōka Kakutei Ishi Setsu - 効果確定意思説, or "Effect-Determining Will View") is that the legal effect of a completed prescription period (e.g., the actual extinguishment of a debt) remains somewhat uncertain or inchoate until it is invoked. The act of invocation makes this effect definitive and conclusive. While a minority view treats completed prescription as creating a substantive right to invoke or a defense that, when exercised, then causes the legal effect (more akin to the German concept of Einrede), the practical outcome is similar: without invocation, the benefit is not realized.
3. Procedural Fairness in Litigation: In court proceedings, if prescription is not pleaded (invoked) as a defense by the defendant, the court will generally not consider it on its own initiative (sua sponte). This is consistent with the adversarial nature of litigation, where parties are responsible for raising their own defenses.

Thus, invocation transforms a potential benefit (the completion of a prescription period) into an actual, legally recognized consequence.

Who Can Invoke Prescription? The Scope of En'yō-kensha (援用権者)

Article 145, as revised by the 2017 Civil Code reforms (effective 2020), clarifies and to some extent codifies prior case law regarding who is entitled to invoke prescription. The individuals or entities who can invoke are broadly categorized as:

A. "Parties" (Tōjisha - 当事者)

This refers to those who are directly and primarily affected by the completion of the prescription – those who directly gain a right or are relieved of an obligation:

• In Acquisitive Prescription (Shutoku Jikō): The person who has fulfilled the requirements of possession for the statutory period and thus stands to acquire the property right (e.g., ownership).
• In Extinctive Prescription (Shōmetsu Jikō): The obligor (debtor) whose obligation or liability is extinguished by the passage of time (e.g., a borrower whose debt becomes time-barred).

B. Other Persons with a "Direct Interest" in the Benefit of Prescription (Chokusetsu no Rieki o Yūsuru Mono - 直接の利益を有する者)

This category extends the right to invoke prescription beyond the immediate parties to others whose own legal positions are directly and substantially improved if the prescription is effectively established for the primary "party" (e.g., the debtor). The interest must be a "direct" legal interest, not merely an indirect, factual, or economic benefit. Key examples recognized by case law and now reflected in the statutory language include:

1. Guarantors (Hoshōnin - 保証人): A guarantor who has guaranteed a principal debt can invoke the extinctive prescription of that principal debt. This is because if the principal debt is extinguished by prescription, the guarantor's obligation, which is accessory to the principal debt, is also extinguished (Civil Code, Article 457, Paragraph 1). This was established by early case law (e.g., Daishin'in judgment, March 6, 1915, Minroku Vol. 21, p. 297).
2. Property Sureties (Butsujō Hoshōnin - 物上保証人): A person who has provided their own property as security (e.g., by creating a mortgage) for the debt of another can invoke the extinctive prescription of that secured debt. If the debt is extinguished, the security interest (like the mortgage) on their property is also extinguished due to its accessory nature.
3. Third-Party Acquirers of Mortgaged Property (Teitō Fudōsan no Daisan Shutokusha - 抵当不動産の第三取得者): Similarly, a person who acquires property that is already encumbered by a mortgage securing a debt can invoke the extinctive prescription of that secured debt. The extinguishment of the debt would lead to the extinguishment of the mortgage, freeing their acquired property from the encumbrance (Daishin'in judgment, May 16, 1938, Minshu Vol. 17, p. 820 [Hyakusen I-42]).
4. Subsequent Acquirers of Property Subject to Acquisitive Prescription by Another: This is a more complex scenario. If person A completes the requirements for acquisitive prescription of land originally owned by X, this means A has acquired title from X. If, subsequently, X purports to sell the same land to B, and B registers this purchase, B's title is precarious if A's prior acquisition is valid. In such a situation, B, to defend their own acquired title (or challenge a claim by A if A hasn't registered), might need to argue about the validity of A's prescription. The Supreme Court (judgment of October 30, 1981, Minshu Vol. 35, No. 7, p. 1199 [Hyakusen I-41]) has dealt with situations where a subsequent acquirer from the original owner (X) invokes the non-completion of prescription by the possessor (A) or defects in it. Conversely, if B's interest is to show X had no title to pass because A had already acquired it by prescription, B might invoke A's completed prescription against X. The "direct interest" lies in clarifying the chain of title and B's own ownership status.

