My Company Needs to Sue in Japan: What Are the Different Types of Claims We Can Make?

When contemplating litigation in Japan, one of the foundational strategic decisions involves selecting the appropriate type of claim—or "action" (uttae 訴え)—that aligns with the company's objectives. The Japanese Code of Civil Procedure primarily categorizes lawsuits into three distinct types based on the nature of the relief sought by the plaintiff: Actions for Performance (Kyūfu no uttae 給付の訴え), Declaratory Actions (Kakunin no uttae 確認の訴え), and Formative Actions (Keisei no uttae 形成の訴え). Understanding the purpose, requirements, and strategic implications of each is crucial for any business facing a potential dispute.

I. Actions for Performance (給付の訴え - Kyūfu no uttae)

Actions for Performance are arguably the most common and straightforward type of lawsuit. Their primary purpose is to compel the defendant to perform a specific act or to refrain from an act (an omission). This is the quintessential action for enforcing rights and securing tangible remedies.

A. Definition and Purpose

An Action for Performance seeks a court judgment ordering the defendant to provide a certain "performance" (kyūfu 給付) to the plaintiff. This performance can be the payment of money, the delivery of specific goods or real property, or the fulfillment of some other obligation. The core aim is the direct and compulsory realization of the plaintiff's asserted right. A successful judgment in such an action typically comes with "enforceability" (shikkō-ryoku 執行力), meaning it can serve as the basis for compulsory execution proceedings if the defendant fails to comply voluntarily.

B. Common Examples in Business Contexts

Businesses frequently resort to Actions for Performance in various scenarios:

• Monetary Claims:
  • Action for payment of sales proceeds (baibai daikin seikyū 売買代金請求) for goods sold or services rendered.
  • Action for repayment of a loan (kashikin henkan seikyū 貸金返還請求).
  • Action for damages (songai baishō seikyū 損害賠償請求) arising from breach of contract, torts (e.g., infringement of intellectual property, unfair competition), or other civil wrongs.
• Non-Monetary Claims:
  • Action for delivery of specific goods, such as machinery or unique items specified in a contract.
  • Action for transfer of title and possession of real estate.
  • Action to demand specific performance of a contractual obligation (e.g., to provide a service), although the enforceability of certain personal service obligations can be complex.
  • Action to demand an omission, such as ceasing an infringing activity (e.g., patent infringement, unauthorized use of a trademark).

C. Future Performance Claims (将来の給付の訴え - Shōrai kyūfu no uttae)

Japanese law also permits "Actions for Future Performance" under specific conditions, as stipulated in Article 135 of the Code of Civil Procedure. This allows a plaintiff to sue for a performance that is not yet due. Such an action can be filed only when there is a "need to make such a claim in advance" (arakajime sono seikyū o suru hitsuyō ga aru toki あらかじめその請求をする必要があるとき).

This "need" is generally interpreted strictly by the courts. It often arises in situations such as:

• Installment payments where the debtor has already defaulted on earlier payments, and there's a high likelihood of future defaults.
• Periodic payments (e.g., rent, royalties) where the obligation is clear, but the due dates extend into the future, and the defendant's willingness or ability to pay is demonstrably in doubt.
• Cases where, without a judgment covering future obligations, the plaintiff would be forced to file multiple lawsuits.

The purpose of allowing future performance claims is to provide timely and comprehensive relief, preventing the plaintiff from having to repeatedly litigate the same underlying issue.

D. Key Considerations

When filing an Action for Performance, the plaintiff must clearly specify the performance sought. The judgment will mirror this specificity, which is essential for subsequent enforcement. The burden of proof lies with the plaintiff to demonstrate the existence of the right and the corresponding obligation of the defendant.

II. Declaratory Actions (確認の訴え - Kakunin no uttae)

Declaratory Actions serve a different purpose: they aim to obtain a judicial declaration on the existence or non-existence of a specific right or legal relationship. Unlike Actions for Performance, they do not directly order the defendant to do anything but rather seek to clarify the legal status between the parties. Historically, this type of action gained recognition later than actions for performance, reflecting a legal system mature enough to value the preemptive clarification of rights.

