The assignment of a claim—the transfer of a right to receive payment or performance from an obligor—is a common commercial practice. However, complications arise when an assignor, either mistakenly or fraudulently, assigns the same claim to multiple assignees. This scenario, known as a double assignment (債権の二重譲渡 - saiken no nijū jōto), creates a conflict: which assignee has the superior right to the claim? Japanese law provides a specific framework for resolving such disputes, primarily centered on the concept of perfection against third parties. Understanding these rules is crucial for any entity acquiring claims governed by Japanese law.

This article examines how Japanese law determines priority in cases of double assignment, focusing on the mechanisms provided by the Civil Code and the Act on Special Rules for Claim Assignments.

I. The Basic Principle: Perfection is Paramount

Under Japanese law, an assignment agreement is generally valid and binding between the assignor and the assignee upon their mutual consent. No specific formalities are typically required for the formation of this initial contract. However, to assert rights against third parties—which critically includes other assignees of the same claim—the assignment must be "perfected." In a double assignment scenario, the assignee who first properly perfects their rights against third parties will generally prevail.

II. Priority under the Civil Code: The Certified Date (Kakutei Hizuke) as the Decisive Factor

The primary method for perfecting a claim assignment against third parties under the Japanese Civil Code is outlined in Article 467, Paragraph 2. This provision stipulates that the notice of assignment from the assignor to the obligor, or the obligor's consent to the assignment, must be made by an instrument bearing a certified date (確定日付 - kakutei hizuke).

A. The "First to Perfect via Certified Date" Rule

When two or more assignees have been assigned the same claim, and they all rely on the Civil Code method for perfection, priority is determined by the chronological order in which they achieve perfection through an instrument with a certified date.

A landmark Supreme Court judgment of March 7, 1974 (Shōwa 49) (often cited as Case 127 in relevant casebooks) clarified a critical aspect of this rule: priority is not based merely on the date appearing on the certified instrument itself (e.g., the date a notary public attested the document). Instead, it is determined by:

1. The time of arrival of the assignor's notice of assignment (which bears a certified date) at the obligor; or
2. The date of the obligor's consent to the assignment, provided that consent itself is embodied in an instrument bearing a certified date.

This means that diligence in ensuring the prompt and verifiable delivery of the certified-date notice to the obligor is as important as obtaining the certified date itself. For example, if Assignee A obtains a certified date on their notice on Day 1, and it reaches the obligor on Day 5, while Assignee B obtains a certified date on Day 2, but their notice reaches the obligor on Day 4, Assignee B will have priority over Assignee A.

The rationale for the certified date requirement is to prevent fraudulent backdating of notices or consents and to establish a clear, objective, and verifiable timeline for determining priority among competing claimants.

B. Scenarios and Nuances under the Certified Date Rule

1. One Assignment Perfected with Certified Date, Another Without:
   If one assignee (Assignee 1) perfects their assignment through a notice to (or consent from) the obligor with a certified date, while another assignee (Assignee 2) holds an assignment of the same claim that was either not notified to the obligor at all, or was notified/consented to but without a certified date, Assignee 1 will unequivocally have priority. This holds true even if Assignee 2's assignment agreement was entered into at an earlier date. The lack of a certified date on Assignee 2's notification or consent renders their assignment ineffective against third parties like Assignee 1. This principle can be seen in early case law, such as the Daishin'in (Great Court of Cassation) judgment of March 28, 1919 (Taishō 8) (Case 148 from a typical collection), which dealt with a situation where one assignment was made with a certified date while another was not, leading to the former prevailing.
2. Simultaneous Arrival of Notices with Certified Dates:
   A more complex situation arises if notices of assignment to different assignees, both bearing valid (though not necessarily identical) certified dates, arrive at the obligor at the exact same time, or if the order of their arrival cannot be determined.
   • No Sole Priority: The Supreme Court judgment of July 18, 1978 (Shōwa 53) (Case 152) established that in such cases of simultaneous arrival, neither assignee can assert that they are the sole priority assignee over the other(s) in the same simultaneous-arrival group.
   • Obligor's Options: From the obligor's perspective, when faced with multiple perfected assignees of apparently equal rank due to simultaneous notification, the situation is precarious. The Supreme Court judgment of January 11, 1980 (Shōwa 55) (Case 155) provided some clarity, suggesting that each assignee in such a scenario can independently demand full payment from the obligor. The obligor generally cannot refuse payment to one assignee merely because another assignee with simultaneous perfection exists. However, if the obligor is genuinely uncertain as to whom payment should be made, they may have the option to make a statutory deposit (供託 - kyōtaku) of the debt amount with an official depository, thereby discharging their obligation.
   • Implications for Assignees: For the assignees whose notices arrived simultaneously, this means they may not be able to recover the full amount of the claim if the obligor has validly paid another assignee in the same group or if the claim amount is insufficient to satisfy all. They might effectively be considered to hold pro-rata rights or might need to come to an arrangement amongst themselves. A Sapporo High Court judgment of December 14, 1956 (Shōwa 31) (Case 150), although preceding some of the key Supreme Court rulings and focusing on a situation where neither of two assignments had a certified date, touched upon the obligor's ability to refuse payment to any assignee if the priority was unclear between them (though this specific outcome for non-certified assignments is superseded by the clear requirement of a certified date for third-party perfection).
3. Uncertainty in Arrival Times of Competing Notices:
   If a certified-date assignment notice and, for example, a notice of seizure (which also requires service on the obligor/third debtor to be effective) both reach the obligor, but their precise order of arrival is unclear, courts may treat them as having arrived simultaneously. In such a scenario, if the obligor makes a statutory deposit due to the uncertainty, the Supreme Court judgment of March 30, 1993 (Heisei 5) (Case 161) held that if the total claims of the assignee and the seizing creditor exceed the deposited sum, they should share the deposited funds pro-rata according to their respective claim amounts, based on principles of fairness.

