Enforcing Foreign Judgments in Japan: The Enforcement Judgment, the Four Conditions of Article 118, Punitive Damages and Service

A foreign judgment, even a final one, cannot be enforced against assets in Japan on its own. The creditor must file a suit in a Japanese district court for an "enforcement judgment" and show that the foreign judgment is final and meets the four conditions of Article 118 of the Code of Civil Procedure: jurisdiction of the foreign court, proper service on the defendant, consistency with Japanese public policy, and reciprocity (Civil Execution Act Art. 24).

The Japanese court does not re-examine whether the foreign judgment was correct on the merits. However, the punitive portion of a US damages award, and judgments in cases where the defendant was not served in a way the Hague Service Convention allows, will not be enforced in Japan.

• You won a judgment in a US state court against a Japanese business partner, but the partner has no assets in the United States.
• Your company in Japan received an English-language complaint from a US court directly by ordinary mail or courier.
• You learn after the fact that a default judgment was entered against you in the US, and the creditor says it will seize your assets in Japan.
• As a foreign company, you want to collect on your home-court judgment against a Japanese company and do not know where to start.

A final judgment of a foreign court has effect in Japan only if it meets all four conditions of Article 118 of the Code of Civil Procedure. If it does, no separate recognition proceeding is needed. To execute against assets in Japan, however, the creditor needs a separate "enforcement judgment" from a Japanese court.

An enforcement judgment is a Japanese judgment declaring that compulsory execution based on the foreign judgment is permitted. A foreign judgment with a final enforcement judgment becomes a "title of obligation" (saimu meigi), the document on which execution is based (Civil Execution Act Art. 22(vi)).

The foreign judgment must also be final. If finality is not proven, the suit for an enforcement judgment is dismissed (Civil Execution Act Art. 24).

A judgment still open to appeal, or one that is only provisionally enforceable, is not enough. Obtaining proof of finality from the court that issued the judgment is the first practical step.

The jurisdiction of the foreign court must be recognized under Japanese laws or treaties (Code of Civil Procedure Art. 118(i)). This is called "indirect jurisdiction."

The Supreme Court has held that this is decided basically in line with the international jurisdiction rules of Japan's Code of Civil Procedure, while asking, in light of the specific facts, whether it is appropriate for Japan to recognize the judgment as a matter of reason (Supreme Court, April 24, 2014, Minshu Vol. 68, No. 4, p. 329). In other words, the question is not whether the foreign court had jurisdiction under its own law, but whether jurisdiction exists by Japanese standards.

In practice, the disputes focus on forum selection clauses, where the defendant has offices, and where the tort took place. If there is a forum selection clause, check whether the judgment came from the court the parties agreed on.

The losing defendant must have received service of the summons or order needed to commence the action, or must have appeared in the action without having been served (Code of Civil Procedure Art. 118(ii)). Service by public notice and similar methods does not count (same item).

The Supreme Court has held that where a judicial assistance treaty between the judgment country and Japan requires a particular method of service, service that does not follow the treaty fails this condition (Supreme Court, April 28, 1998, Minshu Vol. 52, No. 3, p. 853). In that case, hand delivery in Japan by a person privately engaged by the plaintiff did not satisfy the requirement.

The key treaty is the Hague Service Convention (Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters). Japan and the United States are both parties, and Japan's Central Authority is the Ministry of Foreign Affairs. In December 2018, Japan gave notice of its opposition to service through foreign diplomatic or consular agents (Article 8) and to sending documents directly by postal channels (Article 10(a)).

The content of the judgment and the court proceedings must not be contrary to public order or good morals in Japan (Code of Civil Procedure Art. 118(iii)). The Supreme Court has held that not only the content but also the way the judgment came about must be consistent with Japanese public policy (Supreme Court, June 7, 1983, Minshu Vol. 37, No. 5, p. 611).

The leading example on content is US punitive damages.

On the other hand, an order that one party bear all litigation costs, including attorneys' fees, is not contrary to public policy as long as it is limited to costs actually incurred (Supreme Court, April 28, 1998, cited above). A remedy is not refused simply because Japan has no equivalent.

On procedure, the Supreme Court held that it violates public policy where it was possible to inform a party of the judgment, but the party in fact had no real opportunity to learn of it, and the judgment became final without any chance to appeal (Supreme Court, January 18, 2019, Minshu Vol. 73, No. 1, p. 1). For a Japanese company facing a US default judgment, how the judgment was communicated can be a real issue.

The judgment country must recognize Japanese judgments under similar conditions (Code of Civil Procedure Art. 118(iv)). The Supreme Court has held that it is enough if, in the judgment country, a Japanese judgment of the same kind would be given effect under conditions that do not differ in any important respect from those of Article 118 (Supreme Court, June 7, 1983, cited above). In that case, reciprocity was found for money judgments from the District of Columbia.

In the United States, recognition of foreign judgments is governed by state law, so reciprocity must be checked state by state. The Supreme Court has also found reciprocity for money judgments with Hong Kong before its return to China (Supreme Court, April 28, 1998, cited above). Rather than relying on general country lists, check the law of the judgment jurisdiction and the Japanese case law for each case.

