Beyond Res Judicata: How Do Issue Preclusion ('Sōtenkō') and Good Faith ('Shingisoku') Prevent Re-litigation in Japan?

The doctrine of res judicata (既判力 - kihanryoku) is fundamental to ensuring the finality of court judgments in Japan. As a general rule, it prevents the parties from re-litigating the same legal claim (soshōbutsu - 訴訟物, or subject matter of litigation) that has already been definitively decided by a final and binding judgment. However, a distinctive feature of Japanese res judicata is that its objective scope is typically limited to the ultimate conclusion pronounced in the main operative text of the judgment (判決主文 - hanketsu shubun), as stipulated by Article 114(1) of the Code of Civil Procedure (CCP). The detailed factual findings and legal reasoning (判決理由 - hanketsu riyū) supporting that conclusion do not, in themselves, generally acquire independent res judicata effect.

This limitation, while promoting judicial flexibility in reasoning, can create a potential lacuna: what prevents parties from re-litigating specific issues that were thoroughly debated and decided in a prior lawsuit, even if the subsequent lawsuit involves a formally different legal claim? Japanese civil procedure addresses this challenge not primarily through an expanded statutory definition of res judicata, but through the application of related doctrines, most notably a judicially and academically developed concept akin to issue preclusion, often referred to as sōtenkō (争点効 - issue effect), and the overarching principle of good faith and fair dealing in litigation (信義誠実の原則 - shingi seijitsu no gensoku, or simply 信義則 - shingisoku), codified in Article 2 of the CCP. This article explores how these mechanisms function to prevent the inefficient and potentially unfair re-adjudication of matters already settled.

The Limits of Formal Res Judicata and the Need for Broader Preclusion

Because formal res judicata in Japan is largely claim-preclusive and tied to the specific soshōbutsu identified in the judgment's main text, it may not always bar the re-litigation of specific factual or legal issues that were decided as part of the court's reasoning in a prior case, especially when a different legal claim is asserted in a subsequent lawsuit.

Consider an illustrative scenario based on the case presented in Chapter 4-16 of the reference material:

• Prior Suit (zenso): The original landowner (A) sued X (who had acquired title to certain land from B; B, in turn, had purportedly acquired title from A through a series of complex transactions involving a loan, security arrangements, and a later confirmation of ownership transfer). A's suit sought the transfer of title registration back to A, based on A's assertion of continued ownership and the invalidity or redeemable nature of the transactions that led to X holding the registered title. The court dismissed A's claim, finding that A's factual assertions about the nature of these transactions (e.g., that it was merely a disguised loan with a right to redeem which A had validly exercised) were not proven. This judgment of dismissal became final and binding.
• Current Suit (honso): X, whose ownership was effectively (though perhaps not directly via res judicata on "ownership" itself) upheld by the dismissal of A's claim, now sues Y-ra (A's heirs) for the removal of a building situated on the land and for vacation of the land.
• The Question: In this current suit, can Y-ra (who, as A's heirs, are generally bound by judgments against A to the same extent A was) re-assert the very same factual arguments about the A-B-X transactions that A unsuccessfully put forward in the prior suit, in an attempt to deny X's ownership and thereby defend against X's building removal claim?

Under a strict application of formal res judicata to the soshōbutsu alone, the answer might be yes. The soshōbutsu of the prior suit was A's claim for title transfer to A. The soshōbutsu of the current suit is X's claim for building removal by Y-ra based on X's asserted ownership. These are formally different claims. The findings in the prior suit regarding the nature of the A-B-X transactions were part of the court's reasoning for dismissing A's specific claim for title transfer; these findings would not, by themselves, have res judicata effect concerning X's ownership in the context of a different claim. This potential for re-litigating core underlying issues highlights the need for doctrines that can extend preclusive effects beyond the narrow confines of the previously adjudicated soshōbutsu.

