How Final is a Japanese Judgment? The Objective Scope of Res Judicata and the (Non-)Existence of Issue Preclusion (Sōtenkō)

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

In any legal system, the principle of finality of judgments is paramount. It ensures that once a dispute has been adjudicated, the parties can rely on the outcome, and the same issues are not endlessly re-litigated. In Japan, this concept is embodied in the doctrine of kihanryoku (既判力), or res judicata. However, the scope of what exactly becomes "finally decided" by a Japanese judgment—its objective scope—is defined quite specifically, and the Japanese approach to precluding the re-litigation of specific issues decided in a prior case differs notably from concepts like issue preclusion or collateral estoppel found in common law jurisdictions.

This article explores the objective scope of res judicata under Japanese civil procedure and examines the status of a related, much-discussed concept known as sōtenkō (争点効), which is the closest Japanese academic equivalent to issue preclusion.

Res Judicata (Kihanryoku): The Foundation of Judgment Finality

Res judicata, as established in Article 114(1) of Japan's Code of Civil Procedure (CCP), dictates that a final and binding judgment has a preclusive effect. This means that the parties to the litigation (and their privies) are bound by the judgment in subsequent lawsuits and cannot make assertions contrary to what has been judicially determined. The core rationales for res judicata are to ensure legal stability, promote judicial economy by preventing repetitive litigation, and protect defendants from being vexed multiple times by the same claim.

The Objective Scope of Res Judicata: Focus on the Operative Part

A defining characteristic of Japanese res judicata is its relatively narrow objective scope. Article 114(1) of the CCP stipulates that res judicata attaches only to the judgment rendered in the "operative part" (shubun) of the decision with respect to the "subject matter of litigation" (soshobutsu).

The "operative part" is the formal disposition of the case—the court's ultimate order, such as "The defendant shall pay the plaintiff X yen," or "The plaintiff's claim is dismissed." The "subject matter of litigation" refers to the specific substantive right or legal relationship for which the plaintiff sought judicial relief (e.g., a claim for repayment of a loan, a claim for damages due to breach of contract, or a claim for confirmation of ownership).

Crucially, findings of fact, or determinations of preliminary or incidental legal issues made in the reasoning (riyū) of the judgment, do not, as a general rule, acquire res judicata effect. This means that even if a court makes a detailed finding on a particular factual point (e.g., the specific date a contract was formed, or the specific nature of a party's negligence) in the body of its written judgment, that finding itself is not independently binding in future litigation between the same parties concerning a different soshobutsu.

The rationale for this limitation is multi-faceted:

  • It concentrates the binding effect of the judgment on the core dispute that the parties brought before the court for resolution.
  • It allows parties greater flexibility in subsequent, related disputes, as they are not bound by every incidental finding from a prior case.
  • It prevents an overly broad or surprising preclusive effect from arising from statements in the reasoning, which parties might not have litigated with the same intensity or foresight as the ultimate claim itself.

For example, consider a situation (analogous to one discussed in legal commentaries and illustrative problems) where a plaintiff (X1) sues for confirmation of their sole ownership of a parcel of land and for transfer registration, alleging a direct purchase from a third party (B). The court dismisses X1's claim, finding in its reasoning that it was X1's deceased father (A), not X1, who had actually purchased the land from B. This finding about A's purchase, being part of the court's reasoning for dismissing X1's specific claim of sole ownership via direct purchase, would not possess res judicata. In a subsequent lawsuit concerning the distribution of A's estate (which might involve a different soshobutsu, such as a claim for X1's inherited share of the land), X1 would not be strictly precluded by res judicata from re-arguing facts related to the original acquisition by A, although other principles like good faith might come into play. The Supreme Court of Japan decision of March 14, 1997 (Hanrei Jiho No. 1600, p. 89), touched upon the complexities arising when a judgment dismissing a claim for sole ownership interacts with subsequent claims for a shared interest based on inheritance, highlighting how the precise definition of the soshobutsu in each case is critical.

