Enforcing Judgments in Japan: A Guide to Civil Execution Procedures for Businesses

Obtaining a favorable judgment in a Japanese civil lawsuit is a significant achievement. However, the legal battle doesn't always end there. If the losing party (the debtor) fails to voluntarily comply with the court's order—such as paying a monetary award or vacating a property—the prevailing party (the creditor) must turn to Japan's civil execution procedures (Minji Shikkō - 民事執行) to transform that paper victory into a tangible reality.

Navigating these enforcement mechanisms requires a clear understanding of Japanese law, meticulous preparation, and often, strategic asset investigation. This article provides a guide for businesses on the essentials of civil execution in Japan, covering the prerequisites, key methods for enforcing monetary and certain non-monetary claims, and important practical considerations.

Core Principles and Prerequisites for Civil Execution in Japan

The framework for enforcing judgments and other enforceable instruments is primarily set out in the Civil Execution Act (民事執行法 - Minji Shikkō Hō) and the Rules of Civil Execution (民事執行規則 - Minji Shikkō Kisoku).

1. The Need for a "Title of Execution" (Saimu Meigi - 債務名義):
   Compulsory execution (kyōsei shikkō - 強制執行) cannot be initiated without a valid "title of execution." This is an official document that publicly attests to the existence, content, and scope of the creditor's enforceable claim against the debtor. Common examples relevant to businesses (as listed in Article 22 of the Civil Execution Act) include:
   • A final and binding judgment from a Japanese court.
   • A judgment with a declaration of provisional execution (kari-shikkō sengen - 仮執行宣言), allowing enforcement even if an appeal is pending.
   • A settlement reached in court and recorded in the court record (soshōjō no wakai - 訴訟上の和解 or chōtei chōsho - 調停調書 in mediation), which has the same effect as a final judgment.
   • A payment demand (shiharai tokusoku - 支払督促) with a declaration of provisional execution, obtained through a summary court procedure.
   • A notarized deed (kōsei shōsho - 公正証書) prepared by a Japanese notary, specifically including a clause stating the debtor's agreement to immediate compulsory execution upon default (an "execution clause"). This is often used for loan agreements or settlement agreements made out of court.
2. The "Writ of Execution" (Shikkō-bun - 執行文):
   For most types of titles of execution (with some exceptions, like judgments from Small Claims Court or payment demands with provisional execution), a "writ of execution" must be obtained before enforcement can begin (CEA Art. 25).
   • Purpose: The writ is an official authentication, usually issued by the court clerk of the court that rendered the judgment (or the notary who prepared the notarized deed), and is typically appended to the original title of execution. It certifies that the title is currently valid and enforceable by the named creditor against the named debtor (CEA Art. 26).
   • Obtaining the Writ: The creditor must apply to the court clerk or notary. The application usually requires:
     • The original title of execution.
     • If the title needs to be final and binding (e.g., a judgment without provisional execution), a Certificate of Final and Binding Judgment (kakutei shōmei-sho - 確定証明書).
     • If enforcement is conditional upon certain facts (e.g., arrival of a due date not specified in the judgment, or succession of rights/obligations), documents proving those facts must be submitted to obtain a "conditional writ" (jōken jōju shikkō-bun - 条件成就執行文) or a "successor writ" (shōkei shikkō-bun - 承継執行文) (CEA Art. 27).
     • A small fee (paid via revenue stamps) is required.
3. Service of the Title of Execution and Writ on the Debtor (CEA Art. 29):
   As a general rule, the title of execution (or a certified copy) and the writ of execution (if required, along with any documents submitted to obtain a conditional or successor writ) must be formally served on the debtor before or simultaneously with the commencement of execution proceedings.
   • Purpose: This ensures the debtor is officially notified of the basis for the impending enforcement and has a final opportunity to comply voluntarily or raise any legitimate objections to the execution itself.
   • Simultaneous Service: Permitted in certain types of execution (e.g., seizure of movables by a court execution officer) to prevent the debtor from hiding assets between notification and seizure.
   • Proof of Service (Sōtatsu Shōmei-sho - 送達証明書): For most execution applications, the creditor must submit proof that these documents have been duly served on the debtor.

Critical Preliminary Step: Asset Investigation (Zaisan Chōsa - 財産調査)

Effective execution hinges on identifying seizable assets belonging to the debtor. If the debtor does not voluntarily disclose their assets, the creditor must undertake an investigation.