The Emergence of Doctrines Akin to Issue Preclusion (Sōtenkō)

The inefficiency and potential for inconsistent outcomes inherent in allowing parties to repeatedly contest issues already thrashed out led to the development, primarily in academic discourse and with some judicial recognition, of the concept of sōtenkō, or "issue effect." This doctrine functions similarly to the common law concept of issue preclusion (collateral estoppel).

• Sōtenkō (Issue Effect / Issue Preclusion): It is important to note that sōtenkō is not a formally codified doctrine in the Japanese Code of Civil Procedure in the same way that res judicata (claim preclusion) is defined in Article 114. Rather, it is a principle whose application is often justified by invoking the overarching Principle of Good Faith and Fair Dealing in Litigation (Shingisoku), as mandated by CCP Article 2.
• The Core Idea: If a specific factual or legal issue was a central point of dispute (a key "쟁点" - sōten, meaning "contested point" or "issue") in a prior lawsuit, was actually and fully litigated by the parties, and was specifically decided by the court as a necessary component of its reasoning for the judgment in that case, then the parties (and their privies) should generally be precluded from re-litigating that same issue in a subsequent lawsuit between them, even if the overall legal claim (soshōbutsu) in the second suit is different. The rationale is that it would be contrary to good faith and fair play for a party to take a position inconsistent with a matter that has already been thoroughly examined and judicially determined between them.

Typical Requirements for the Application of Sōtenkō (as articulated by influential scholars like Professor Koji Shindo):

1. Centrality of the Issue: The issue in question must have been a major point of contention (shuyō na sōten) in the prior litigation, and its resolution must have been essential to the court's judgment in that case. Trivial or collateral findings are generally not given preclusive effect.
2. Full and Fair Opportunity to Litigate: Both parties must have had a full and fair opportunity to litigate the issue in the prior action. This includes the ability to present evidence, make arguments, and challenge the opponent's position concerning that specific issue. This also implies that the parties had a sufficient incentive to litigate the issue vigorously in the first instance.
3. Actual Decision on the Issue: The court in the prior action must have actually and substantially decided the specific issue in its reasoning. A mere mention or a hypothetical finding is insufficient.
4. Identity of Parties (or Privity): The subsequent litigation in which preclusion is sought must be between the same parties as the prior action, or those in legal privity with them (such as heirs, as in the illustrative case).
5. No Substantive Injustice or Violation of Other Policies: The application of issue preclusion must not lead to a substantively unjust result in the second case or conflict with other overriding legal policies.

If these conditions are met, then in the illustrative scenario, if the factual claims concerning the A-B-X transactions (which were the basis for A's asserted ownership) were indeed a central, fully litigated, and necessarily decided issue in the prior suit where A's claim was dismissed, then Y-ra (as A's heirs) might well be precluded by sōtenkō (or more broadly, by the application of the principle of good faith) from re-asserting these same factual arguments to contest X's ownership in the current building removal suit.

The Overarching Principle of Good Faith (Shingisoku) as a Tool for Preventing Re-litigation (CCP Art. 2)

Article 2 of the CCP imposes a general duty on parties to conduct litigation "in good faith and sincerity." This principle serves as a foundational norm for judicial proceedings and has been increasingly utilized by Japanese courts as a flexible tool to prevent abusive or unfair litigation tactics. This includes barring attempts to re-litigate matters in a manner that undermines the finality of prior judicial resolutions or operates unfairly against an opposing party who has reasonably relied on that prior resolution.

The Supreme Court's Approach:
While the Supreme Court of Japan has historically been cautious about explicitly endorsing the academic doctrine of "sōtenkō" by name, or granting general res judicata-like effect to specific findings within the reasoning of a prior judgment (see, e.g., Supreme Court, June 24, 1969, Hanrei Jihō No. 569, p. 48; Supreme Court, October 4, 1973, Hanrei Jihō No. 725, p. 33), it has effectively achieved similar preclusive results in particular cases by invoking the principle of good faith (shingisoku).