Exception: The Set-Off Defense (CCP Article 114(2))

There is a significant statutory exception to the rule that only the operative part carries res judicata. Article 114(2) of the CCP provides that if a claim asserted by the defendant as a defense of set-off (sōsai no kōben) is adjudicated upon by the court—that is, its existence or non-existence is determined in the reasoning—that determination acquires res judicata effect. This binding effect applies up to the amount for which the set-off was asserted against the plaintiff's claim. This exception is justified because a set-off, when successfully pleaded, effectively acts as a judgment extinguishing the defendant's cross-claim to the extent of the set-off. Therefore, the finding regarding that cross-claim needs the finality of res judicata.

The Elusive Concept of Sōtenkō (Issue Preclusion)

Given the narrow objective scope of res judicata, Japanese legal scholarship has long grappled with the question of whether findings on specific, crucial issues (sōten) that were fully litigated and decided in a prior action should have some preclusive effect in subsequent litigation between the same parties, even if the soshobutsu of the second action is different. This concept is known as sōtenkō (争点効) and is the closest Japanese analogue to the common law doctrine of issue preclusion or collateral estoppel.

Advocates for recognizing sōtenkō argue that it would:

  • Prevent the inefficient and potentially contradictory re-litigation of issues that have already been thoroughly examined and decided.
  • Promote judicial economy.
  • Enhance consistency in judicial decisions.
  • Address situations where the strict application of Article 114(1) might seem to allow parties to unfairly "take a second bite at the apple" concerning specific, already-decided points.

Proponents have suggested several requirements for sōtenkō to apply, including:

  1. The issue must have been a major point of dispute in the prior action and its resolution must have been essential to the prior judgment.
  2. The parties must have had a full and fair opportunity to litigate the issue in the prior action.
  3. The court in the prior action must have actually and explicitly decided the issue based on a sufficiently reliable deliberation.
  4. The importance of the issue and the incentive to litigate it fully in the prior action must have been comparable to (or greater than) that in the subsequent action.
  5. The party seeking to rely on the preclusive effect must invoke it in the subsequent action.

The Supreme Court's Stance on Sōtenkō

Despite considerable academic support and discussion for decades, the Supreme Court of Japan has consistently declined to formally recognize sōtenkō as a distinct legal doctrine affording preclusive effect to findings in the reasoning of a judgment.

Landmark decisions include:

  • Supreme Court, June 24, 1969 (Hanrei Jiho No. 569, p. 48)
  • Supreme Court, October 4, 1973 (Hanrei Jiho No. 724, p. 33)
  • Supreme Court, July 3, 1981 (Hanrei Jiho No. 1014, p. 69)

In these and other cases, the Court has reiterated the principle that findings in the reasoning of a judgment do not possess res judicata or any "similar effect" – the latter phrase being widely understood as a reference to, and rejection of, sōtenkō.

The Court has not always explicitly detailed its reasons for this consistent rejection, but several factors are often inferred:

  • A desire for strict adherence to the statutory language of CCP Article 114(1), which limits res judicata to the judgment on the soshobutsu in the operative part.
  • Concerns that recognizing sōtenkō could lead to uncertainty about which of the myriad findings in a judgment's reasoning would be deemed preclusive, potentially surprising litigants who might not have focused their full efforts on every subsidiary point.
  • The availability of a procedural device called an "intermediate declaratory judgment" (chūkan kakunin no uttae) under CCP Article 145. This allows a party, during pending litigation, to seek a formal declaratory judgment on a preliminary legal relationship that is in dispute and is critical to resolving the main claim. If such an intermediate judgment is rendered, it becomes part of the operative part and thus acquires res judicata. The existence of this mechanism for elevating key preliminary issues to the level of a binding determination is sometimes argued to reduce the practical need for a separate sōtenkō doctrine.

The Principle of Good Faith (Shingi-soku) as an Alternative Path to Finality

While sōtenkō as a formal preclusion doctrine remains unrecognized, this does not mean that parties are entirely free to re-litigate issues decided in the reasoning of a prior judgment without any constraints. Japanese courts, including the Supreme Court, have increasingly employed the principle of good faith and fair dealing (shingi-soku) as a flexible tool to prevent abusive or unfair litigation practices. This principle is explicitly stated in Article 2 of the CCP ("Parties shall conduct litigation in good faith and in accordance with the principle of equity") and has roots in Article 1(2) of the Civil Code.

