We Have a Foreign Judgment Against a Japanese Entity: How Can We Get it Recognized and Enforced in Japan?

Japanese Attorney at Law - Bengoshi L.L.

• 11 min read

Obtaining a favorable judgment in a foreign court against a Japanese entity is often only half the battle. For that judgment to have practical effect in Japan—for instance, to seize assets located there—it must first be "recognized" (shōnin, 承認) and then, if it orders payment or another action, be made enforceable through a Japanese court procedure leading to an "execution judgment" (shikkō hanketsu, 執行判決). Japan has a well-defined statutory framework for this process, primarily laid out in Article 118 of its Code of Civil Procedure (CCP) (Minji Soshōhō, 民事訴訟法) for recognition, and Article 24 of the Civil Execution Act (Minji Shikkōhō, 民事執行法) for enforcement.

This article provides a detailed examination of the conditions under which a foreign judgment can be recognized and enforced in Japan, offering insights crucial for any business or legal professional facing this scenario.

It's important to understand the distinction between recognition and enforcement:

  • Recognition (Shōnin): This is the process by which a Japanese court acknowledges the legal validity and effects of the foreign judgment within Japan. If a foreign judgment meets the criteria set out in CCP Article 118, it is generally recognized automatically (jidō shōnin seido, 自動承認制度) without needing a special court procedure solely for recognition. This means its res judicata effect (claim preclusion) would be acknowledged in Japan.
  • Enforcement (Shikkō): If the foreign judgment orders the defendant to pay a sum of money or perform a specific act (i.e., it's a judgment capable of execution), recognition alone is not enough to compel compliance in Japan. The judgment creditor must obtain an "execution judgment" from a Japanese district court. This execution judgment essentially domesticates the foreign judgment for enforcement purposes in Japan. The court issuing the execution judgment will verify that the conditions for recognition under CCP Article 118 are met.

A critical principle in both recognition and enforcement proceedings is the prohibition of re-examination of the merits (jisshitsuteki sai-shinsa no kinshi, 実質的再審査の禁止) of the foreign judgment (Civil Execution Act, Article 24, paragraph 2, also understood to apply to recognition). Japanese courts will not re-litigate the substance of the dispute that was decided by the foreign court.

Core Requirements for Recognition of Foreign Judgments (CCP Article 118)

CCP Article 118 sets out five cumulative requirements that a foreign judgment must satisfy to be recognized in Japan:

1. Final and Conclusive Judgment (CCP Article 118, main text - Kakutei Hanketsu, 確定判決)

The foreign judgment must be "final and conclusive." This means:

  • It must be a decision rendered by a foreign "court" (which can include tribunals if they exercise judicial power).
  • It must pertain to private law relationships and be the result of proceedings where the parties had an opportunity to be heard (procedural due process).
  • Crucially, it must be "final" in the sense that it is no longer subject to ordinary forms of appeal in the country where it was rendered. Provisional or interim orders are generally not considered "final" for this purpose.

2. Jurisdiction of the Foreign Court (Indirect Jurisdiction - CCP Article 118, item 1 - Kansetsu Kankatsu, 間接管轄)

The foreign court that rendered the judgment must have had proper international adjudicatory jurisdiction from the perspective of Japanese law. This is often termed "indirect jurisdiction" because it's an assessment made by the recognizing court (Japan) after the fact, as opposed to "direct jurisdiction" which a court assesses for itself when initially hearing a case.

  • Standard of Assessment: Japanese courts do not simply accept the foreign court's assertion of its own jurisdiction. Instead, they determine whether the foreign court's jurisdiction would be considered acceptable under Japanese principles of international jurisdiction. While there isn't a specific statute detailing these principles for indirect jurisdiction, a Supreme Court judgment of April 24, 2014 (Minshū Vol. 68, No. 4, p. 329) clarified that the assessment should be based on "sound reason (jōri), in light of whether it is appropriate for Japan to recognize the foreign court judgment given the specific circumstances of the individual case, while generally referring to the provisions concerning international jurisdiction in Japan's Code of Civil Procedure." This suggests a flexible approach, often starting with an analogy to Japan's own CCP rules for direct jurisdiction (e.g., CCP Articles 3-2 to 3-10), but allowing for adjustments based on the specific context of recognition. This is a departure from a strict "mirror image theory" (where foreign jurisdiction is only found if a Japanese court would have had jurisdiction in the reverse situation).

