Navigating the Prohibition of Lis Pendens (Jūfuku Kiso) in Japan: When Does a Prior Declaratory Action Lose its "Interest" Due to a Subsequent Lawsuit?

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

The principle of lis pendens, known in Japan as jūfuku kiso no kinshi (重複起訴の禁止 – literally, "prohibition of duplicate institution of action"), is a cornerstone of efficient and orderly civil procedure. Its primary objective is to prevent the waste of judicial resources and party efforts that would result from litigating the same dispute simultaneously in multiple proceedings, and to avoid the potential for irreconcilable judgments. Article 142 of the Japanese Code of Civil Procedure (CCP) embodies this principle. However, its application can become complex, especially in scenarios involving a prior declaratory action followed by a subsequent action for performance concerning the same underlying legal issue, particularly if the parties' roles are reversed or a counterclaim is filed. A key development in this area is the "theory of loss of interest in a declaratory judgment" (kakunin no rieki sōshitsuron - 確認の利益喪失論), which can lead to the dismissal of the earlier declaratory action.

Article 142 CCP: The Prohibition of Duplicate Institution of Action

Article 142, Paragraph 1 of the CCP states: "A party may not institute another action with regard to a case pending before a court." This seemingly straightforward rule is designed to prevent the same essential dispute from being litigated concurrently.

Core Requirements for Application:

For Article 142 to apply and bar a subsequent action, two main conditions concerning the "identity of the case" (jiken no dōitsusei - 事件の同一性) must be met:

  1. Identity of Parties: The parties involved in both the pending (prior) action and the newly instituted (subsequent) action must be identical. This includes situations of substantial identity, such as when the plaintiff and defendant roles are merely reversed between the two actions.
  2. Identity of the Subject Matter of Litigation (Soshōbutsu - 訴訟物): This is often the more complex requirement. The "subject matter of litigation" refers to the specific legal claim or right being asserted.
    • Strictly speaking, the soshōbutsu of an action seeking a negative declaration (e.g., "Debt X does not exist") is different from that of an action seeking performance (e.g., "The defendant must pay Debt X"). The former seeks a declaration of non-existence, while the latter seeks an order for performance.
    • However, for the purposes of Article 142, Japanese courts often look beyond the formal prayer for relief to the underlying "right-relationship" (kenri kankei - 権利関係) or the core legal issue in dispute. If both actions fundamentally concern the existence or non-existence of the same debt, obligation, or legal status, they may be deemed to have an identical subject matter in substance, triggering Article 142.

Rationale Behind Article 142:

The prohibition against duplicate actions serves several critical purposes, as affirmed by the Supreme Court (e.g., Supreme Court, December 17, 1991, Minshu Vol. 45, No. 9, p. 1435):

  • Preventing Undue Burden on Defendants: It spares a party from the vexation and expense of defending against the same claim in multiple forums or proceedings simultaneously.
  • Judicial Economy: It avoids the inefficient use of limited judicial resources that would occur if different courts or judges were to conduct redundant examinations of the same factual and legal issues.
  • Avoiding Conflicting Judgments: Perhaps most importantly, it aims to prevent the issuance of multiple, potentially contradictory, judgments on the same matter. Such conflicting judgments, especially if they both acquire the force of res judicata, would undermine legal certainty, predictability, and public trust in the judiciary. While rules of res judicata can technically resolve conflicts between final judgments (often by giving precedence to the later judgment unless it's set aside through a retrial), Article 142 seeks to prevent such conflicts from arising in the first place.

The "Counterclaim" (Hanso - 反訴) Scenario and the "Duplicate Litigation" Debate

A common scenario testing the boundaries of Article 142 involves counterclaims. Suppose Party Y initiates an action against Party X seeking a declaration that Debt A does not exist. While this action is pending, Party X (the alleged creditor) files a counterclaim within the same proceeding, demanding that Party Y perform (pay) Debt A.

Strictly, a counterclaim is a new "institution of action" by the original defendant. However, it is a widely accepted practice in Japan that such a counterclaim concerning the same underlying dispute is generally permissible and does not violate Article 142. The primary justification is that a counterclaim is adjudicated within the same judicial proceeding, typically by the same panel of judges. This consolidation of claims:

  • Eliminates the risk of redundant examination by different courts.
  • Prevents the issuance of conflicting judgments on the same core issue.
  • Allows the original defendant (now counterclaim plaintiff) to proactively seek an enforceable judgment rather than merely defending against a negative declaration.