A. Definition and Purpose

A Declaratory Action seeks a judgment that officially confirms (kakunin 確認) a disputed legal matter. This can be invaluable for resolving uncertainties that could otherwise lead to further disputes or hinder business activities. For example, a company might seek a declaration that it owns a particular patent, that a contract is valid and binding, or, conversely, that it is not obligated under an alleged debt. A judgment in a declaratory action primarily has res judicata effect (kihan-ryoku 既判力), meaning it definitively settles the declared matter between the parties, but it typically lacks direct enforceability for compelling specific actions like payment.

B. The Crucial Requirement: "Interest in Seeking Declaration" (確認の利益 - Kakunin no rieki)

A plaintiff filing a Declaratory Action must demonstrate a specific "interest in seeking declaration" (kakunin no rieki 確認の利益). This is a critical procedural requirement. The courts require this interest because a declaratory judgment, lacking direct enforceability for performance, should only be granted when it serves as an effective and appropriate means to resolve an existing legal uncertainty or instability that directly affects the plaintiff's legal position.

The "interest in seeking declaration" is generally recognized when:

1. There is an existing dispute or concrete threat to the plaintiff's rights or legal status.
2. The plaintiff's legal position is genuinely insecure or unstable due to this dispute or threat.
3. A declaratory judgment would be an effective and appropriate means to eliminate this insecurity or instability and definitively resolve the core of the dispute between the parties.

An interest might be denied if, for example:

• The declaration sought pertains to a purely academic question or a hypothetical situation.
• The issue concerns a past legal relationship that no longer has any bearing on the present rights of the parties.
• A more direct and conclusive remedy, such as an Action for Performance, is readily available and more appropriate to resolve the dispute fully. (This is often referred to as the "subsidiarity" or "supplementary nature" of declaratory actions, though it's not an absolute bar).

C. Types of Declaratory Actions

1. Positive Declaratory Actions (積極的確認の訴え - Sekkyokuteki kakunin no uttae): These seek to confirm the existence of a right or legal relationship.
   • Examples: Action to confirm ownership of property, action to confirm the validity of a contract, action to confirm one's status as a shareholder.
2. Negative Declaratory Actions (消極的確認の訴え - Shōkyokuteki kakunin no uttae): These seek to confirm the non-existence of a right or legal relationship.
   • A prominent example is an action for a declaration of non-existence of debt (saimu fusonzai kakunin soshō 債務不存在確認訴訟). This allows a party who believes they are being wrongly pursued for a debt to proactively seek a court ruling that the debt does not exist. Such actions can have an "offensive" character, compelling the alleged creditor to prove the existence of the debt in court.
   • Other examples: Action to declare non-infringement of a patent (though specific procedural routes for this may exist under patent law).
3. Action for Confirmation of Authenticity of a Document (証書真否確認の訴え - Shōsho shinpi kakunin no uttae): Provided for in Article 134 of the Code of Civil Procedure, this action specifically seeks a declaration as to whether a document, which could create or evidence a legal right or relationship, is genuine or forged. This can be crucial when the validity of a contract, will, or other important instrument is in question.

D. Strategic Value for Businesses

Declaratory Actions offer significant strategic advantages:

• Preemptive Resolution: Clarify legal uncertainties before they escalate into more damaging disputes involving performance or damages.
• Risk Management: Ascertain the scope of rights or obligations, for instance, regarding intellectual property (e.g., freedom to operate by confirming non-infringement, or confirming ownership).
• Negotiation Leverage: A favorable declaratory judgment can strengthen a company's bargaining position.
• Defensive Strategy: A negative declaratory action can put the onus on the other party to substantiate their claims.

III. Formative Actions (形成の訴え - Keisei no uttae)

Formative Actions are unique in that they seek a judgment that directly creates, modifies, or extinguishes a legal right or relationship. The court's judgment itself brings about the legal change, rather than merely ordering performance or declaring an existing status.

A. Definition and Purpose

A Formative Action, or Keisei no uttae, aims to alter the existing legal landscape. The judgment in such an action has a "formative effect" (keisei-ryoku 形成的効力), meaning the legal change is effected by the judicial decision itself. Unlike the other two types of actions, the right to bring a formative action (keisei-soken 形成訴権) generally must be explicitly provided for by statute. A party cannot simply request any desired legal change; there must be a specific legal basis authorizing the court to make such a formative judgment.