Parties Who Do NOT Typically Qualify (Indirect Interest Only):

• General Creditors of the Debtor: A general, unsecured creditor of a debtor usually cannot invoke the extinctive prescription of another separate debt owed by that same debtor to a different creditor. The rationale is that any benefit to the first creditor (e.g., increasing the pool of the debtor's assets available for satisfaction of their own claim) is considered merely an indirect or factual interest, not a direct legal interest in the extinguishment of the specific other debt (Daishin'in judgment, February 7, 1919, Minroku Vol. 25, p. 167).
• Second-Rank Mortgagee vs. First-Rank Mortgagee's Claim: Historically, Japanese case law was negative on allowing a second-rank mortgagee to invoke the extinctive prescription of the debt secured by a first-rank mortgage simply to improve their own priority by eliminating the senior encumbrance (Daishin'in judgment, June 18, 1942, Minshu Vol. 21, p. 503). The benefit was deemed indirect. Whether the broader "direct interest" language introduced into Article 145 by the 2017/2020 reforms might lead to a re-evaluation of such specific scenarios remains a point of ongoing legal discussion, though the traditional view emphasizes a very direct link.

How and When is Prescription Invoked?

Method of Invocation

Invocation is a unilateral manifestation of intention by the entitled person (en'yō-kensha). No specific form is mandated by the Civil Code. It can be done:

• Out-of-Court (Saiban-gai - 裁判外): For example, by sending a clear written notice to the party against whom the benefit of prescription is being asserted (e.g., a debtor sending a letter to a creditor stating they are invoking prescription for a time-barred debt).
• In-Court (Saiban-jō - 裁判上): This is the most common and definitive way. Prescription is typically invoked as an affirmative defense in a lawsuit. If a creditor sues a debtor for a time-barred debt, the debtor must explicitly plead or assert the defense of completed prescription in their answer or other court filings.

Timing of Invocation

Invocation can be made at any time after the statutory prescription period has fully completed. There is no upper time limit for the act of invocation itself, meaning a party doesn't lose the right to invoke merely because more time has passed since completion.

However, there are practical and legal limitations:

• Waiver of the Benefit of Prescription (Jikō Rieki no Hōki): If, after the prescription period has completed, the benefiting party acts in a manner inconsistent with an intention to invoke it – most notably, by acknowledging the debt (e.g., making a partial payment, promising to pay) – they may be deemed to have waived their right to invoke prescription or may be barred from invoking it later under the principle of good faith or estoppel. This is because such an acknowledgment creates a legitimate expectation in the creditor that the debt will be honored despite the completion of the prescription period.
• Bad Faith Invocation: While rare, an excessively delayed invocation after engaging in conduct that led the other party to believe prescription would not be relied upon might be challenged as an abuse of rights or contrary to good faith.

To Whom is Invocation Addressed (En'yō no Aitegata)?

The invocation of prescription must essentially be directed, in its legal effect, to the party whose right will be affected by the successful assertion of prescription.

• For extinctive prescription, the debtor (or other benefiting party like a guarantor) invokes it against the creditor whose claim is sought to be extinguished.
• For acquisitive prescription, the person acquiring the right invokes it against the original owner whose right is sought to be extinguished.

When invoked in court as a defense, the plea is formally made to the court, but its substantive legal effect is asserted against the opposing party in the litigation.

