What is a 'Provisional Execution Clause' (Kari-Shikko Sengen) in a Japanese Judgment and How Does It Impact Creditors?

In the realm of civil litigation, obtaining a favorable judgment is a significant milestone. However, the practical value of that judgment often hinges on its enforceability. Typically, a judgment must become "final and binding" (確定 - kakutei), meaning all avenues of appeal are exhausted or appeal periods have lapsed, before the winning party can initiate compulsory execution measures. In Japan, however, a crucial mechanism known as "Provisional Execution" (仮執行の宣言 - Kari-Shikkō Sengen) can alter this timeline significantly, providing a potent tool for judgment creditors. This article explores the nature of this declaration, the conditions under which it is granted, its profound impact on creditors (including U.S. businesses), and the countermeasures available to debtors.

Understanding Provisional Execution (Kari-Shikkō Sengen)

A Declaration of Provisional Execution is a specific clause that a Japanese court can include directly within the "Shubun" (主文) – the operative main text – of its judgment. When granted, it empowers the judgment creditor (the winning party) to commence compulsory execution (強制執行 - kyōsei shikkō) against the judgment debtor even if the judgment has not yet become final and binding. This means enforcement actions, such as the seizure of assets, can potentially begin while an appeal is still pending or during the period in which an appeal could be filed.

The primary purpose of provisional execution is to safeguard the creditor's ability to realize their adjudicated claim promptly. It aims to prevent situations where a debtor might use the appeal process merely for delay, during which they could dissipate assets, become insolvent, or otherwise frustrate the ultimate satisfaction of the judgment. The legal basis for this mechanism is found within Japan's Code of Civil Procedure (notably Article 259).

When is Provisional Execution Granted?

The court's decision to grant provisional execution depends on several factors, including the nature of the claim and specific procedural circumstances.

1. Eligible Types of Claims

Provisional execution is primarily applicable to "claims concerning property rights" (財産権上の請求 - zaisankenjō no seikyū). This most commonly includes judgments ordering the payment of money, but can also apply to other property-related claims.

2. Discretionary vs. Mandatory Declaration

• Generally Discretionary (Code of Civil Procedure, Article 259, Paragraph 1): In most cases, the decision to grant provisional execution rests within the court's discretion. The court will grant it "if it deems it necessary" (必要があると認めるときは - hitsuyō ga aru to mitomeru toki wa).
  This involves a careful balancing act: the court weighs the potential prejudice to the creditor if execution is delayed against the potential prejudice to the debtor if execution proceeds and the judgment is later overturned or modified on appeal. The perceived strength of the judgment and the likelihood of it being upheld are also relevant considerations.
  While the court possesses the authority to grant provisional execution ex officio (職権で - by its own authority), it is common practice for it to be granted upon the application of the prevailing party. Indeed, if a creditor does not actively request it, the court may be less inclined to grant it, reasoning that the creditor is not urgently seeking such protection.
• Mandatory in Certain Cases (Code of Civil Procedure, Article 259, Paragraph 2): There are specific situations where the law mandates the court to declare provisional execution. These include judgments based on claims that were not disputed by the defendant during the oral argument, or judgments for the payment of money based on a bill of exchange or promissory note (when specific procedural rules for such instruments are invoked). In these instances, if the court omits the declaration, it constitutes an error that must be rectified by a supplementary judgment.

3. Judgments Where Provisional Execution is Typically Not Granted

Certain types of judgments, by their nature, are generally not amenable to provisional execution:

• Declaratory Judgments (確認判決 - kakunin hanketsu): These judgments merely confirm an existing legal right or status (e.g., confirming ownership of property). They do not order performance, so there is nothing to "provisionally execute" in the typical sense.
• Formative Judgments (形成判決 - keisei hanketsu): These judgments directly create, alter, or extinguish a legal relationship (e.g., a judgment of divorce, or rescinding a fraudulent transaction). Again, they are generally self-effectuating or alter legal status directly, making provisional execution inappropriate, barring specific statutory exceptions.
• Judgments Ordering an Expression of Intent (意思表示を命ずる判決 - ishi hyōji o meizuru hanketsu): For example, a judgment ordering a party to complete procedures for real estate registration. In Japan, a confirmed judgment ordering an expression of intent can, under certain laws, be deemed to be that expression of intent itself. Thus, the need for pre-finality execution to compel the act of expressing intent is often obviated.
• Litigation Costs: It's noteworthy that the portion of any judgment that orders the payment of litigation costs can be declared provisionally executable, even if the main part of the judgment is not.

The Role of Security (担保 - Tanpo) in Provisional Execution

The issue of security (collateral, typically a monetary deposit) is closely intertwined with provisional execution, serving to balance the parties' competing interests.

1. Security Provided by the Enforcing Creditor (Plaintiff)

When granting provisional execution, the court may or may not require the judgment creditor (the party seeking to enforce) to provide security.

• Discretionary Cases (Art. 259, para. 1, CCP): The court has the discretion to decide whether security is needed from the creditor, and if so, the amount.
• Mandatory Cases (Art. 259, para. 2, CCP): When provisional execution is mandatory (e.g., for undisputed claims), it is generally granted without requiring security from the creditor. However, the court retains the power to order security even in these cases if exceptional circumstances warrant it (as per the proviso to Article 259, paragraph 2).
• Purpose of Creditor's Security: This security is intended to compensate the debtor for any damages they might suffer as a result of the provisional execution if the original judgment is later modified or overturned on appeal. If the debtor successfully appeals and the initial judgment is reversed, the assets seized or payments made under provisional execution would have to be returned, and the debtor might have incurred additional losses.
• Factors for Determining Security: The court considers the same balance of potential harms and the apparent strength of the creditor's claim when deciding on the necessity and amount of security.
• Common Practice: For straightforward monetary claims, provisional execution is frequently granted, often without the creditor needing to post security. However, for non-monetary claims, such as judgments ordering the eviction from real property, requiring security from the creditor is more common due to the potentially significant and irreversible consequences of premature execution.