This practice has fueled an academic debate about whether the true spirit of Article 142 is to prohibit "duplicate litigation" (i.e., two separate, concurrent court proceedings on the same substantive matter) rather than merely a strict ban on any subsequent "institution of action" that factually overlaps with a pending one. If the concerns of judicial economy and conflicting judgments are addressed by handling related claims within a single proceeding (like a claim and counterclaim), then the purpose of Article 142 is arguably met. However, the literal text of Article 142 focuses on the "institution of an action."

It's also worth noting that even a counterclaim might not be entirely immune if, for example, it could be easily severed from the main claim and effectively proceed as a separate litigation, thereby reintroducing the problems Article 142 seeks to avoid.

The Emergence of the "Loss of Interest in a Declaratory Judgment" Theory (Kakunin no Rieki Sōshitsuron)

A significant and influential development in managing overlapping actions, particularly between a prior negative declaratory action and a subsequent performance claim, is the "theory of loss of interest in a declaratory judgment" (kakunin no rieki sōshitsuron - 確認の利益喪失論). This theory offers a distinct approach from simply dismissing the subsequent action under Article 142.

The Core Idea: Subsumption and Efficacy

The fundamental premise of this theory is that an action for performance (and the resulting judgment for performance) is a more comprehensive and effective remedy than a mere declaratory action concerning the same underlying obligation or right-relationship.

  • A declaratory judgment primarily provides res judicata (既判力 - kihanryoku) – a binding determination of the legal relationship. It does not, by itself, provide the means for direct enforcement.
  • A judgment for performance, if granted to the creditor, also carries res judicata regarding the existence of the obligation, but crucially, it also provides the creditor with enforceability (執行力 - shikkōryoku) – the power to compel the debtor to fulfill the obligation through execution proceedings.

Because a performance action aims for this more complete remedy (binding determination plus enforceability), it is considered to "subsume" or "envelop" (包摂・包含関係 - hōsetsu・hōgan kankei) the objectives of a purely declaratory action regarding the same substantive issue.

The Consequence: Dismissal of the Prior Declaratory Action

If a comprehensive action for performance is validly instituted (most clearly when it's a counterclaim within the same proceedings as the declaratory action), the prior, less comprehensive declaratory action may be deemed to have lost its "interest to confirm" (kakunin no rieki - 確認の利益) or, more broadly, its "benefit of an action" (訴えの利益 - uttae no rieki). This "interest" is a procedural requirement for maintaining any lawsuit, and its absence leads to a procedural dismissal.

Thus, under this theory, instead of the subsequent action for performance being dismissed under Article 142, it is the prior declaratory action that is dismissed (却下 - kakka) on the procedural ground that it no longer serves a sufficiently useful purpose. This allows the more effective performance action to proceed to a substantive judgment. The Supreme Court endorsed this approach in a case decided on March 25, 2004 (Minshu Vol. 58, No. 3, p. 753).

This outcome is seen as procedurally elegant because:

  1. It avoids potentially conflicting substantive judgments by ensuring only one such judgment (on the performance claim) is rendered on the core disputed obligation.
  2. It prioritizes the remedy that provides the creditor with a direct means of enforcement.
  3. It addresses the overlap without necessarily barring the creditor's substantive claim, as a straightforward application of Article 142 to the creditor's performance suit might.

Scope and Limitations of the "Interest Loss" Theory

While the kakunin no rieki sōshitsuron offers a sophisticated solution, its application has important considerations:

Primary Application: Claim and Counterclaim

The theory is most clearly and frequently applied when the subsequent action for performance is brought as a counterclaim within the existing declaratory action proceedings. This ensures that:

  • The same judicial body handles both the initial claim and the counterclaim.
  • Factual findings are likely to be consistent.
  • The resolution is truly "subsuming," as both aspects are addressed in a coordinated manner.
  • A single, comprehensive judgment can be rendered.

