International

International (New York Law)

Admitted in New York, we support cross-border contracts, U.S. litigation and overseas fundraising.

Key Points

  • For cross-border contracts, the governing-law and dispute-resolution clauses are decisive. How the governing law is set (Japanese, New York, English, etc.) greatly changes the cost and outlook if a dispute arises.
  • New York law is one of the most widely used systems for governing international commercial transactions. Negotiating on equal footing with U.S. companies requires fluency in common-law contract practice—representations and warranties, indemnities, and conditions precedent.
  • U.S. disputes carry a discovery burden on a completely different scale from Japan. Document management and negotiation strategy must be built on U.S. practice assumptions well before matters reach litigation.
  • International M&A and overseas fundraising (SAFEs, preferred stock) turn on differences in tax, regulation and contract practice between Japan and the U.S. Design with both Japan's Companies Act and Foreign Exchange Act and the U.S. structure in view.
  • Combining efficient coordination with local counsel and practical landing points grounded in the realities of Japanese companies.

Introduction

International legal work—and U.S. legal work in particular—is an unavoidable area in the overseas expansion and global management of Japanese companies. Whether entering the U.S. market, transacting with U.S. companies, responding to U.S. litigation, or raising capital from overseas investors, situations invariably arise that cannot be handled with Japanese legal knowledge alone.

Drawing on New York bar admission, our firm leverages a systematic understanding of Anglo-American law to support international transactions, contract negotiations, and dispute resolution. New York law is one of the most widely adopted legal systems as the governing law for international commercial transactions in the United States, and it is used daily in international commercial dealings, financial transactions, and M&A.

Informed by U.S.-style contract-negotiation practices, document management premised on litigation, preparation for discovery procedures, and an understanding of U.S. regulation (economic sanctions, export controls, the FCPA, and the like), we provide practical support for the overseas expansion of Japanese companies.

That said, the formal issuance of legal opinions and litigation representation concerning U.S. local law (federal regulation, individual state laws, and litigation procedure) are, as a rule, provided in coordination with local U.S. counsel. Our firm serves as the bridge between the Japanese-side client and U.S. counsel, and takes charge of the legal and strategic design of the transaction.

Areas of Practice

1. Cross-Border Contracts and Governing Law - International sales agreements, license agreements, and business alliance agreements - Strategic choice of governing law, jurisdiction, and dispute-resolution clauses - Designing international limitation-of-liability and indemnity clauses - Force majeure and contract change management

2. Response to U.S. Litigation in Coordination with U.S.-Based Counsel - Initial response when litigation is filed in the U.S. - Discovery response and litigation-hold orders - Response to class actions - Disputes over extraterritorial jurisdiction and forum non conveniens - Recognition and enforcement of judgments and asset preservation

3. Cross-Border M&A and Overseas Investment - Due diligence in the acquisition of U.S. and overseas companies - SPAs (Share Purchase Agreements) and Asset Purchase Agreements - Reps & Warranties, indemnity, and escrow design - Closing conditions and regulatory approvals (CFIUS, antitrust, etc.) - Joint venture agreements

4. U.S. Regulatory Compliance in Coordination with U.S.-Based Counsel - Economic sanctions (OFAC SDN list) screening and license applications - Export control regulation (EAR, ITAR) compliance - FCPA (Foreign Corrupt Practices Act) compliance - Data protection (CCPA, etc.; see the "Data Protection" practice area for details) - Antitrust law (Hart-Scott-Rodino premerger notification, etc.)

How We Approach Typical Matters

The following illustrate the kinds of matters we handle and how we would approach them. They are not descriptions of past engagements or results.

Scenario 1: Negotiating a Cross-Border License with a U.S. Company

Drafts presented by U.S. counterparties often contain terms unfavorable to the Japanese side across issues such as (1) exclusivity and field definitions; (2) royalty calculation; (3) audit rights; (4) representations and warranties; (5) indemnities; (6) governing law; and (7) dispute resolution.

In this situation we first sort the issues into those that cannot be conceded, those open to negotiation, and those that can be given up, and prepare counterproposals informed by U.S. practice. On governing law and dispute resolution we design a negotiating position that may include moving to a neutral jurisdiction, and we seek workable landing points on royalty structures and the scope of audit rights.

Scenario 2: Defending U.S. Product Liability Litigation

When proceedings are commenced in the United States in connection with an exported product, service of process, discovery, and litigation hold obligations all arise at once.