A landmark decision in this regard is the Supreme Court judgment of September 30, 1976 (Minshū Vol. 30, No. 8, p. 799).

• In greatly simplified terms, the facts involved a prior lawsuit by X against Y concerning rights to certain land (based on an alleged redemption agreement following an earlier land reform buy-back process), which was ultimately dismissed. X later filed a new lawsuit against Y concerning the same land, but this time based on a different legal theory—the alleged nullity of the original land reform buy-back itself.
• The Supreme Court dismissed this second lawsuit, holding that its pursuit was contrary to the principle of good faith.
• The Court reasoned, in essence, that the second suit was substantially a "rehash" (mushikaeshi) of the dispute already resolved in the prior suit. X could and should have raised the argument concerning the nullity of the buy-back in the first suit. To bring it as a separate claim years later, particularly when Y had developed a legitimate expectation that the matter was finally settled by the first judgment, was deemed an abusive litigation tactic that unfairly subjected Y to prolonged legal uncertainty.

This 1976 decision and subsequent case law have established that shingisoku can be a powerful tool to bar not just the re-assertion of specific issues, but sometimes even entire subsequent claims, if they are seen as an improper attempt to undermine a prior final resolution.

Factors Often Considered by Courts when Applying Shingisoku for Preclusion:
When determining whether a subsequent claim or argument should be barred by shingisoku in light of prior litigation, courts often consider a range of factors, including:

1. Substantial Identity of the Underlying Dispute: Despite formal differences in the legal claims, is the second suit essentially attempting to re-open and achieve a different outcome on the same core underlying controversy that was addressed in the first suit?
2. Opportunity to Raise in Prior Suit: Could the claim, defense, or specific issue now being raised in the second suit have been reasonably and appropriately raised by the party in the first suit?
3. Opponent's Reliance and Expectation of Finality: Has the party who was successful in the first suit developed a legitimate and reasonable expectation, based on the scope and conduct of that litigation, that the dispute was thereby definitively resolved?
4. Thoroughness of Prior Adjudication: Were the relevant underlying issues actually and substantially addressed, debated, and considered by the court in the first suit, even if not forming the basis of formal res judicata?
5. Party's Incentive to Litigate Vigorously in Prior Suit: Did the party now seeking to re-litigate (or raise a new but related argument) have a sufficient stake and genuine incentive to fully contest all relevant aspects of the matter in the first suit?

Preclusion at the Claim Level versus the Issue Level:
The 1976 Supreme Court decision used shingisoku to dismiss the entire second claim. This represents a broader form of preclusion than that typically associated with sōtenkō, which tends to focus on barring the re-litigation of specific issues. The reference material suggests that sometimes, precluding specific arguments or issues based on shingisoku (which would be functionally very similar to sōtenkō) is sufficient to achieve fairness and efficiency. In other, more egregious cases of re-litigation or vexatious conduct, the court might find it necessary to bar the entire subsequent claim under the good faith principle. The choice of remedy depends on what is necessary to protect the integrity of the prior judicial resolution and to ensure fairness between the parties.

The Impact of the Procedural History of the Prior Suit

The illustrative case in the reference material raises a pertinent question: What if, in the prior suit, the losing party (A) filed an appeal against the first-instance dismissal but then withdrew that appeal, causing the first-instance judgment to become final without appellate review? Does this procedural history affect the potential preclusive force of the findings in that first-instance judgment under doctrines like sōtenkō or shingisoku?

• One might argue that if an appeal is withdrawn before a full appellate hearing and decision, the issues were not as "fully and fairly litigated" through the entire potential judicial process as they might have been had the appeal proceeded to a merits decision by the higher court. This could potentially weaken the argument for preclusion.
• However, a first-instance judgment that becomes final due to the withdrawal of an appeal is, nonetheless, a final and binding judgment. If the proceedings at the first-instance level themselves involved a thorough examination and decision of the key contested issues, the mere act of withdrawing a subsequent appeal may not, by itself, significantly diminish the preclusive effect that might attach to those determinations under sōtenkō or shingisoku. The crucial factor would likely remain the nature and thoroughness of the litigation that actually took place on the relevant issues in the court that rendered the final judgment. A strategic withdrawal of an appeal does not automatically negate the "fully litigated" character of the trial court proceedings if such litigation indeed occurred.