Legal Effect of Invocation

Once prescription is validly invoked by an entitled party:

1. Definitive Establishment of Prescription's Legal Consequence: The invocation makes the legal effect of the completed prescription (i.e., the acquisition of the right or the extinguishment of the claim) definite, conclusive, and legally enforceable as between the relevant parties.
2. Retroactive Effect: As stipulated by Article 144 of the Civil Code, this effect is retroactive to the commencement date of the prescription period.
3. Binding on Courts: If prescription is properly pleaded and proven in litigation, the court is bound to recognize its effect and rule accordingly (e.g., dismiss a time-barred claim).

Scope of Effect: Who Benefits When One Party Invokes? (Relative vs. Absolute Effect)

A crucial aspect of invocation is determining the scope of its effect, particularly in situations involving multiple related parties.

General Principle: Relative Effect (Sōtai Kō - 相対効)

The predominant principle in Japanese law is that the invocation of prescription by one person has only a relative effect, meaning it primarily benefits only the person who invoked it. The legal consequences are generally confined to the relationship between the invoker and the party against whom prescription is asserted.

• Example (Joint and Several Debtors): If there are multiple joint and several debtors (rentai saimu-sha) for a single debt, and only one of them successfully invokes extinctive prescription for their portion of the obligation (to the extent their obligation is personally extinguished or reduced by their invocation), this does not automatically extinguish or reduce the obligations of the other co-debtors towards the creditor (unless the obligation is truly indivisible by its nature). The creditor may still be able to pursue the remaining co-debtors for their respective shares or the full amount, depending on the nature of the joint and several liability.

Exceptions and Situations Leading to a Broader or "Absolute" Effect

While relativity is the general rule, there are important exceptions or situations where the invocation by one party can have a broader, sometimes termed "absolute" (zettai kō), effect, often due to the accessory nature of certain rights or the indivisible nature of the underlying legal relationship:

1. Guarantor Invoking Prescription of the Principal Debt: As mentioned earlier, if a guarantor successfully invokes the extinctive prescription of the principal debt owed by the main debtor, this not only benefits the guarantor by extinguishing their own accessory guarantee obligation (Article 457, Paragraph 1) but also practically prevents the creditor from recovering that prescribed portion of the principal debt from the principal debtor through that particular guarantor's payment.
2. Third-Party Acquirer of Mortgaged Property Invoking Prescription of Secured Debt: When such a party invokes the prescription of the secured debt, it leads to the extinguishment of the mortgage encumbering their property. This has an absolute effect concerning the removal of that specific encumbrance on that property.
3. Indivisible Obligations (Fukabun Saimu - 不可分債務): For obligations that are inherently indivisible by their nature (e.g., the obligation to deliver a specific, unique item), an argument can be made that if prescription extinguishes the obligation for one co-obligor, it might effectively extinguish it for all, as partial performance is impossible. However, the precise application depends on the specifics.
4. Rights Whose Extinction is Inherently Absolute: For some types of rights, their very nature implies that if they are extinguished for one purpose or against one party due to prescription, their substantive basis may be lost for all practical purposes. For example, if the underlying substantive right that supports a particular registration on a public register is extinguished by prescription and this is successfully invoked, the registration itself might become substantively baseless and subject to correction or removal, which would have a broader effect.

Conclusion: The Strategic Importance of Invoking Prescription in Japan

The act of invoking prescription, Jikō no En'yō, is far more than a mere procedural technicality in Japanese civil law. It is a substantive act of will by which a party who stands to benefit from the passage of a statutory time limit affirmatively claims that benefit, thereby making the legal effects of prescription (acquisition of a right or extinguishment of a claim) definite and judicially enforceable. Understanding who is entitled to invoke prescription – not just the direct "parties" but also certain "other persons who have a direct interest" – as well as the proper methods, timing, and legal consequences of doing so, is of paramount strategic importance. Whether asserting rights gained through long use or defending against stale claims, the invocation of Jikō is a critical step in shaping legal outcomes and ensuring that the passage of time is given its due legal effect in Japanese legal proceedings.