Res Judicata in Japan (Kihanryoku) - Part 2: Distinguishing "Arising," "Extending," and How Non-Covered Issues are Treated

In Part 1 of this series, we explored the foundational nature of res judicata (Kihanryoku - 既判力) in Japanese civil procedure, focusing on the prevailing "Binding Force Theory" and the three core scenarios—Identity, Preliminary Question, and Contradictory Relationships—where its preclusive effect operates. However, the practical application of Kihanryoku involves further subtleties. This second part delves into the crucial distinction between when Kihanryoku "arises" versus when it "extends" or "applies" to subsequent matters. Furthermore, we will examine how Japanese law addresses attempts to re-litigate issues that, while perhaps falling outside the formal scope of Kihanryoku, still challenge the finality and integrity of prior judgments, primarily through the application of the Principle of Good Faith (Shingi-soku - 信義則).

Clarifying Terminology: When Kihanryoku "Arises" (Shōjiru) vs. When It "Extends" or "Applies" (Oyobu)

A frequent source of confusion in understanding Kihanryoku lies in the precise use of terminology related to its existence and its effect on later proceedings.

• "Arising" (Shōjiru - 生じる): Kihanryoku is said to "arise" from a judgment once that judgment becomes final and unappealable (i.e., it acquires formal binding force - 形式的確定力, keishiki-teki kakuteiryoku). At this point, the determination contained within the judgment inherently possesses the quality of Kihanryoku. This is an intrinsic characteristic of any such finalized judicial decision on the merits.
• "Extending" or "Applying" (Oyobu - 及ぶ): The Kihanryoku that has "arisen" from a prior judgment only "extends" or "applies" its preclusive effect to a subsequent lawsuit if the subject matter of litigation (soshōbutsu - 訴訟物) in that new suit bears one of the three specific relationships to the matter adjudicated in the prior suit:
  1. Identity Relationship (同一関係 - Dōitsu Kankei)
  2. Preliminary Question Relationship (先決関係 - Senketsu Kankei)
  3. Contradictory Relationship (矛盾関係 - Mujun Kankei)

If one of these relationships exists, then the effects of Kihanryoku—such as the binding force on the subsequent court (positive effect) and the preclusion of contradictory assertions by the parties (negative effect, also known as shadan-kō - 遮断効)—become operative in the subsequent action. If none of these relationships are present, then even though Kihanryoku has "arisen" from the prior judgment, it does not "extend" its preclusive force to the new, unrelated case.

Common Misconceptions and Their Rectification:

1. Conflating Objective Scope with Extension/Application:
   Article 114, Paragraph 1 of the Code of Civil Procedure (CCP) defines the objective scope of Kihanryoku: it arises on the determination in the main text of the judgment (主文中の判断 - shubun-chū no handan) concerning the soshōbutsu. It generally does not arise from the court's reasoning or findings of fact presented in the body of the judgment.
   A common error is to incorrectly assume that because Kihanryoku does not arise from the reasoning, it therefore cannot preclude an assertion in a subsequent suit if that assertion merely touches upon something discussed in the prior judgment's reasoning. This is a misunderstanding. If the subsequent suit does fall into one of the three recognized relationships (Identity, Preliminary Question, Contradictory) with the soshōbutsu of the prior suit, then the Kihanryoku which arose on the prior judgment's main text determination will indeed extend to the subsequent suit. In such a case, it can preclude assertions in the new suit that contradict that prior main text determination, even if those new assertions happen to relate to matters that were merely part of the reasoning in the first judgment. The key is the contradiction with the adjudicated outcome on the prior soshōbutsu, not just with a piece of reasoning.
   • Illustrative Example (from the introductory materials):
     • Prior Action: X (seller) sues Y (buyer) for payment of ¥300 million for a car. Y argues the contract is invalid due to mistake. Court rules for X, finding the contract valid (this finding would be in the reasoning, the main text would order payment). Judgment for X (¥300 million payment) becomes final. Kihanryoku arises on the main text determination: "Y owes X ¥300 million under the contract."
     • Subsequent Action: Y sues X for unjust enrichment, alleging the contract was void due to mistake and seeking return of the ¥300 million paid.
     • This subsequent action is in a Contradictory Relationship (or potentially Preliminary Question Relationship) with the prior determination. Therefore, the Kihanryoku of "Y owes X ¥300 million under the contract" extends to the subsequent suit. Y's assertion that "the contract was void due to mistake" directly contradicts the Kihanryoku-backed premise that the contract was valid enough to support the payment obligation. Thus, this assertion by Y would be precluded by Kihanryoku (its negative effect), not because the "validity/mistake" was specifically adjudicated with Kihanryoku in the reasoning of the first suit, but because it contradicts the binding determination in the main text of the first judgment.
2. Assuming Different Soshōbutsu Automatically Means No Extension:
   Another common error is to conclude that if the soshōbutsu of the prior and subsequent actions are formally different, Kihanryoku cannot extend. This is only partially true. It correctly rules out the "Identity Relationship." However, both the "Preliminary Question Relationship" and the "Contradictory Relationship" inherently involve different soshōbutsu between the two actions. Therefore, a mere difference in soshōbutsu is not, by itself, sufficient to declare that Kihanryoku does not apply. The analysis must proceed to consider whether these other two types of relationships exist.