2. Phrasing of Provisional Execution in the Shubun

The Shubun will clearly state whether provisional execution is granted and if security is required:

• Without Security from Creditor: 「この判決は、仮に執行することができる。」 (Kono hanketsu wa, kari ni shikkō suru koto ga dekiru.) – "This judgment may be provisionally executed."
• With Security from Creditor: 「この判決は、原告が金○○万円の担保を供するときは、仮に執行することができる。」 (Kono hanketsu wa, genkoku ga kin marumaru man'en no tanpo o kyōsuru toki wa, kari ni shikkō suru koto ga dekiru.) – "This judgment may be provisionally executed if the plaintiff provides security of X million yen."
• Multiple Parties: If security is required in a case involving multiple defendants against whom execution is sought, the Shubun must clearly specify who is to provide security for whose benefit or against whom.

3. Methods of Providing Security

Security is typically provided by depositing money with the court or by lodging certain types of securities approved by Supreme Court rules. Parties may also agree on alternative methods of providing security.

Declaration to Avert Provisional Execution (仮執行免脱の宣言 - Kari Shikkō Mentatsu no Sengen)

Japanese law provides a countermeasure for the judgment debtor to prevent or stay the immediate effects of a provisional execution declaration.

• Debtor's Shield: The "Declaration to Avert Provisional Execution" allows the debtor to avoid the consequences of provisional execution, provided they meet certain conditions.
• Application or Court's Discretion: This declaration can be granted upon the debtor's application or, in some cases, at the court's own discretion (though an application is the usual route).
• Security from the Debtor is Mandatory: Unlike the sometimes-discretionary nature of security from the creditor, if a declaration to avert provisional execution is granted, the judgment debtor must provide security.
• Purpose of Debtor's Security: This security is intended to compensate the judgment creditor for any damages they might suffer due to the delay in being able to enforce their judgment (because they are prevented from executing provisionally) if the original judgment is ultimately upheld after appeals.
• Determining the Amount of Debtor's Security: The court considers factors that are, in a sense, the inverse of those for creditor's security – focusing on the creditor’s potential losses arising from the inability to execute immediately (e.g., continued accrual of interest, risk of debtor's deteriorating financial condition).
• Phrasing in the Shubun: This declaration is also an integral part of the Shubun and directly follows the provisional execution clause.
  • Example: 「ただし、被告が金○○万円の担保を供するときは、その仮執行を免れることができる。」 (Tadashi, hikoku ga kin marumaru man'en no tanpo o kyōsuru toki wa, sono kari shikkō o manukareru koto ga dekiru.) – "However, the defendant may avert its provisional execution if the defendant provides security of X million yen."
• Denial of Application: If a debtor applies for a declaration to avert provisional execution but the court denies this request, the denial is not stated in the Shubun. Instead, the reasons for the denial must be explained in the "Reasons" section of the judgment.

Impact on Creditors (Especially U.S. Businesses)

The presence or absence of a provisional execution clause in a Japanese judgment has significant practical consequences for creditors:

• Significant Advantage for Creditors: A declaration of provisional execution is a powerful tool. It allows a creditor to take immediate steps to secure their claim (e.g., by attaching the debtor's bank accounts or other assets) without waiting for the potentially lengthy appeal process to conclude. This is invaluable, especially if there are concerns about the debtor's solvency or potential attempts to conceal assets.
• Reduces Debtor's Incentive for Frivolous Appeals: The threat of immediate execution can discourage debtors from filing appeals solely for the purpose of delaying payment.
• Strategic Consideration in Litigation: For U.S. businesses deciding whether and how to pursue litigation in Japan, the availability of provisional execution for their type of claim can be an important strategic factor. It is generally advisable for a winning creditor to apply for it.
• Potential Cost and Risk of Providing Security: If the court orders the creditor to provide security as a condition for provisional execution, this represents an upfront financial outlay. There's also the risk that this security could be used to compensate the debtor if the judgment is ultimately overturned.
• Facing a Declaration to Avert Provisional Execution: If the debtor successfully obtains a declaration to avert provisional execution by posting their own security, the creditor's ability to enforce immediately is stayed. However, the creditor then has the debtor's security as a potential source of compensation for damages caused by the delay if the judgment is finally upheld.

If Provisional Execution is Not Granted

If an application for provisional execution is denied, or if it was not applicable or not sought, the judgment creditor must wait until the judgment becomes "final and binding" (kakutei) before they can initiate compulsory execution measures. The "Reasons" section of the judgment would typically explain the basis for denying an application for provisional execution. If the plaintiff's entire claim is rejected, then the question of provisional execution in their favor becomes moot regarding that claim.

Conclusion

The Declaration of Provisional Execution (Kari-Shikkō Sengen) is a critical feature of the Japanese civil judgment system, designed to balance the creditor's need for timely recovery against the debtor's right to due process via appeal. For creditors, particularly international businesses like those from the U.S., securing this declaration in the Shubun can dramatically accelerate the path to enforcement and significantly enhance the practical value of a favorable judgment. Conversely, for debtors, the Declaration to Avert Provisional Execution (Kari-Shikkō Mentatsu no Sengen), though requiring the provision of security, offers a means to temporarily shield assets from immediate seizure while pursuing an appeal. A thorough understanding of these provisions, their conditions, and their strategic implications is essential for any party navigating the post-judgment landscape in Japan.