B. Key Characteristics

• Statutory Basis: Formative actions are permissible only when specific laws grant the right to seek such a change through litigation (principle of statutory formative claims - 形成訴権の法定性 keisei-soken no hōtei-sei).
• Formative Effect of Judgment: The judgment itself alters the legal relationship (e.g., annuls a resolution, divides property).
• Potential Third-Party Effect (Taisei-kō 対世効): Some formative judgments, particularly in areas like company law or family law, can have effects that extend to third parties who were not directly involved in the lawsuit. This is often to ensure legal stability and clarity regarding the status in question.

C. Examples Relevant to Businesses

Many formative actions are found in specific areas of law, with company law being a particularly relevant field for businesses:

• Company-Related Litigation (Kaisha kankei soshō 会社関係訴訟):
  • Action for Annulment of a Shareholders' Resolution (kabunushi sōkai ketsugi torikeshi no uttae 株主総会決議取消しの訴え): Allows shareholders to challenge and seek the annulment of a resolution passed at a shareholders' meeting on grounds of procedural flaws or substantive illegality (e.g., Article 831 of the Companies Act).
  • Action for Declaration of Nullity of a Shareholders' Resolution (kabunushi sōkai ketsugi mukō kakunin no uttae 株主総会決議無効確認の訴え): Seeks a declaration that a resolution is void ab initio due to severe defects. While framed as a "declaratory action" in name, its effect can be formative in clarifying a null status.
  • Action for Declaration of Non-existence of a Shareholders' Resolution (kabunushi sōkai ketsugi fusonzai kakunin no uttae 株主総会決議不存在確認の訴え): Challenges the very existence of a purported resolution.
  • Action for removal of a director (torishimariyaku kainin no uttae 取締役解任の訴え) under specific circumstances.
• Actions Affecting Contractual or Property Rights:
  • Action for Rescission of a Fraudulent Act (sagai kōi torikeshi soshō 詐害行為取消訴訟): This allows a creditor to annul an act by a debtor (e.g., transfer of assets) that was done with the knowledge that it would prejudice the creditor's ability to recover the debt (often referred to as an "actio Pauliana"). The judgment revokes the fraudulent act with respect to the creditor.
  • Actions for partitioning co-owned property.
• Intellectual Property:
  • In some instances, actions leading to the cancellation or invalidation of a registered IP right (e.g., a patent or trademark) through court proceedings (though administrative routes are often primary) can be seen as having a formative character.

D. Strict Requirements

Given their powerful effect, formative actions are often subject to strict statutory requirements, including:

• Standing (Plaintiff's Qualification): Only specific persons designated by law may file the action.
• Time Limits (Statute of Limitations): Strict periods for filing are common (e.g., within three months for annulment of a shareholders' resolution).
• Specific Grounds: The law will enumerate the specific reasons for which such an action can be brought.

IV. Choosing the Right Type of Action: Strategic Considerations

The choice among these three types of actions is a critical initial step in any litigation strategy in Japan. The decision hinges on the ultimate goal:

• If direct enforcement of an existing right (e.g., payment, delivery) is needed, an Action for Performance is appropriate.
• If clarification of a disputed legal status or right is the primary objective, or if a preemptive legal determination is sought, a Declaratory Action should be considered, paying close attention to the "interest in seeking declaration."
• If the goal is to directly change an existing legal relationship or status, and a statutory basis exists, a Formative Action is the path.

It's also possible for a plaintiff to combine different types of claims in a single lawsuit (joinder of claims - uttae no heigō 訴えの併合), provided certain conditions are met, such as the claims being subject to the same type of court procedure and having a related basis. For instance, a plaintiff might seek a declaration of a contractual right and damages for its past breach (performance).

Conclusion

The Japanese civil litigation system provides a structured framework of distinct claim types, each designed to achieve different legal outcomes. For businesses operating in or with Japan, understanding the nuances of Actions for Performance, Declaratory Actions, and Formative Actions is fundamental. This knowledge allows for a more precise articulation of legal needs and the formulation of an effective strategy tailored to the specific circumstances of a dispute, ultimately contributing to more predictable and successful legal navigation in the Japanese jurisdiction. Engaging with counsel experienced in Japanese procedural law is essential to make the most appropriate choices in this complex area.