29 July, 2012
Legal News & Analysis – Asia Pacific – Japan – Regulatory & Compliance
An amendment to the Japanese Code of Civil Procedure to provide foreign entities with a clearer picture of the jurisdiction of Japanese courts over international disputes was enacted in April 2011 and became effective from April 2012. Prior to the amendment, there was no statute regarding international jurisdiction and for many years the issue was governed by precedents established by the Japanese Supreme Court.
Under the new rule:
- general jurisdiction is exercised by Japanese courts where a natural person defendant has his/her domicile in Japan, or a legal person defendant has its principal office in Japan;
- even when general jurisdiction is not applicable, if, among other things, any of the following bases are found, Japanese courts may exercise jurisdiction over such cases:
- place of performance – under Japanese law, the place of performance is considered to be the domicile of the obligee except where the required performance is delivery of specific things;
- existence of seizable property in Japan – this special jurisdiction can be used to broadly reach foreign entities;
- a business office of a foreign entity in Japan – not directly applicable to a "Japanese subsidiary";
- continuous business place in Japan, and place of tortuous acts or the harmful effects of the tortuous act suffered in Japan.
The new rule has also brought major changes to jurisdiction over actions relating to consumer contracts and labour relationships.