In the context of prior judgments, shingi-soku can be invoked to bar a party from making assertions in a subsequent lawsuit that are flagrantly inconsistent with their positions in a prior, related proceeding, or that effectively seek to undermine the substance of a prior resolution in a manner deemed unfair or vexatious. This application of shingi-soku can sometimes achieve results similar to issue preclusion, but it operates not as a rigid rule of preclusion based on the prior judgment's "effect," but as an equitable assessment of the party's conduct in the subsequent litigation in light of the prior proceedings.

When considering whether shingi-soku should bar re-litigation of an issue, courts may examine factors such as:

  • Whether the issue was a central focus of the prior litigation and thoroughly contested.
  • Whether the party had a full and fair opportunity to present their case on that issue previously.
  • Whether the subsequent assertion amounts to a mere "rehashing" (mushikaeshi) of arguments already considered and rejected.
  • Whether allowing the party to re-open the issue would impose an unreasonable burden on the opposing party or undermine the practical finality and stability expected from the prior judgment.

A notable Supreme Court case illustrating this is the decision of September 30, 1976 (Minshu Vol. 30, No. 8, p. 799). In that case, the Court invoked the good faith principle to prevent a party from making claims in a subsequent lawsuit that were found to be substantially an attempt to re-litigate matters that had been, for all practical purposes, resolved by a prior judgment between the parties, even if the strict objective scope of res judicata did not formally cover those specific points.

Practical Implications for Litigants

Navigating the finality of judgments in Japan requires attention to these nuances:

  1. Narrow Res Judicata: Understand that, generally, only the formal disposition of the soshobutsu in the operative part of the judgment has res judicata effect. Detailed factual findings or legal rulings in the judgment's reasoning are typically not independently binding in subsequent, different lawsuits.
  2. No Automatic Issue Preclusion (Sōtenkō is Not Recognized): Do not assume that simply because an issue was decided in a prior Japanese case, it will be automatically precluded from re-litigation in a subsequent case involving a different soshobutsu under a distinct sōtenkō doctrine.
  3. Strategic Use of Intermediate Declaratory Judgments (CCP Art. 145): If the binding resolution of a preliminary or disputed legal relationship is crucial for the overall case and for future certainty, parties should consider proactively seeking an intermediate declaratory judgment on that specific issue. This will ensure that the court's determination on that point gains res judicata effect.
  4. The Principle of Good Faith (Shingi-soku) as a Potential Shield: While sōtenkō is not a formal doctrine, the good faith principle can be argued to prevent an opponent from unfairly re-litigating issues that were central to, and thoroughly addressed in, prior proceedings. Documenting inconsistent positions or abusive litigation tactics can be important.
  5. Thorough Litigation of All Key Issues: Even if a finding in the reasoning of a judgment may not have formal res judicata or sōtenkō effect, it is still crucial to litigate all important issues thoroughly in the first instance. Such findings, while not strictly binding, can be highly persuasive in subsequent proceedings and can provide a strong basis for a later argument that re-litigation would violate the principle of good faith.

Conclusion

The Japanese civil procedure system defines the objective scope of res judicata with a primary focus on the determination of the soshobutsu as expressed in the operative part of a final judgment. Unlike common law systems that have well-developed doctrines of issue preclusion (collateral estoppel), Japan's Supreme Court has consistently refrained from formally adopting a similar doctrine of sōtenkō that would give binding effect to specific issues decided within the reasoning of a judgment.

However, this does not mean that prior judicial findings on specific issues are entirely without consequence in subsequent litigation. The overarching principle of good faith (shingi-soku) serves as a flexible, equitable mechanism that courts can employ to prevent abusive re-litigation and to protect the integrity and practical finality of judicial decisions. For litigants, especially those from jurisdictions with different preclusion rules, a careful understanding of this Japanese framework—the narrow statutory definition of res judicata coupled with the equitable application of the good faith principle—is essential for accurately assessing the preclusive effects of Japanese judgments and for formulating sound litigation and dispute resolution strategies.