3. Proper Service of Process on the Defendant (CCP Article 118, item 2 - Sōtatsu, 送達)

This requirement ensures procedural fairness to the losing defendant:
"The losing defendant must have received service of a summons or order necessary for the commencement of the action (excluding service by publication or any other similar service), or must have appeared in the action without challenging service."

  • Purpose: To guarantee that the defendant had adequate notice of the proceedings and a fair opportunity to present their defense.
  • Key Considerations (Guided by Supreme Court judgment, April 28, 1998, Minshū Vol. 52, No. 3, p. 853):
    • Compliance with Service Treaties: If a treaty on service of documents exists between Japan and the country where the judgment was rendered (e.g., the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters – the "Hague Service Convention"), its provisions must have been complied with. The issue of whether direct postal service from abroad into Japan is permissible under the Hague Service Convention (Article 10(a)) when the originating state has not objected to it, has been a point of contention, though Japan itself has not objected to incoming postal service under this article. The Japanese interpretation and practice regarding the validity of such service for recognition purposes can be complex, often turning on whether it meets both treaty requirements and domestic due process standards.
    • Actual Notice and Opportunity to Defend: Regardless of formal compliance, the service must have been such that the defendant could actually become aware of the commencement of the proceedings and had sufficient time and opportunity to prepare and present a defense. This can involve assessing whether the documents were served in a language understood by the defendant (or accompanied by a translation) and whether the timeframe for response was adequate.
  • Appearance by Defendant: Even if service was defective, this requirement is satisfied if the defendant appeared in the foreign proceedings (either personally or through a representative) and defended the case on the merits without making a timely objection to service or jurisdiction based on improper service. An appearance solely to contest jurisdiction is generally not considered a submission for this purpose.

4. Compatibility with Japanese Public Order (CCP Article 118, item 3 - Kōjo, 公序)

"The content of the judgment and the judicial proceedings of the foreign court must not be contrary to the public order or good morals of Japan."

This is a fundamental safeguard. "Public order" here refers to Japan's international public order, which encompasses the core, fundamental principles of Japanese law and justice. It's a narrower concept than domestic public policy.

  • Substantive Public Order: This relates to the content or outcome of the judgment. A foreign judgment will be denied recognition if its substance is fundamentally offensive to Japanese legal or moral principles.
    • Example: Punitive Damages. A significant portion of a foreign judgment that awards punitive damages (as opposed to compensatory damages) is likely to be considered contrary to Japanese public order and thus unenforceable in Japan. The Supreme Court judgment of July 11, 1997 (Minshū Vol. 51, No. 6, p. 2573) held that the part of a U.S. judgment awarding punitive damages violated Japanese public order because the Japanese legal system for torts is primarily compensatory, and punitive damages serve purposes (punishment and deterrence) akin to criminal penalties.
    • Other examples might include judgments enforcing contracts for illegal activities under Japanese law or judgments that grossly violate fundamental human rights recognized in Japan.
  • Procedural Public Order: This relates to the fairness and integrity of the foreign proceedings that led to the judgment. If the foreign proceedings were tainted by serious procedural irregularities, such as lack of judicial impartiality, fraud in obtaining the judgment, or a fundamental denial of the right to be heard (beyond mere service issues), the resulting judgment might be denied recognition on procedural public order grounds.

5. Reciprocity (CCP Article 118, item 4 - Sōgo no Hoshō, 相互の保証)

"Reciprocity must be assured." This means that the country where the foreign judgment was rendered must provide reciprocal recognition and enforcement for comparable judgments from Japanese courts.