Challenges with Separate Subsequent Suits

The application of the "interest loss" theory becomes more complex if the subsequent action for performance is filed as an entirely separate lawsuit, potentially before a different court or judge. In such scenarios:

  • The inherent guarantee of consistent factual findings by the same judicial body is lost.
  • The argument for "subsumption" is weaker, as the two suits proceed independently, and there's no immediate mechanism to ensure the performance suit will indeed render the declaratory suit superfluous in a timely and efficient manner. The prior declaratory action might still have an independent interest in achieving a quicker, albeit less comprehensive, resolution, or in establishing a legal point before a specific tribunal.
  • The risk of conflicting findings or judgments, which the kakunin no rieki sōshitsuron aims to mitigate in the counterclaim context, could paradoxically re-emerge if the two separate suits are not carefully managed by the respective courts (e.g., through stays or consolidations, where possible).

The provided PDF materials suggest that for the "interest loss" theory to operate effectively based on its "subsumption" rationale, the consistent handling of the factual basis—best achieved when the same court addresses both claim and counterclaim simultaneously—is a critical underlying premise.

Specific Procedural Contexts:

The interaction with specialized or expedited procedures also requires careful thought. For example:

  • A bill of exchange action (tegata soshō - 手形訴訟) is designed for swift enforcement of rights arising from bills of exchange. Such an action often follows a simplified and expedited procedural track and may not be permissible as a counterclaim in an ordinary declaratory action concerning the underlying debt. If a debtor first files a declaratory action for non-existence of the bill debt, and the creditor subsequently files a tegata soshō, simply dismissing the tegata soshō under Article 142 could defeat its legislative purpose. In such cases, courts might prioritize the specialized tegata soshō or find alternative ways to manage the overlapping proceedings, rather than automatically applying the "interest loss" theory to dismiss the prior declaratory suit, especially if they are proceeding as entirely separate actions.

International Litigation Considerations:

The application of these principles in an international context adds further layers of complexity. The Tokyo District Court decision of February 19, 2013 (Hanrei Times No. 1391, p. 341) involved a prior Japanese declaratory action concerning a patent transfer obligation, followed by a Japanese proceeding to enforce a final Korean judgment that had ordered the patent transfer. The Tokyo District Court, in dismissing the Japanese declaratory action for lack of interest, drew an analogy to the domestic "interest loss" theory, viewing the enforcement action as a "subsequent continuation" of the Korean performance suit. However, this application is debatable. The "interest loss" theory typically applies to pending performance suits that can offer a more complete resolution, not to the enforcement of already final foreign judgments. Moreover, a domestic declaratory action might still retain an independent interest in such international scenarios, for example, as a vehicle to challenge the recognition or enforcement of the foreign judgment on grounds such as public policy (Article 118 (iii) of the CCP).

Strategic Implications for Litigants

Understanding these rules is crucial for strategic decision-making:

  • For Alleged Creditors: If served with a negative declaratory action (e.g., a suit claiming a debt is not owed), filing a prompt counterclaim for performance can be a powerful strategy. It not only allows for an affirmative assertion of the claim but also potentially triggers the "interest loss" theory, leading to the dismissal of the debtor's declaratory action and shifting the focus to the creditor's pursuit of an enforceable judgment.
  • For Alleged Debtors: When considering a negative declaratory action, it's important to assess whether such an action provides a genuine and necessary benefit that cannot be better achieved by awaiting (and then defending) a potential performance suit from the creditor. The risk that a subsequent performance counterclaim by the creditor could render the declaratory action procedurally moot should be factored into the initial decision.
  • Court's Case Management: While these principles and theories provide a framework, Japanese courts also possess inherent powers and a degree of discretion in managing their dockets, including the possibility of consolidating related cases or staying one proceeding pending the outcome of another, always aiming for procedural efficiency and substantive justice. The stage of the proceedings in the prior declaratory action can also influence the court's decision; a nearly concluded declaratory action might not be readily dismissed even if a performance counterclaim is filed late in the process.

Conclusion

The prohibition of lis pendens under Article 142 of the Japanese Code of Civil Procedure is a fundamental rule aimed at ensuring orderly and efficient litigation. The "theory of loss of interest in a declaratory judgment" represents a sophisticated judicial development that refines the handling of specific types of overlapping actions—primarily a prior negative declaratory suit and a subsequent performance claim concerning the same core dispute. By potentially leading to the dismissal of the prior declaratory action in favor of the more comprehensive performance claim (especially when filed as a counterclaim), this theory prioritizes the more effective remedy and helps avoid conflicting substantive judgments. For legal professionals involved in Japanese civil disputes, a clear grasp of when and how Article 142 applies, and the specific conditions under which a prior declaratory action might lose its procedural viability due to a subsequent performance claim, is indispensable for sound strategic planning and effective case management.