(A brief note on subjective scope: The distinction between "arising" and "extending" can become somewhat blurred when discussing the subjective scope of Kihanryoku—i.e., to whom it extends beyond the original parties (Article 115 CCP). Kihanryoku "arises" between the original parties, and simultaneously, its effect might "extend" to, or "arise" for, certain third parties in privity. This concerns who is bound from the outset by the original judgment, which is a slightly different temporal phase than whether that Kihanryoku later "extends" to a new case involving one of those parties.)

Beyond Formal Kihanryoku: The Role of the Principle of Good Faith (Shingi-soku - 信義則)

While Kihanryoku provides a robust framework for finality, resourceful litigants may sometimes attempt to re-litigate issues in ways that cleverly sidestep its formal scope—for example, by pleading a formally different soshōbutsu that, in substance, amounts to a rehash of a previously decided matter. In such situations, where Kihanryoku does not technically apply to bar the subsequent action, Japanese courts have turned to the Principle of Good Faith (Shingi-soku - 信義則) as a vital supplementary doctrine to prevent abusive or unfair re-litigation. Shingi-soku, akin to the concept of good faith and fair dealing, is a general clause in Japanese law that permeates many areas, including procedural law.

Crucial Distinction: Good Faith Supplements, Not Creates, Kihanryoku

It is essential to understand that this application of shingi-soku is not an "extension of Kihanryoku by good faith" nor does it mean that "Kihanryoku should be recognized because of good faith." Rather, shingi-soku is invoked precisely because formal Kihanryoku does not extend to the specific situation, yet allowing the subsequent suit to proceed would violate fundamental principles of fairness, equity, or reasonable reliance engendered by the prior litigation. Kihanryoku itself is a systemic legal effect that arises from a final judgment irrespective of the parties' good or bad faith conduct. Shingi-soku operates as a distinct equitable control mechanism.

Basis for Invoking Good Faith to Preclude Re-litigation:

The core justification for using shingi-soku to bar a seemingly permissible subsequent action is typically the protection of a party's reasonable and justifiable reliance or expectation that the matter was definitively settled by the prior litigation, even if the newly framed claim technically falls outside Kihanryoku's formal preclusive reach. The court assesses whether allowing the new suit would be so unfair or contrary to the spirit of finality, given the history of the prior litigation, that it amounts to an abuse of the right to sue.

The argument that "procedural guarantee" (tetsuzuki hoshō - 手続保障 – i.e., the party had a full and fair opportunity to be heard in the prior action) justifies preclusion through good faith must be handled with care. While procedural guarantee is a justification for Kihanryoku where it applies, it is not, by itself, a freestanding reason to create Kihanryoku-like effects via good faith where formal Kihanryoku does not attach. The simple fact of having had a day in court on related matters does not automatically mean every subsequent related claim is barred by good faith; the specific nature of the re-litigation attempt and the reliance it frustrates are key.

Two Key Manifestations of Good Faith Preclusion:

Japanese Supreme Court jurisprudence has developed two main patterns for applying shingi-soku to prevent improper re-litigation:

1. Estoppel Based on the Prior Winning Party's Contradictory Conduct (Kin-han-gen no Hōri - 禁反言の法理):
   This doctrine, akin to estoppel by inconsistent positions, applies when the party who won the prior lawsuit subsequently initiates a new lawsuit, or makes critical assertions in a new suit, that fundamentally contradict the essential factual or legal grounds upon which their earlier victory was based.
   • Example: Party A successfully sues Party B to enforce a contract, arguing the contract is valid and binding. Party A cannot then, in a subsequent related dispute (perhaps with B or a third party), argue that the very same contract was invalid from the outset to gain a different advantage, if doing so would be unconscionable given the first judgment.
2. Forfeiture of Right Based on the Prior Losing Party's Re-assertion (Kenri Shikkō no Hōri - 権利失効の法理):
   This principle, adapted from the general doctrine of laches or forfeiture due to undue delay (though applied differently here), addresses situations where the party who lost the prior lawsuit attempts to re-litigate the same core issues by filing a new suit with a formally different soshōbutsu. This is applied when those core issues were thoroughly contested by both sides and dispositively decided against the losing party within the essential reasoning of the prior judgment, and where that reasoning was indispensable to the prior outcome.
   • Stringent Conditions: For this type of good faith preclusion to apply, several conditions must generally be met:
     • The issue in question must have been a central point of serious contention in the prior suit.
     • The party now seeking to re-litigate must have had a full and fair opportunity to litigate that issue in the prior action (a high degree of "procedural guarantee" on that specific point).
     • The prior court's finding on the issue, though contained in the reasoning, must have been an indispensable part of the logical chain leading to its final decision on the soshōbutsu.
     • The opposing party must have formed a legitimate and reasonable expectation, based on the comprehensive nature of the prior litigation and the decisiveness of the finding, that this specific issue would not be re-opened between them.
       This is sometimes referred to as a "judgment-mediated good faith" concept because the reliance is not just on party conduct but on the perceived finality of specific, crucial findings within a prior judgment's reasoning. (A leading case often cited in discussions of good faith preclusion, though factually specific, is Supreme Court, September 30, 1976, Minshu Vol. 30, No. 8, p. 799).

