Engaging in international business inevitably carries the risk of disputes. When these disputes lead to litigation in Japan, US companies and their legal teams will encounter a civil procedure system that, while aiming for fairness and justice, operates with distinct characteristics compared to the US common law tradition. Understanding the fundamentals of Japanese civil procedure is crucial for effectively managing legal risks, making informed strategic decisions, and navigating the path to resolution.

The Japanese Court System: A Snapshot

Japan's judicial system for civil matters is primarily structured as follows:

• Summary Courts (簡易裁判所 - Kan'i Saibansho): Handle claims not exceeding JPY 1.4 million and certain types of routine disputes. Procedures are generally simpler.
• District Courts (地方裁判所 - Chihō Saibansho): The courts of first instance for most civil cases, including complex commercial litigation, intellectual property disputes (though some are exclusive to Tokyo or Osaka District Courts), and claims exceeding the Summary Court's monetary limit. Most cases relevant to international businesses will start here.
• High Courts (高等裁判所 - Kōtō Saibansho): Primarily appellate courts that review decisions from District Courts, Family Courts, and Summary Courts. There are eight High Courts located throughout Japan. The Intellectual Property High Court (知的財産高等裁判所 - Chiteki Zaisan Kōtō Saibansho), a specialized branch of the Tokyo High Court, handles appeals in IP cases.
• Supreme Court (最高裁判所 - Saikō Saibansho): The highest court in Japan. Appeals to the Supreme Court are generally limited to cases involving constitutional issues or significant errors in the interpretation of law.

Notably, Japan does not use a jury system for civil trials; all cases are decided by professional judges.

Initiating a Lawsuit in Japan: The First Steps

1. Jurisdiction (管轄権 - Kankatsuken):
   Before filing, or if sued, jurisdiction is a threshold question. Japanese courts can exercise jurisdiction over international commercial disputes based on various factors, including the defendant's domicile or principal office in Japan, the place of performance of an obligation, the place where a tort was committed, or an agreement between the parties on jurisdiction (though such agreements have limitations, especially in consumer or employment contracts).
2. Filing the Complaint (訴状 - Sojō):
   A civil action commences with the plaintiff filing a written complaint with the appropriate court. The complaint must state:
   • The parties involved.
   • The relief sought (請求の趣旨 - seikyū no shushi – e.g., a monetary amount, specific performance).
   • The factual and legal grounds for the claim (請求の原因 - seikyū no gen'in).
     Sufficient copies for the court and each defendant must be submitted. Filing fees, calculated based on the amount in dispute, are also payable at this time.
3. Service of Process (送達 - Sōtatsu):
   This is a critical step ensuring the defendant is properly notified of the lawsuit.
   • Domestic Service: Within Japan, service is typically carried out by court clerks, often utilizing special mail delivery by Japan Post. The complaint and a summons (呼出状 - yobidashijō) specifying the date of the first oral hearing are served on the defendant. Proper service is fundamental to the validity of the subsequent proceedings. If the defendant is a corporation, service is usually made at its registered head office.
   • International Service: If a US company is suing a Japanese entity, service will be domestic. If a Japanese party is suing a US entity in Japan (assuming Japanese jurisdiction), service on the US entity will typically be effected through the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, if applicable, or via diplomatic channels. This can be a time-consuming process.

Early Stages: The First Oral Argument Date and Initial Responses

Once the complaint is filed and deemed formally correct by the court, a date for the first oral argument hearing (第1回口頭弁論期日 - dai-ikkai kōtō benron kijitsu) is scheduled by the presiding judge.

