Challenging Enforceability: How Can Debtors Contest a "Title of Obligation" in Japan via an "Action Opposing Execution" (Seikyu Igi Soshou)?

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

In the Japanese legal system, a "title of obligation" (saimu meigi, 債務名義) serves as the formal authorization for a creditor to initiate compulsory execution against a debtor. However, the existence of such a title does not preclude the debtor from challenging its enforceability if they believe there are substantive reasons why the underlying claim is invalid, has been extinguished, or if the title itself was improperly formed. The primary legal avenue for such a challenge is the "Action Opposing Execution" (seikyū igi soshō, 請求異議訴訟), a specific type of lawsuit designed to neutralize the executory power of a title of obligation.

What is an Action Opposing Execution (Seikyū Igi Soshō)?

An Action Opposing Execution, as stipulated in Article 35 of Japan's Civil Execution Act (民事執行法 - Minji Shikkō Hō), is a lawsuit filed by a debtor (or a party similarly bound by a title of obligation) who asserts that the claim set forth in the title of obligation does not actually exist or is otherwise substantively unfounded. The objective of this action is not merely to delay execution, but to obtain a court judgment that renders the specific title of obligation unenforceable, thereby preventing the creditor from initiating or continuing compulsory execution based on it.

Under Japanese legal theory, this type of action is generally characterized as a "formative action" (keisei soshō, 形成訴訟). This means it's a lawsuit that seeks to create, alter, or extinguish an existing legal right or status. In this context, the seikyū igi soshō aims to extinguish the executory power (執行力 - shikkōryoku) attached to the title of obligation. The "subject matter of the litigation" (訴訟物 - soshōbutsu) is often debated among scholars, with a common view being that it is the debtor's "right to object" to the execution based on substantive grounds.

When Can an Action Opposing Execution Be Filed?

The availability and timing of a seikyū igi soshō are subject to specific rules:

  • Eligible Titles of Obligation: This action can generally be brought against any of the types of titles of obligation enumerated in Article 22 of the Civil Execution Act. This includes final judgments, notarized deeds of execution, judicial settlement records, and others.
  • Exceptions for Titles Still Subject to Ordinary Challenge: A significant exception exists for titles of obligation whose validity or content can still be contested through ordinary appeal or objection procedures. For example, a judgment with a declaration of provisional execution that is not yet final and binding, or a payment order with such a declaration, cannot be the subject of a seikyū igi soshō (proviso to Article 35, paragraph 1, Civil Execution Act). In these instances, the debtor is expected to utilize the specific appeal or objection routes available for that particular type of title to challenge its merits or enforceability. Once those avenues are exhausted and the title becomes final, a seikyū igi soshō may then become available if new grounds for objection arise.
  • Timing of the Action: A seikyū igi soshō can be initiated at any point after the title of obligation has come into existence and before the compulsory execution based upon it has been fully completed. This means it can be filed pre-emptively before any execution measures have commenced, or while execution is already underway. If execution is completed, the seikyū igi soshō generally loses its purpose, and the debtor might then need to pursue other remedies, such as an action for unjust enrichment, if applicable.

Grounds for Objection (異議事由 - Igi Jiyū)

The "grounds for objection" (igi jiyū) are the substantive reasons a debtor can raise to argue that the claim embodied in the title of obligation should not be enforced. The Civil Execution Act distinguishes between grounds applicable to all titles and those specific to non-judicial titles.

1. Grounds Common to All Titles of Obligation (Article 35, paragraph 1, first part, Civil Execution Act):
These grounds relate to the non-existence or alteration of the underlying claim itself. Common examples include:

  • Non-existence or Invalidity of the Claim:
    • The contract or legal relationship giving rise to the claim never came into existence (e.g., lack of mutual assent, fatal defect in formation).
    • The claim is null and void from the outset due to factors like mistake (sakugo), fictitious manifestation of intent (kyogi hyōji), or violation of public policy.
  • Extinguishment of the Claim:
    • The claim has been extinguished through payment (bensai), release or waiver by the creditor (menjo), completion of the statute of limitations (prescription - jikō), rescission (kaijo) or cancellation (torikeshi) of the underlying contract, or set-off (sōsai).
  • Modification of the Claim or Debtor's Obligation:
    • The terms of the obligation have been altered by a subsequent agreement (e.g., conditions changed, a moratorium on payment granted by the creditor).
    • The claim has been transferred to another party, or the debt has been assumed by someone else under conditions that release the original debtor.
  • Agreement Not to Execute: Even if the underlying claim is valid, if the creditor and debtor have entered into a legally binding agreement that the creditor will not enforce the specific title of obligation, this can constitute a ground for objection. The Supreme Court of Japan affirmed on September 11, 2006, that such an agreement can be the basis for a seikyū igi soshō.
  • Abuse of Rights: If the creditor's attempt to execute the title of obligation would constitute an abuse of their rights under Article 1, paragraph 3 of the Civil Code (which mandates good faith and prohibits abuse of rights), this can be a ground. A Supreme Court decision on May 24, 1962, recognized this in a case where a creditor, after the debtor (who was liable for an accident) had passed away, sought to execute against the debtor's grieving parents for a sum that was arguably no longer justified due to changed circumstances (the creditor, initially deemed unable to work, had recovered and resumed business).

2. Grounds Specific to Non-Judicial Titles of Obligation (Article 35, paragraph 1, second part, Civil Execution Act):
For titles of obligation not created directly by a court judgment after adversarial proceedings (such as notarized deeds of execution or records of judicial settlement), defects in their formation process can also serve as grounds for objection. This is because the procedural safeguards ensuring the validity of these titles may differ from those of a fully litigated judgment. Examples include:

  • Lack of Authority: If a notarized deed of execution was created by an agent acting without proper authority from the debtor.
  • Defective Consent: If a judicial settlement recorded in court was based on a fundamental mistake, duress, or fraud affecting the debtor's consent.

Even in the case of court-issued titles like judgments, if they were procured through fraudulent means that fundamentally undermined the integrity of the judicial process (e.g., the defendant was never properly served due to the plaintiff's deception and was entirely unaware of the proceedings), their enforceability against that defendant could be challenged. The Supreme Court of Japan, in a decision on February 27, 1968, held that a title of obligation created under such circumstances would be invalid against the defrauded party, suggesting that defects in the formation of even judicial titles, if sufficiently severe, might be raised in an seikyū igi soshō, possibly by analogy to the rules for non-judicial titles.

The Crucial "Temporal Limitation" on Grounds for Objection (時の制限 - Toki no Seigen)

A critical aspect of the seikyū igi soshō is the temporal limitation imposed on the grounds for objection when the title of obligation is a final and binding judgment or another title with equivalent kihanryoku (res judicata effect).

  • The Kihanryoku (Res Judicata) Barrier (Article 35, paragraph 2, Civil Execution Act):
    For such titles, the debtor can only raise objections based on facts or legal grounds that arose after the "critical time" (kijunji, 基準時) of that title. The kijunji is generally the point at which oral arguments were concluded in the final fact-finding instance of the proceedings that led to the judgment (or the creation of the settlement/mediation record).
    The rationale for this rule is the principle of kihanryoku. Issues that were, or could have been, litigated and decided in the original proceedings cannot be re-litigated. Allowing objections based on pre-kijunji facts would undermine the finality of judgments and lead to endless disputes.
  • What Constitutes a "Post-Kijunji" Ground?
    • Typically, this includes events like payment of the debt after the judgment became final, a release of the debt by the creditor after the judgment, or the claim becoming prescribed after the judgment.
    • The exercise of certain rights after the kijunji, even if the underlying basis for the right existed before, can sometimes be raised.
      • Set-off (相殺 - sōsai): A debtor can generally exercise a right of set-off using a claim they hold against the creditor, even if that claim arose before the kijunji, as long as the declaration of set-off (the act that effects the set-off) is made after the kijunji. The Supreme Court affirmed this in a decision on April 2, 1965.
      • Statutory Right to Demand Purchase of a Building by a Land Lessee (建物買取請求権 - tatemono kaitori seikyūken): In landlord-tenant law, under certain conditions when a land lease for building purposes terminates, the lessee has a statutory right to demand that the lessor purchase the building on the land. The Supreme Court held on December 15, 1995, that a lessee can exercise this right and raise it as a ground in a seikyū igi soshō against a judgment ordering the removal of the building, even if the facts giving rise to this right existed before the kijunji of the removal judgment. The court reasoned that this right is distinct from defenses that could have been raised in the original removal action and aims to achieve a fair economic outcome upon lease termination.
      • Rights of Rescission/Cancellation: In contrast, if a right to rescind or cancel an underlying contract (e.g., due to fraud or mistake) existed before the kijunji but was not exercised during the proceedings leading to the judgment, the debtor generally cannot exercise it after the kijunji and then use it as a ground for a seikyū igi soshō. The Supreme Court addressed this in a decision on October 23, 1980, emphasizing the preclusive effect of kihanryoku.
  • No Temporal Limitation for Titles Without Kihanryoku:
    For titles of obligation that do not possess kihanryoku, such as notarized deeds of execution or payment orders (before they become final and binding like a judgment), this temporal limitation does not apply. The debtor can raise any valid substantive objection, regardless of when the facts underlying that objection arose, even if they predate the creation of the title itself.