  • Standard of Assessment: The Supreme Court judgment of June 7, 1983 (Minshū Vol. 37, No. 5, p. 611) established a liberal interpretation of reciprocity. It does not require that the foreign country's recognition rules be identical to Japan's. Reciprocity is deemed to exist if the foreign country's conditions for recognizing Japanese judgments are not substantially more burdensome than Japan's conditions under CCP Article 118, or if the overall effect is that Japanese judgments are generally recognized without undue difficulty. The conditions must not differ "in any material respect."
  • Existence of Treaties: If a bilateral or multilateral treaty ensuring mutual recognition and enforcement of judgments exists between Japan and the foreign country, reciprocity is clearly established.
  • Burden of Proof: While the party seeking recognition generally bears the burden of establishing the requirements, for reciprocity, Japanese courts often undertake their own research or rely on established precedents regarding specific countries. For U.S. federal and many state court judgments, reciprocity has generally been found to exist with Japan.

While CCP Article 118 provides the general framework, specific considerations apply to foreign judgments concerning personal status:

  • Foreign Divorce Decrees, Parentage Judgments, etc.: These are generally considered "judgments" subject to the full set of requirements under CCP Article 118. The amended Personnel Litigation Act also presupposes the application of these general principles.
  • Foreign Non-Contentious Family Court Decisions: For decisions from foreign courts in non-contentious family matters (e.g., certain types of adoption orders, guardianship appointments, if rendered by a court-like body), historically, CCP Article 118 was not directly applied. Instead, similar requirements, particularly regarding the foreign body's jurisdiction and compatibility with Japanese public order, were often applied by analogy. However, the amended Domestic Relations Case Procedure Act (Article 79-2) now explicitly provides for the mutatis mutandis application of CCP Article 118 to final and conclusive decisions in foreign domestic relations cases (including those by equivalent public authorities). This brings greater clarity and consistency. For enforcement of such orders if they contain an order for payment or performance, the Civil Execution Act provisions for execution judgments would also apply.

Analyzing Scenarios

Let's consider adapted scenarios based on Case 30, No. 30 from the reference material.

Scenario 1: Commercial Judgment with Punitive Damages (Adapted from Problem 1)

  • Facts: Company J (Japanese) sold machinery to Company X (Country A entity). An employee of Company X, Mr. E, was injured while using the machinery and sued both Company X and Company J in a Country A court. The summons for Company J was sent by direct mail from Mr. E's lawyer in Country A to Company J's office in Japan. The Country A court rendered a judgment ordering Company J and Company X to pay Mr. E $300,000 in compensatory damages and $1,000,000 in punitive damages. This judgment is final. Mr. E now seeks to enforce this judgment against Company J in Japan. Assume Country A is a party to the Hague Service Convention.
  • Analysis:
    1. Finality (CCP Art. 118, main text): The judgment is stated to be final. This is met.
    2. Indirect Jurisdiction of Country A Court over Company J (item 1): This would depend on Company J's connections to Country A. Did Company J purposefully market or sell its machinery in Country A, or have other contacts making it reasonable for Country A courts to exercise jurisdiction from a Japanese perspective? If, for example, the machinery was sold directly into Country A by Company J, jurisdiction might be found.
    3. Service of Process (item 2): Service was by direct mail from a lawyer.
      • Hague Service Convention Compliance: Japan has not objected to Article 10(a) of the Hague Service Convention, which pertains to sending judicial documents by postal channels directly to persons abroad. However, whether this constitutes "service" in a manner that triggers the commencement of proceedings and is acceptable under the Convention and for CCP 118 purposes can be debated. Some views are that Art 10(a) only permits "sending" and not formal "service" for initiating lawsuits.
      • Actual Notice and Opportunity to Defend: Even if formally permissible under a treaty interpretation, did the direct mail (likely in Country A's language) provide Company J with actual notice and a fair opportunity to defend (e.g., sufficient time, understanding of the claim)? This is a critical factual inquiry. Lack of a Japanese translation for a Japanese company could be a significant issue.
    4. Public Order (item 3):
      • Compensatory Damages ($300,000): Assuming other conditions are met, this portion is likely compatible with Japanese public order.
      • Punitive Damages ($1,000,000): As per the Supreme Court precedent (July 11, 1997), this portion, aimed at punishment and deterrence rather than compensation, would almost certainly be found contrary to Japanese public order and thus unenforceable in Japan.
    5. Reciprocity (item 4): This would need to be assessed based on Country A's laws and practices regarding Japanese judgments. Assume it exists for this analysis.
  • Likely Outcome: The punitive damages portion would be denied recognition. The compensatory portion might be recognized and enforced if the jurisdiction and service requirements are satisfied.