1. Defendant's Initial Response:
   Upon receiving the complaint and summons, the defendant must decide how to respond. The primary initial responsive pleading is the answer (答弁書 - tōbensho). In the answer, the defendant will admit or deny the plaintiff's factual allegations and state its own defenses. The defendant may also assert counterclaims.
   It is common for defendants to request an extension for filing a detailed answer, especially in complex cases or if served shortly before the first hearing date.
2. The First Oral Argument Hearing:
   This initial hearing in open court often serves more as a procedural milestone than a substantive debate, especially if the defendant has not yet filed a detailed answer.
   • Purpose: Parties (or their counsel) appear before the judge(s). The plaintiff formally "states" the complaint (often by reference if already submitted), and the defendant, if present and having filed an answer, will state their answer. The court confirms appearances and the basic posture of the case.
   • Case "Sorting": A key function of this hearing, and the early phase in general, is for the court to get an initial grasp of the dispute and begin to "sort" or plan the subsequent process. The judge may ask clarifying questions and will typically schedule the next steps. This might involve setting dates for further written submissions, scheduling "preparatory proceedings" (see below) to clarify issues and evidence, or, if the case appears amenable, suggesting the possibility of settlement discussions.
   • Defendant's Non-Appearance or Default: If the defendant has been properly served but fails to file an answer and does not appear at the first hearing, the facts alleged in the plaintiff's complaint may be deemed admitted (擬制自白 - gisei jihaku, or constructive admission) under Article 159 of the Code of Civil Procedure. This can lead to a default judgment in favor of the plaintiff, provided the plaintiff's claim is legally sound based on the alleged facts. However, this rule does not apply if service was made by publication (公示送達 - kōji sōtatsu).

Streamlining the Process: Preparatory Proceedings

After the initial hearings, many commercial cases, particularly complex ones, will transition into preparatory proceedings (弁論準備手続 - benron junbi tetsuzuki). These are crucial for efficiently managing the litigation:

• Focus: These proceedings aim to clarify and narrow down the disputed issues of fact and law, organize the evidence each party intends to submit, and create a plan for any necessary witness examinations.
• Format: They are typically conducted in a less formal setting than open court hearings, often in a conference room with only the judge(s) and the parties' legal counsel. This allows for more focused and interactive discussions.
• Outcome: The result of preparatory proceedings is usually a summary of disputed points and an agreed-upon schedule for subsequent stages, such as witness testimony. This phase is critical for shaping the remainder of the litigation.

Evidence in Japanese Civil Litigation

The Japanese approach to evidence has some key differences from US practice:

1. Emphasis on Documentary Evidence: Written documents are highly valued and often form the core of evidence in commercial disputes. Parties submit documents they intend to rely on, with explanations of their relevance.
2. Limited Disclosure/Discovery: There is no broad, US-style pre-trial discovery involving extensive depositions, interrogatories, or requests for production of vast quantities of documents as a matter of course. While a party can petition the court to order the opposing party or a third party to produce specific, identified documents, the scope is generally much narrower than in the US. The "fishing expedition" approach to discovery is not permitted.
3. Witness Examination (証人尋問 - shōnin jinmon; 当事者尋問 - tōjisha jinmon):
   • Witnesses (including representatives of corporate parties) are examined in open court during oral argument hearings.
   • The examination is typically led by the lawyers for each side (direct, cross-examination, re-direct).
   • Judges play an active role, often asking their own questions to clarify testimony or probe issues they deem important.
   • Written witness statements are often submitted in advance and form the basis of the oral examination.
4. Expert Witnesses (鑑定 - kantei): Experts can be appointed by the court or proposed by the parties to provide opinions on specialized issues.

Oral Argument Hearings (Beyond the First)

Subsequent oral argument hearings are held to present arguments based on the written briefs exchanged by the parties, to formally submit evidence, and, most importantly, to conduct witness examinations. While called "oral arguments," a significant portion of the legal argument is contained in the detailed written submissions (準備書面 - junbi shomen) filed beforehand. The hearings provide an opportunity to emphasize key points and for judges to question counsel.

The Active Role of the Judge

Japanese judges generally take a more active, or "inquisitorial," role in managing civil proceedings than their counterparts in purely adversarial systems. They:

• Actively direct the course of proceedings.
• Ask clarifying questions of parties and witnesses.
• Identify and narrow down disputed issues.
• Play a very significant role in encouraging and facilitating settlement.

Settlement (和解 - Wakai): A Cornerstone of Japanese Dispute Resolution

There is a strong cultural and systemic emphasis on resolving disputes amicably through settlement in Japan.