Procedural Effect: Dismissal of Action (Uttae Kakka)

A significant practical difference exists between preclusion by Kihanryoku and preclusion by shingi-soku.

• When Kihanryoku (under the prevailing Binding Force Theory) applies to bar a claim, the typical outcome, if no new facts arising after the prior judgment's kijunji are successfully proven, is a substantive judgment rejecting the claim on its merits (seikyū kikyaku - 請求棄却).
• In contrast, when a subsequent action is barred by the Principle of Good Faith, the more common outcome sanctioned by the Supreme Court is a procedural dismissal of the action as inadmissible (uttae kakka - 訴え却下). This means the court does not rule on the merits of the subsequent claim at all; rather, it dismisses the suit because the very act of bringing it is deemed contrary to good faith principles and an abuse of the litigation process.

A Third Level: Heightened Scrutiny for Tort Claims Alleging a Fraudulently Obtained Prior Judgment

Beyond Kihanryoku and shingi-soku, there's a distinct, third level of judicial control over attempts to effectively undo prior judgments. This arises when a party files a new lawsuit alleging that the prior judgment was obtained through fraudulent or other illicit means by the opponent, and seeks damages in tort.

The soshōbutsu of such a tort claim is formally different from that of the prior action (e.g., contract claim vs. tort claim for fraudulent procurement of judgment). Therefore, Kihanryoku from the first judgment usually doesn't directly apply to bar the tort claim based on the three standard relationship categories.

However, if the substance of the tort claim is that the factual or legal basis of the prior judgment was false, and the damages sought essentially aim to reverse the economic outcome of that prior judgment, it "substantially contradicts the determination with res judicata effect of the prior judgment." The Supreme Court (e.g., Supreme Court, April 13, 2010, Saibanshu Minji No. 234, p. 31) has established that such tort claims are generally impermissible due to the paramount interest in legal stability and the finality of judgments, unless exceptionally stringent, special circumstances are demonstrated. These typically include:

1. Intentional harm: The defendant in the tort action (i.e., the winner of the prior suit) acted with the intent to harm the rights of the opponent.
2. Grave unjust procedural conduct: The defendant engaged in serious misconduct in the prior suit, such as actively deceiving the court with fabricated evidence or preventing the opponent from meaningfully participating in the proceedings.
3. Grossly unjust outcome: The resulting prior judgment must be one that should never have occurred, and its continued effect or enforcement would be so profoundly contrary to justice that it outweighs the strong societal need for the finality of judgments.

This approach does not apply or extend Kihanryoku to the tort claim. Instead, it significantly "raises the bar" for the elements required to establish the tort itself in this specific context, thereby protecting the integrity of prior adjudications unless truly egregious circumstances warrant a collateral attack through a damages claim. The primary avenue for directly overturning a judgment tainted by such defects remains a retrial (再審 - saishin) if the strict grounds for retrial are met.

Conclusion (Part 2)

The doctrine of Kihanryoku in Japan, while centered on the formal preclusion of re-litigating the same soshōbutsu under specific relational conditions, is complemented by equitable principles designed to uphold the spirit of finality. Accurately distinguishing between when Kihanryoku "arises" from a judgment and when its preclusive force "extends" to a subsequent action is the first critical step. Beyond this, the Principle of Good Faith (Shingi-soku) provides an essential, albeit carefully applied, tool to prevent substantive re-litigation that undermines prior adjudications, even when formal Kihanryoku is not triggered. Finally, the judiciary maintains a high threshold for allowing prior judgments to be collaterally attacked through tort claims. A comprehensive understanding of these interconnected layers of preclusion is indispensable for assessing the true finality of Japanese judgments and for strategizing in any litigation that might touch upon previously decided matters.