In such a matter we assist with (1) selecting local counsel; (2) formulating litigation strategy (weighing early settlement against a full defense); (3) briefing Japanese management and relevant departments and supporting their decision-making; (4) implementing the litigation hold across the organization; (5) handling discovery of Japanese-language documents, including bridging linguistic and cultural gaps; and (6) mediating between U.S. legal risk and the realities of the Japanese business in settlement negotiations.

How to Engage Us

  1. Initial Consultation (first 30 minutes free / available online): We hear the overview of the matter, the countries involved, and its urgency. Bilingual Japanese/English support is available.
  2. Estimate and Proposal: We present the scope, timeline, and whether coordination with local counsel is needed.
  3. Commencement and Progress Sharing: We manage progress with time-zone differences in mind and operate coordination with local counsel efficiently.
  4. Completion and Aftercare: We can also provide continued international legal support, periodic reviews, and support when entering new markets.

Contact

For consultations relating to international legal work and New York law, please reach out via our contact form. Inquiries in English are also welcome.

Frequently Asked Questions

Q.How does New York bar admission add value to work within Japan?
It delivers significant value even in domestic Japanese work on matters that involve international issues, including: (1) drafting and reviewing English-language contracts; (2) negotiating with overseas companies; (3) introducing U.S.-style document- and risk-management approaches; (4) rapid response to overseas litigation; and (5) U.S. regulatory compliance.
Q.What is the difference between retaining a U.S. attorney directly and retaining a Japan-based holder of New York bar admission?
Formal legal opinions and litigation representation concerning U.S. local law (federal regulation, state-specific regulation, and litigation procedure) are the domain of local U.S. attorneys. On the other hand, our firm has the advantage in (1) efficiency of communication with the Japanese-side client; (2) alignment with Japanese business practices and management judgment; and (3) cost efficiency. In practice, coordination between the two is often the optimal solution.
Q.What should we choose as the governing law for a cross-border contract?
We make a comprehensive judgment based on (1) fit with the nature of the transaction; (2) the stability and predictability of the legal system; (3) neutrality; and (4) enforceability. In international commercial transactions, New York law, English law, and Singapore law are frequently adopted. When choosing Japanese law, we also consider the counterparty's resistance and likelihood of acceptance.
Q.If we are sued in the U.S., what should we do first?
The initial steps are: (1) confirming the validity of service of process; (2) strictly observing the response deadline (usually 21–30 days); (3) selecting local counsel; (4) instituting a litigation hold within the company; (5) notifying the insurer; and (6) considering settlement possibilities at an early stage. Missing the deadline by even a single day risks a default judgment.
Q.We are considering acquiring a U.S. company. What differences from Japanese companies should we watch out for?
The major differences from Japanese companies are: (1) the use of Reps & Warranties insurance; (2) escrow design; (3) assessing whether CFIUS (Committee on Foreign Investment in the United States) review is needed; (4) the handover of employment contracts (understanding at-will employment); (5) the handover of employee health and pension plans; (6) the existence of pending litigation or regulatory investigations; and (7) the tax structure (inversion rules, etc.).
Q.We are taking investment from a U.S. VC via a SAFE. What should we watch out for?
The main issues are: (1) the combination of Valuation Cap, Discount, and MFN; (2) the Pro-Rata Right; (3) dilution simulation at conversion; (4) consistency with existing Japanese investors; (5) adjustments at a future Series A; and (6) tax matters (foreign exchange and deferral). You need to proceed with an understanding of the differences from Japan's J-KISS as well.
Q.We are worried about the risk of violating U.S. economic sanctions (OFAC). What should we do?
The standard response is: (1) building a system to screen counterparties against the SDN list, the SSI list, and the various sectoral lists; (2) obtaining end-user certificates; (3) assessing the risk of transactions routed through third countries; (4) considering voluntary self-disclosure in the event of a violation; and (5) establishing an internal compliance program. The penalties for a violation include criminal sanctions and are extremely serious.
Q.Is a Delaware Flip necessary?
We consider it at the stage where raising capital from overseas VCs—U.S. VCs in particular—begins in earnest. We make a comprehensive judgment weighing the benefits (ease of raising from U.S. investors and flexibility at IPO or M&A) against the drawbacks (tax complexity, legal cost, and taxation of founders and existing investors). Timing is important: doing it too early or too late drives up costs.
Q.For a Japanese startup beginning overseas expansion, what legal foundations should be put in place first?
The basic elements to establish early are: (1) English-language templates for NDAs, MSAs, and SaaS terms; (2) securing trademarks and domains in the major jurisdictions; (3) an export-control and economic-sanctions screening system; (4) a privacy policy (GDPR/CCPA compliant); (5) the choice of entity form when establishing a local base; and (6) the design of employment contracts and equity compensation for overseas hires.
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