Scenario 2: Foreign Divorce and Custody Decree (Adapted from Problem 2)

  • Facts: Ms. D (dual Japanese/Country Y national) and Mr. E (Country Y national) married in Country Y and later moved to Japan, where they lived and had a child, F. After marital breakdown, Mr. E returned to Country Y and sued Ms. D (still in Japan) for divorce there. Ms. D appeared in the Country Y proceedings through a lawyer and contested jurisdiction. The Country Y court asserted jurisdiction based on both parties being Country Y nationals and granted: (i) a divorce, (ii) custody of F to Mr. E, and (iii) an order for Ms. D to hand over F (who is in Japan with Ms. D) to Mr. E.
  • Analysis:
    1. Finality: Assume the judgment is final.
    2. Indirect Jurisdiction of Country Y Court (item 1): This is a crucial and potentially contentious point.
      • Divorce: From a Japanese perspective, would a Country Y court have jurisdiction over a divorce when Ms. D (a Japanese national for PIL purposes if habitually resident in Japan) is domiciled in Japan, and the child also resides in Japan? While common nationality can be a basis for jurisdiction in some systems, Japanese courts might find that Japan has stronger connections, especially concerning a resident Japanese national. If the Y court's jurisdiction is deemed exorbitant or lacking a substantial connection from Japan's viewpoint, recognition could be denied.
      • Custody and Handover of Child F: Jurisdiction for custody matters is heavily guided by the child's best interests and often linked to the child's habitual residence. Since F is in Japan, Japanese courts would likely consider themselves to have primary jurisdiction regarding F's welfare. A Country Y court asserting custody jurisdiction based solely on parental nationality, especially for a child habitually resident in Japan, might not be recognized as having proper indirect jurisdiction by a Japanese court.
    3. Service/Appearance (item 2): Ms. D appeared in the Country Y proceedings through a lawyer, even if it was to contest jurisdiction. This would generally satisfy the requirement of CCP Article 118, item 2, as she had notice and an opportunity to be heard (and indeed was heard on jurisdiction).
    4. Public Order (item 3):
      • Divorce Decree: If the jurisdictional hurdle is overcome, the divorce itself might be recognized, assuming no other public policy violations.
      • Custody and Handover Order: Even if the Y court's jurisdiction for divorce were accepted, the part of the judgment ordering custody to Mr. E and the handover of Child F (who is in Japan) would face intense scrutiny under Japanese public order. Japanese courts prioritize the child's best interests and may conduct their own assessment. Enforcing a foreign custody order that potentially conflicts with the child's current welfare or established life in Japan, especially if the foreign court's jurisdictional basis for custody is weak from a Japanese perspective, could be deemed contrary to public order. This is particularly true if it involves uprooting a child from their habitual residence without a compelling welfare-based reason recognized in Japan.
    5. Reciprocity (item 4): To be assessed for Country Y.
  • Likely Outcome: Recognition of the divorce decree is uncertain, heavily dependent on the Japanese court's view of the Country Y court's jurisdiction. Recognition and enforcement of the custody and child handover order are highly doubtful due to jurisdictional concerns from a Japanese perspective and strong public policy considerations centered on the child's welfare and habitual residence in Japan.

Practical Steps and Conclusion

To enforce a foreign monetary judgment in Japan, the judgment creditor must file a new lawsuit in a Japanese district court seeking an execution judgment (Civil Execution Act Article 24). This lawsuit will examine whether the foreign judgment meets all the requirements of CCP Article 118. If the execution judgment is granted, it can then be used to levy execution on the debtor's assets in Japan through standard Japanese enforcement procedures.

Successfully recognizing and enforcing a foreign judgment in Japan requires meticulous attention to the detailed requirements of CCP Article 118. Issues related to the foreign court's jurisdiction, proper service, and conformity with Japanese public order are often the most critical hurdles. Early legal advice on the prospects of recognition and enforcement is crucial for any party holding a foreign judgment against a Japanese entity with assets in Japan.