• Judicial Encouragement: Judges actively encourage settlement at virtually all stages of the litigation process, from early hearings through to the period after evidence has been presented.
• Settlement Conferences: The court may hold specific settlement conferences, sometimes with judges offering their views on the likely outcome of the case to facilitate agreement.
• Judicial Settlement (裁判上の和解 - saibanjō no wakai): If a settlement is reached in court, it is recorded in the court record and has the same binding effect as a final and conclusive judgment. This is a very common method of concluding civil cases.
• Many businesses, both Japanese and foreign, find settlement to be a more efficient and predictable way to resolve disputes than proceeding to a full trial and judgment.

Judgment (判決 - Hanketsu) and Appeals

If the case does not settle, the court will render a judgment (判決 - hanketsu).

• Written Judgments: Judgments are always in writing and include the court's findings of fact and application of the law.
• Appeals:
  • Kōso (控訴) Appeal: A party dissatisfied with a District Court or Summary Court judgment can typically file a kōso appeal to the relevant High Court. The High Court appeal often involves a de novo review, meaning the court can re-examine both the facts and the law. New evidence may sometimes be introduced, though with some restrictions.
  • Jōkoku (上告) Appeal: An appeal from a High Court judgment to the Supreme Court is called a jōkoku appeal. This is generally limited to cases involving alleged violations of the Constitution or grave errors in the interpretation of law that are of significant public importance. The Supreme Court has discretion in deciding which cases to hear.

Enforcement of Judgments

• Domestic Judgments: A final and conclusive Japanese judgment can be enforced through compulsory execution procedures (e.g., attachment of assets) if the losing party does not voluntarily comply.
• Foreign Judgments: Japan is not a party to the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters. The recognition and enforcement of foreign judgments in Japan are governed by Article 118 of the Code of Civil Procedure. This requires, among other things, that the foreign judgment is final and conclusive, that the foreign court had jurisdiction, that the defendant received proper service or appeared, that the judgment is not contrary to Japanese public policy, and that reciprocity exists (i.e., Japanese judgments would be enforced in the foreign country).

Key Considerations for US Businesses in Japanese Litigation

1. Language and Translation: All official court documents, pleadings, and oral proceedings are conducted in Japanese. This necessitates high-quality, accurate translation of all relevant materials, which can be a significant expense and time factor.
2. Japanese Counsel (弁護士 - Bengoshi): Engaging experienced Japanese legal counsel is absolutely essential. They will not only handle the legal aspects but also navigate the procedural and cultural nuances of the Japanese system.
3. Time and Costs: While potentially less burdensome in terms of discovery costs compared to some complex US litigation, Japanese civil cases can still be lengthy, particularly if they proceed through multiple appeals. Legal fees, translation costs, and other expenses need to be budgeted.
4. Cultural Approach: The emphasis on conciliation and settlement is a key cultural aspect. An overly aggressive or adversarial litigation style that might be common in the US can sometimes be counterproductive in Japan.
5. Evidence Strategy: Given the limited discovery, parties must be prepared to build their case primarily from evidence within their own possession or obtainable through specific court orders for document production. This requires a different strategic approach to evidence gathering compared to the US.

Alternative Dispute Resolution (ADR)

Besides litigation, ADR mechanisms are available and often preferred for commercial disputes in Japan:

• Arbitration (仲裁 - chūsai): Japan has a modern Arbitration Act based on the UNCITRAL Model Law. The Japan Commercial Arbitration Association (JCAA) is a well-respected arbitral institution. Arbitration awards are enforceable.
• Mediation (調停 - chōtei): Court-annexed mediation and private mediation services are also available and can be effective.

Conclusion

While the ultimate goal of achieving a just outcome is shared, the path of civil litigation in Japan involves procedural rules, judicial roles, and cultural emphases that differ from those in the United States. For US businesses, understanding these differences – from the initial service of a complaint and the conduct of the first oral hearing, through the evidence-gathering process, to the strong focus on settlement – is critical. Being well-prepared, well-advised by local counsel, and culturally aware will significantly enhance a company's ability to effectively protect its interests when faced with or initiating legal proceedings in Japan.