1. Why Asset Investigation is Essential:
   Execution proceedings are targeted at specific assets. Without knowing what assets the debtor possesses and where they are located, enforcement attempts can be futile and costly. This is true whether the debtor is actively concealing assets or genuinely lacks the means to pay.
2. Methods of Asset Investigation in Japan:
   • Informal Inquiries and Public Record Searches: Basic searches of publicly available information (e.g., real estate registries, corporate registries if the debtor is a company) can sometimes yield results.
   • Attorney Inquiry System (Bengoshikai Shōkai - 弁護士会照会): As discussed in previous articles, an attorney, through their bar association, can make inquiries to various entities (Attorney Act, Art. 23-2). Post-judgment, this is particularly useful for:
     • Financial Institutions: Requesting information about the debtor's bank accounts (existence, branch, and sometimes balance). Many major Japanese banks now cooperate with "all-branch inquiries" for judgment enforcement purposes, though specific conditions and bar association agreements may apply.
     • Employers: To ascertain salary details for wage garnishment.
     • Life Insurance Companies: To identify policies with surrender value (though inquiries now often need to be made to individual insurers rather than a central association, increasing costs).
       These inquiries require a valid title of execution and are made by the creditor's attorney.
   • Property Disclosure Procedure (Zaisan Kaiji Tetsuzuki - 財産開示手続) (CEA Art. 196 et seq.):
     This is a formal court procedure where a judgment creditor can apply to the court to order a debtor to appear in court and disclose their assets under oath.
     • Utility: Can be a relatively low-cost method to obtain a broad overview of the debtor's assets.
     • Limitations: Debtors may fail to appear, refuse to testify, or provide incomplete or false information. While there are minor penalties (a non-penal fine - karyō - 過料) for non-compliance, its effectiveness can be limited if the debtor is determined to obstruct. Consequently, its usage in Japan has historically not been as widespread as one might expect, though recent legal reforms aim to enhance its efficacy.
   • Third-Party Information Disclosure Procedures (Newer Mechanisms): Recent amendments to the Civil Execution Act have introduced more potent mechanisms for creditors to obtain asset information from third parties (like financial institutions and public bodies registering assets) through court orders, aiming to improve the effectiveness of asset discovery. These procedures are becoming increasingly important.
   • Private Investigation Services (Chōsa-gaisha / Kōshinjo - 調査会社・興信所): Engaging private investigators or credit bureaus can sometimes yield information, especially if assets are suspected to be concealed.
     • Pros: Can be covert and potentially quick if pre-arranged before judgment.
     • Cons: Can be expensive, the reliability of information varies, and there's always the risk that no significant assets will be found, leading to wasted expenditure. Using reputable firms, perhaps those partnered with local bar associations, is advisable.

Enforcing Monetary Claims (Kinsen Saiken no Kyōsei Shikkō): Common Methods

Once a monetary judgment is obtained and assets are identified, several execution methods are available:

A. Execution Against the Debtor's Claims (Receivables) (Saiken Sashiosae - 債権差押え):
This involves seizing monetary claims that the debtor holds against third parties (garnishees). It's a very common and often effective method.