Preclusion of Issues or Claims Not Specifically Raised in the Prior Suit

A more challenging scenario arises when a party, in a subsequent suit, attempts to raise an entirely new legal argument or factual assertion that was not explicitly pleaded or decided in the prior litigation, even if it relates to the same underlying transaction or set of historical facts. The reference material's Setsumon 3 touches upon this: Can Y-ra (A's heirs), in X's current building removal suit, now argue for the first time that the original A-B transaction (which led to B, and subsequently X, acquiring title) was void as a grossly unfair "predatory lending" type arrangement (bōri kōi) contrary to public order and morals (Civil Code Art. 90), a ground that A themselves did not raise in the prior suit?

This involves the question of whether a party can be precluded from raising an argument that they should have raised in the prior proceeding, even if they didn't.

• Strict sōtenkō, focusing on issues "actually litigated and decided," might not directly bar such a new legal argument.
• However, the broader principle of procedural good faith (shingisoku) can play a significant role here. If the new argument is seen as fundamentally attacking the validity of the same set of transactions whose overall consequences were at the heart of the prior dispute, and if the party (or their predecessor) had a full and fair opportunity to raise all possible grounds for challenging those transactions in the first suit, then allowing them to introduce this new ground later could be deemed contrary to good faith. It could be seen as unfairly prolonging the dispute, undermining the opponent's legitimate expectation of finality, and constituting a piecemeal litigation tactic.
• The level of abstraction at which the "dispute" or "issue" from the first suit is defined becomes critical. If the "dispute" in the first suit is characterized very broadly (e.g., "the overall validity of A's claim to ownership based on the historical transactions between A, B, and X"), then a new legal theory attacking those same transactions (like the predatory act argument) might be considered precluded under shingisoku. If defined very narrowly (e.g., only the specific legal arguments A actually pleaded, such as the disguised loan theory), then the new predatory act argument might not be directly barred by the prior adjudication of those narrow points.
• Scholarly concepts like the "dispute point reasonably expected to be settled" (kecchaku kitai sōten), mentioned in the reference material's commentary, attempt to capture this idea: if the overall controversy was understood by the parties to be the central focus of the first suit, then new legal theories attacking the same core subject matter, which could and should have been brought forward at that time, might be precluded in the interests of finality and fairness.

Conclusion

While the formal doctrine of res judicata in Japanese civil procedure is primarily claim-preclusive and its objective scope is tethered to the judgment on the specific subject matter (soshōbutsu) as articulated in the main text of the judgment, the Japanese legal system is not without mechanisms to prevent the inefficient or unfair re-litigation of issues or claims that have already been, or reasonably should have been, definitively resolved. The judicially and academically developed concept of sōtenkō, functioning akin to issue preclusion, and, more broadly, the overarching Principle of Good Faith and Fair Dealing in Litigation (CCP Art. 2), serve as important tools in this regard. Sōtenkō tends to focus on the preclusive effect of specific issues that were actually and fully litigated and decided as essential to a prior judgment. The Principle of Good Faith, on the other hand, provides a more flexible, overarching basis for courts to bar subsequent litigation tactics that are deemed abusive, that unfairly undermine the finality of prior resolutions, or that contradict a party's earlier conduct in a manner that prejudices the opposing party. The application of these doctrines is inherently fact-sensitive, requiring a careful assessment of the nature of both the prior and current litigation, the specific issues involved, the conduct of the parties, and the overall need to strike an appropriate balance between ensuring the finality of judicial decisions and upholding substantive justice.