Procedural Aspects of an Action Opposing Execution

  • Obligation to Assert All Grounds Simultaneously (Article 35, paragraph 3, applying Article 34, paragraph 2, Civil Execution Act mutatis mutandis): If a debtor has multiple grounds for challenging the enforceability of a title of obligation, they are generally required to assert all of them in the same seikyū igi soshō. This rule aims to prevent debtors from filing a series of lawsuits on different grounds to unduly delay execution. "Simultaneously" here means within the same litigation proceeding, not necessarily all in the initial complaint; grounds can be added during the course of that single action.
  • Jurisdiction (管轄 - Kankatsu): The seikyū igi soshō falls under the exclusive jurisdiction of specific courts, determined by the type of title of obligation being challenged (Article 33, paragraph 2, applied mutatis mutandis by Article 35, paragraph 3). For example:
    • For a final judgment or other court decision: The court of first instance that rendered the judgment.
    • For a notarized deed of execution: The district court having jurisdiction over the debtor's general forum (place of residence or principal office).
    • For a judicial settlement or mediation record: The court where the settlement or mediation was concluded (District Court, Family Court, or Summary Court).
  • Parties (当事者適格 - Tōjisha Tekikaku):
    • The plaintiff must be the person against whom the title of obligation is enforceable (usually the debtor named in the title, or their successor).
    • The defendant is the person in whose favor the title of obligation is enforceable (the creditor named in the title, or their successor).
  • Trial and Judgment: The seikyū igi soshō proceeds as a normal civil lawsuit, with an exchange of pleadings, presentation of evidence, and oral arguments before the court. If the court finds the debtor's objections to be valid, it will issue a judgment declaring that compulsory execution based on the specific title of obligation is not permitted ("fukyō o motomeru", 不許を求める). This judgment effectively strips the title of its executory power between the parties. The debtor can then submit this judgment to the executing agency to halt any ongoing execution or prevent its commencement (Article 39, paragraph 1, item 1; Article 40, paragraph 1, Civil Execution Act).

Suspending Execution During the Lawsuit: Provisional Measures (仮の処分 - Kari no Shobun)

Crucially, the mere filing of an Action Opposing Execution does not automatically stop any compulsory execution proceedings that are already underway or about to commence (Article 36, paragraph 1, Civil Execution Act). If the debtor wishes to prevent execution from proceeding while the seikyū igi soshō is pending, they must make a separate application to the court hearing the seikyū igi soshō for a provisional measure (a type of temporary injunction) ordering the stay or suspension of the compulsory execution.

The court will grant such a provisional measure if it finds that:

  1. The grounds for objection asserted in the seikyū igi soshō appear to be legally well-founded.
  2. There is a prima facie showing (疎明 - somei) of the factual basis for these grounds.

The court typically requires the debtor to provide security (a monetary deposit or a bank guarantee) as a condition for ordering the stay of execution, to cover any potential damages the creditor might suffer from the delay if the seikyū igi soshō ultimately fails. This provisional stay is vital because if execution is completed before the seikyū igi soshō is decided, the lawsuit may become moot, leaving the debtor with only a potential, and often more difficult, claim for damages or unjust enrichment.

Conclusion

The Action Opposing Execution (Seikyū Igi Soshō) represents a fundamental procedural safeguard for debtors within the Japanese civil execution framework. It provides a formal judicial avenue to contest the substantive legitimacy of a claim underlying a title of obligation, ensuring that enforcement actions are not carried out based on claims that are, in reality, invalid, extinguished, or otherwise unenforceable. A thorough understanding of the permissible grounds, the critical temporal limitations related to kihanryoku, and the necessity of proactively seeking a stay of execution are essential for any debtor facing the prospect of compulsory enforcement in Japan and wishing to assert their defenses.