• Common Targets:
  • Bank deposits (yokin) held with financial institutions.
  • Salary or wages (kyūyo) payable by an employer.
  • Rent payable by tenants of the debtor's property.
  • Trade receivables owed to the debtor by its customers.
  • Surrender value of life insurance policies.
• Procedure:
  1. Application for Attachment Order: The creditor files an application for an Attachment Order (sashiosae meirei - 差押命令) with the competent District Court, typically the court of the debtor's general venue or where the claim to be attached is located (CEA Art. 144). The application must precisely identify the parties, the underlying judgment (title of execution), the monetary claim being enforced, and the specific claim to be attached (e.g., "the deposit claim held by the Debtor against XX Bank, YY Branch, account number ZZZ"). If multiple bank accounts are targeted, the attachment amount must generally be allocated among them; a blanket order attaching "all accounts up to the judgment amount" is usually not permitted (see Supreme Court, September 20, 2011; Supreme Court, January 17, 2013).
  2. Issuance and Service of Attachment Order (CEA Art. 145): If the application is in order, the court issues the Attachment Order. This order is served on both the debtor and the third-party debtor (garnishee). The attachment becomes legally effective upon service on the garnishee.
  3. Effect of Attachment: The garnishee is prohibited from making payment on the attached claim to the debtor. The debtor is prohibited from collecting or otherwise disposing of the attached claim.
  4. Third-Party Garnishee Statement (Chinjutsu Saikoku - CEA Art. 147): Upon the creditor's request, the court clerk will also order the garnishee to submit a written statement within two weeks, declaring whether the attached claim exists, its amount, and whether there are any prior attachments or other competing claims.
  5. Collection by Creditor (Toritate - CEA Art. 155): Generally, one week after the Attachment Order is served on the debtor, the creditor gains the right to directly collect the attached claim from the garnishee, up to the amount of their judgment debt. If the garnishee fails to pay voluntarily, the creditor can file a separate "collection lawsuit" (toritate soshō - 取立訴訟) against the garnishee to compel payment (CEA Art. 157).
  6. Assignment Order (Tenpu Meirei - 転付命令) (CEA Art. 159): As an alternative to direct collection, particularly useful for bank deposits, the creditor can apply for an Assignment Order. If granted, and if there are no competing attachments by the time it's served on the garnishee, the attached claim is legally transferred to the creditor. The creditor's original claim against the debtor is then deemed satisfied up to the face value of the assigned claim (CEA Art. 160). This gives the creditor priority but also transfers the risk of the garnishee's insolvency to the creditor.
• Practical Considerations for Claims Execution:
  • Bank Accounts: Precise identification of the branch holding the account is traditionally required, though all-branch attorney inquiries post-judgment have improved identification.
  • Life Insurance: The Supreme Court (September 9, 1999) has affirmed that a creditor who has attached the surrender value of a life insurance policy can exercise the debtor's right to surrender the policy to realize the funds.
  • Non-Attachable Portions of Claims (Sashiosae Kinshi Saiken - 差押禁止債権): A significant portion of salary (typically three-quarters, subject to certain monetary thresholds – see Civil Execution Order Art. 2) is exempt from attachment to protect the debtor's livelihood. Certain pension rights, welfare benefits, and unemployment benefits are also protected by specific statutes. The court can, upon application, modify the scope of this non-attachable range based on the circumstances of the debtor and creditor (CEA Art. 153). The impact of wage garnishment on a debtor's employment should also be considered.

B. Execution Against Real Property (Fudōsan Kyōsei Keibai - 不動産強制競売):
This involves the court-ordered public auction of the debtor's land or buildings.

• Procedure Outline:
  1. Application: Filed with the District Court where the property is located (CEA Art. 44). This requires a substantial upfront court deposit (yonōkin - 予納金), the amount of which varies with the property's assessed value (e.g., JPY 600,000 for properties valued under JPY 20 million in Tokyo, with higher amounts for more valuable properties). Registration license tax and other administrative costs also apply.
  2. Auction Commencement Order (Keibai Kaishi Kettei) and Attachment Registration (Sashiosae Tōki): The court issues an order to commence the auction (CEA Art. 45), which is served on the debtor and triggers the registration of the attachment in the real property registry. This restricts the debtor's ability to dispose of the property (CEA Art. 46).
  3. Creditor Notification and Claim Period: The court publicly announces the auction and sets a deadline (haitō yōkyū shūki - 配当要求終期) for other creditors with rights against the property (e.g., mortgagees, other judgment creditors) to file their claims for a share of the proceeds (CEA Art. 49).
  4. Property Investigation and Valuation: A court execution officer conducts a site investigation (genkyō chōsa - 現況調査, CEA Art. 57), and a court-appointed appraiser (hyōka-nin - 評価人, usually a real estate appraiser) assesses the property's value (CEA Art. 58). Based on these, the court sets a minimum sale price (baikyaku kijun kakaku - 売却基準価額) (CEA Art. 60).
  5. Public Auction and Sale: The property is typically sold through a public auction process (often sealed bids over a period - kikan nyūsatsu - 期間入札). The highest bidder at or above the minimum bid price (kaiuke kanō kagaku - 買受可能価額, which is 80% of the minimum sale price) is usually granted a sale permission order (baikyaku kyoka kettei - 売却許可決定).
  6. Payment and Ownership Transfer: The successful bidder pays the purchase price by a court-set deadline and thereby acquires ownership (CEA Art. 79).
  7. Distribution of Proceeds (Haitō - 配当): The court distributes the sale proceeds among the executing creditor and any other entitled creditors according to their legal priorities (CEA Art. 84).
• Practical Considerations: This process can be lengthy and expensive due to the large court deposit and administrative steps. A critical concern is whether there will be any surplus proceeds for the executing creditor after satisfying prior secured creditors (e.g., mortgage holders) and execution costs. Thorough pre-application due diligence on the property's title, encumbrances, and market value is essential to avoid a "no-surplus auction" (mujōyo keibai - 無剰余競売), which can result in the cancellation of the proceedings at the creditor's expense (CEA Art. 63).