III. Priority under the Act on Special Rules for Claim Assignments (債権譲渡特例法 - Saiken Jōto Tokureihō)

Recognizing the limitations of the traditional Civil Code method for certain types of transactions (especially bulk assignments by corporations or assignments of future claims), Japan enacted the Act on Special Rules for Claim Assignments. This Act established a public registration system for claim assignments where the assignor is a corporation.

A. Perfection and Priority through Registration

1. The Claim Assignment Register (債権譲渡登記 - saiken jōto tōki):
   This system allows for the electronic registration of claim assignments. Registration provides an alternative means of perfecting the assignment against third parties.
2. Priority Based on Registration Order:
   If two assignments of the same claim are both perfected by registration under this Act, priority between them is generally determined by the chronological order of their registration. The first to register will have the superior claim against subsequently registered assignees.

B. Interaction Between the Registration System and the Civil Code (Certified Date) System

A critical question is how priority is determined when one assignment is perfected by registration under the Special Act, and another assignment of the same claim is perfected using the Civil Code's certified date method.

The general principle remains that the first to achieve a legally recognized form of perfection against third parties will have priority.

• If Assignee 1 perfects by registration on Day X, and Assignee 2 perfects by a certified-date notice that arrives at the obligor on Day Y:
  • If Day X is earlier than Day Y, Assignee 1 (via registration) generally has priority.
  • If Day Y is earlier than Day X, Assignee 2 (via certified date) generally has priority.

It is important to remember that registration under the Special Act perfects the assignment against third parties generally, but not directly against the obligor of the claim. To assert the assignment against the obligor (e.g., to redirect payment), the assignee must still typically provide the obligor with notice of the assignment along with a certificate of registered matters (登記事項証明書 - tōki jikō shōmeisho) from the claim assignment register, or obtain the obligor's consent (Article 4 of the Act). However, for determining priority against another assignee (a third party), the date of registration is the key factor when this perfection method is used.

The Supreme Court judgment of November 22, 2001 (Heisei 13) (Case 171) addressed methods of identifying assigned claims within a collective claim assignment security agreement for third-party perfection, underscoring the importance of clarity in what is being registered or notified for such perfection to be effective under the Special Act.

IV. Key Factors Determining "Who Wins" in a Double Assignment

In summary, the "winner" in a double assignment scenario in Japan is determined by a hierarchy of rules focusing on timely and proper perfection against third parties:

1. Valid Underlying Assignment: Both assignees must, first and foremost, have a valid assignment agreement with the assignor for the specific claim in question. If one of the assignments is invalid for reasons such as lack of capacity, fraud in the inducement affecting the assignor's intent to assign, or insufficient specificity of the claim itself, that assignment cannot confer rights, regardless of perfection attempts.
   • For example, if an assignment agreement is deemed ineffective because it refers to an "unlimited" scope of future claims without adequate means of identification (as suggested by principles in Tokyo High Court, July 15, 1982 (Case 17) or Tokyo District Court, October 22, 1985 (Case 19)), then subsequent perfection acts may be futile.
2. Method and Timing of Perfection Against Third Parties:
   • Civil Code Method (Article 467, Para. 2): The assignee whose certified-date notice first arrives at the obligor, or who first obtains the obligor's consent bearing a certified date, wins.
   • Special Act Registration Method: The assignee who first registers the assignment wins against other registered assignees or those who subsequently perfect via the Civil Code.
   • Cross-Method Competition: The first to achieve either recognized form of third-party perfection (arrival of certified-date notice/consent OR registration) wins.
3. The Role of "Knowledge" or "Bad Faith":
   Unlike some common law jurisdictions where an assignee's knowledge of a prior unperfected assignment might impact their priority under equitable principles, Japanese law, particularly Article 467, operates on a more objective "race to perfect" basis. If Assignee 2 properly perfects their assignment (e.g., via a certified-date notice that arrives first, or by first registration) without any defect in their own assignment or perfection, their priority is generally secure even if they were aware that the assignor had previously entered into an unperfected assignment agreement with Assignee 1. The system prioritizes the party who takes the legally prescribed steps to publicize or certify their claim.

V. The Obligor's Position and Protection

The obligor caught between two (or more) assignees claiming the same debt faces a difficult situation. Japanese law offers certain protections:

• Payment to the Apparently Prior Perfected Assignee: If one assignee has clearly perfected their claim (e.g., the obligor has received a valid certified-date notice from Assignor to Assignee 1, and later receives a notice from Assignor to Assignee 2), the obligor is generally safe in paying Assignee 1.
• Statutory Deposit (供託 - kyōtaku): If the obligor receives conflicting notices of assignment that appear to be equally perfected (e.g., simultaneous arrival of certified-date notices, or valid registration by one and a valid certified-date notice by another with unclear priority), or if they are otherwise genuinely unable to determine the rightful creditor, they can discharge their obligation by depositing the amount due with an official depository (a Legal Affairs Bureau). This protects the obligor from the risk of double payment. The competing assignees must then resolve their entitlement to the deposited funds among themselves, often through court proceedings if they cannot agree. The Great Court of Cassation judgment of June 28, 1932 (Shōwa 7) (Case 149) touched upon the principle that if an assignment is not properly perfected against third parties (e.g., a seizing creditor), the obligor is bound to pay the party with the superior right (in that case, the seizing creditor over an assignee without a certified-date perfection). While not a direct double assignment case between two assignees, it underscores the obligor's duty to pay the party who can validly assert the claim.

VI. Risks for Assignees and Mitigation Strategies

Double assignments pose significant risks for assignees.

• Risk of Prior Perfected Interest: An assignee might acquire a claim only to later discover that a prior assignee had already perfected their rights.
• Due Diligence Challenges:
  • For assignments perfected under the Civil Code (certified date), there is no central public registry to search. Diligence involves inquiring with the assignor and, if possible (though often impractical or sensitive before the assignment), the obligor.
  • The Claim Assignment Register under the Special Act can be searched, offering more transparency for assignments registered there. This is a key advantage of using or checking this registry.
• Mitigation Strategies:
  • Prompt Perfection: Act swiftly to perfect the assignment using the appropriate method.
  • Use of the Registration System: For corporate assignments, especially for future or bulk claims, utilizing the registration system can provide greater certainty and public notice.
  • Contractual Protections: Obtain warranties and representations from the assignor that the claim has not been previously assigned and is free from competing interests. Include indemnification clauses for breach of these warranties.
  • Direct Communication with Obligor (where feasible): In some cases, obtaining the obligor's direct consent (with a certified date) can provide strong protection, as it also serves as acknowledgment.
  • Legal Counsel: Seek advice from legal professionals familiar with Japanese claim assignment law to ensure compliance and mitigate risks.

VII. Conclusion: First to Validly Perfect Prevails

In the event of a double assignment of claims under Japanese law, the fundamental rule is that the assignee who first achieves valid perfection against third parties will have the superior right to the claim. This perfection is achieved either through a notice to (or consent from) the obligor by an instrument bearing a certified date (with priority determined by the arrival of such notice or the date of such consent) or by registration under the Act on Special Rules for Claim Assignments (with priority determined by the time of registration). Navigating these rules requires careful attention to procedural details and timing. For businesses involved in acquiring claims in Japan, understanding and diligently applying these perfection mechanisms is not just a legal formality but a critical component of safeguarding their investment and ensuring the enforceability of their rights.