A suit for an enforcement judgment is generally filed with the district court for the debtor's general forum, such as the location of its head office (Civil Execution Act Art. 24). If there is no general forum, it is filed where the subject of the claim or attachable assets of the debtor are located (same article).

The court must grant the enforcement judgment without examining whether the foreign judgment was correct (Civil Execution Act Art. 24). What the Japanese court examines is finality and the Article 118 conditions. The defendant cannot relitigate the facts or the amount of damages; it can only argue that a condition is not met.

The suit is heard as ordinary litigation, so it takes time if the defendant contests it. Proceedings in Japanese courts are conducted in Japanese, so translations of the judgment, the proof of finality and the service records are needed.

Interest not stated in the foreign judgment can be added if, under the law of the judgment country, it accrues with the award and is enforceable (Supreme Court, July 11, 1997, Minshu Vol. 51, No. 6, p. 2530).

An enforcement judgment is of little use if the debtor's assets cannot be found. Japan has two court procedures for locating them.

The first is the asset disclosure procedure, in which the debtor is summoned to court and must state its assets. Amendments to the Civil Execution Act in 2019, effective April 1, 2020, made it easier to use, and a debtor who fails to appear or makes false statements may face criminal penalties.

The second, introduced by the same amendments, is the procedure for obtaining information from third parties. Creditors can obtain information on bank deposits and listed shares from financial institutions, and on land and buildings from the registry office.

Information on the debtor's employer is available only for claims such as child support or damages for death or bodily injury, not for ordinary commercial claims. For some types of information, the asset disclosure procedure must be completed first.

If there is a risk that the debtor will dispose of assets before the enforcement judgment, consider a provisional attachment (a civil preservation measure). It temporarily attaches the debtor's assets where future execution may otherwise become impossible or extremely difficult.

Unlike foreign judgments, foreign arbitral awards do not require reciprocity. Japan's Arbitration Act gives an arbitral award the same effect as a final judgment, regardless of whether the seat is in Japan or abroad (Arbitration Act Art. 45(1)). To execute it, the creditor obtains an "enforcement decision" from the court (Arbitration Act Art. 46).

Japan acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in 1961. It now has 172 contracting states, and Japan has declared that it applies the Convention to awards made in other contracting states. Japan is not a party to the 2019 Hague Judgments Convention.

In the reverse case, enforcement of a Japanese judgment abroad is governed by the law of the country or state where enforcement is sought. New York, for example, governs recognition of foreign money judgments in Article 53 of its Civil Practice Law and Rules (CPLR). Its grounds for non-recognition include lack of due process and lack of jurisdiction, and reciprocity is not among them.

Even so, the method of service and the defendant's opportunity to defend are scrutinized almost everywhere. When starting litigation in Japan, it pays to choose the service method with eventual enforcement abroad in mind.

1. 1

   Gather proof of finality

   Obtain an authenticated copy of the foreign judgment and proof that it is final from the issuing court (Civil Execution Act Art. 24).

2. 2

   Check the service records

   Check how the complaint was served on the defendant and keep the records, for example whether it went through the Hague Service Convention's Central Authority (Code of Civil Procedure Art. 118(ii)).

3. 3

   Break down the award

   Separate any punitive or other non-compensatory components (Code of Civil Procedure Art. 118(iii)).

4. 4

   Check reciprocity

   Check the case law on reciprocity between the judgment jurisdiction (the state, in the US) and Japan (Code of Civil Procedure Art. 118(iv)).

5. 5

   Gather leads on assets

   Gather leads on the debtor's assets in Japan, such as its head office, banks, real estate and customers.

If your Japanese company receives a complaint from abroad, keep the date, method of delivery and envelope, and check the response deadline.

• A judgment in your favor has become final abroad, and you know the debtor has assets in Japan.
• There are signs that the debtor may move or sell its assets in Japan.
• Your company in Japan has received a complaint or judgment from a foreign court (whether to defend affects later enforcement directly).
• You have been sued in Japan for an enforcement judgment based on a foreign judgment.

Yusuke Abe of our firm is admitted in Japan and in New York and advises on matters that involve procedures in both countries. Please contact us through our inquiry page.

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No. You must file a suit for an enforcement judgment in a Japanese district court and show that the judgment is final and meets the four conditions of Article 118 of the Code of Civil Procedure (Civil Execution Act Art. 24). Once the enforcement judgment is final, you can execute against assets in Japan (Civil Execution Act Art. 22(vi)).

Not the punitive part. The Supreme Court has held that no enforcement judgment can be given for the portion ordered to make an example of and sanction the defendant (Supreme Court, July 11, 1997). The compensatory portion is assessed separately.

Japan is a party to the Hague Service Convention and, in December 2018, gave notice of its opposition to service by postal channels (Article 10(a)). A complaint simply mailed to you is not service the Convention allows. That does not mean it is safe to ignore; whether to defend affects later enforcement, so decide on a strategy early.

No. An enforcement judgment must be given without examining whether the foreign judgment was correct (Civil Execution Act Art. 24). The court looks only at finality and the four conditions: jurisdiction, service, public policy and reciprocity.

A foreign judgment requires reciprocity, but an arbitral award does not. An award has the same effect as a final judgment even if the seat is abroad, and it is executed after the court issues an enforcement decision (Arbitration Act Arts. 45(1) and 46). Japan is a party to the New York Convention.