C. Execution Against Movable Property (Dōsan Kyōsei Shikkō - 動産強制執行):
This involves the seizure and sale of the debtor's tangible personal property (e.g., goods, inventory, equipment, vehicles, jewelry, cash above an exempt amount).

• Procedure:
  1. Application: Filed directly with a court execution officer (shikkōkan - 執行官) of the District Court in the area where the movables are located.
  2. Seizure (Sashiosae): The execution officer visits the debtor's premises (business or residence) and seizes items deemed to have saleable value, up to the amount of the judgment debt (CEA Arts. 122-124). The officer has discretion in selecting items.
  3. Sale (Kanka -換価): Seized items are typically sold by public auction conducted by the execution officer (CEA Art. 134), often on-site or to specialized dealers.
  4. Distribution: The execution officer distributes the proceeds.
• Practical Considerations: The recovery value from movables is often low unless specific high-value items are known. Many household goods and a certain amount of cash (e.g., JPY 660,000 under the Civil Execution Order Art. 1) are exempt from seizure (CEA Art. 131). For individual debtors, there may be few non-exempt assets of significant value. This method is sometimes used more for its psychological pressure than for substantial monetary recovery. The creditor's attorney may attend the seizure with the debtor's consent, but the execution officer controls the process.

Enforcing Non-Monetary Judgments: Focus on Building Eviction

While this article primarily addresses monetary claims, a common non-monetary judgment businesses might seek to enforce is an order for the eviction of a tenant or occupant from a commercial property.

• Execution for Delivery/Vacating of Real Property (Tatemono Akewatashi no Kyōsei Shikkō - 建物明渡しの強制執行) (CEA Art. 168 et seq.):
  • Objective: To remove the debtor (e.g., a defaulting tenant) from possession of the specified real property and restore possession to the creditor (e.g., the landlord).
  • Procedure:
    1. Application to Execution Officer.
    2. Notice of Demand for Vacating (Akewatashi no Saikoku - CEA Art. 168-2): The execution officer visits the property, formally notifies the occupants of a deadline by which they must vacate (typically one month or more), and posts official notices. The creditor or their attorney often attends this initial visit to assess the situation (e.g., number of occupants, volume of belongings) and potentially negotiate a voluntary departure.
    3. Forced Eviction (Shikkō): If the occupants do not vacate by the deadline, the execution officer returns with a team (which may include locksmiths and movers) to forcibly remove the occupants and their belongings. The creditor or their agent must be present to retake possession (CEA Art. 168(3)).
  • Practical Considerations:
    • Identifying All Occupants: The eviction order is generally only effective against those named or covered by its terms. Identifying all actual occupants during the saikoku visit is important.
    • Debtor's Belongings: The creditor is typically responsible for the removal and temporary storage of any belongings left behind by the debtor. This can incur significant costs. Efforts are often made to have the debtor either remove all items or formally waive ownership of abandoned items to allow for their disposal.
    • Handling Difficult or Obstructive Occupants: In cases of anticipated resistance, the execution officer may coordinate with local police for security during the eviction.

Responding to Debtor's Obstruction of Execution

Debtors may sometimes attempt to unlawfully obstruct execution proceedings, particularly concerning real property (e.g., by damaging the property or allowing unauthorized occupants to interfere with a sale). The Civil Execution Act provides for certain protective measures, such as court orders to prevent acts that diminish property value (CEA Art. 55) or, in specific leasehold situations, allowing a creditor to pay overdue land rent on the debtor's behalf to prevent the termination of a valuable leasehold interest subject to execution (CEA Art. 56).

Conclusion: Transforming Judgment into Tangible Recovery

The civil execution procedures in Japan provide the essential legal mechanisms for businesses to enforce their hard-won judgments when debtors fail to comply voluntarily. Whether pursuing monetary claims against bank accounts, real estate, or movables, or seeking non-monetary remedies like property eviction, the process is rule-bound and can be complex. Success in execution often depends on diligent pre-judgment (or post-judgment) asset investigation, meticulous preparation of execution applications, and a clear understanding of the specific procedures for different types of assets. Close collaboration with experienced Japanese legal counsel is indispensable for navigating these critical post-judgment steps effectively and maximizing the chances of transforming a favorable judgment into a tangible recovery.