The Constitution of Japan establishes five types of courts within a three-tier court system, as follows:

• Three first instance courts depending on the nature or the amount of the claim: 
  • Family courts specialise in family-related matters, such as civil status and probate, as well as juvenile cases. 
  • Summary courts, in principle, handle civil claims not exceeding JPY 1,400,000. There is also a simplified small claims procedure for cases involving less than JPY 600,000.
  • District courts are the primary courts of first instance in most civil cases for claims over JPY 1,400,000. The district courts also hear appeals against decisions and judgments of summary courts in civil cases. Larger district courts, such as those of Tokyo and Osaka, have special divisions or departments for certain disputes such as bankruptcy and insolvency, construction, and intellectual property.
• Appellate courts hear appeals against judgments of the district and family courts. For cases commenced in the summary courts and submitted to the district court for appellate review, the appellate courts are the court of final appeal.
• The Supreme Court, as the highest court, handles appeals against judgments issued by the appellate courts.

The Japanese Code of Civil Procedure (Act No. 109 of 1996) (CCP) is the main body of law governing the conduct of commercial litigation.

Request for answering interrogatories/production of documents

A party who intends to commence litigation can provide advance notice of future litigation to the other party and, within 4 months after providing such advance notice, request that the other party provide a written response with regard to particulars necessary for preparing allegations or proof. The requested party is required to provide the written response unless one of the reasons for refusal specified in the CCP applies (e.g. confidentiality).^[1] Note however that, even if a party fails to provide the written response, there is no statutory penalty but a party’s failure can be taken into consideration in subsequent litigation by the court, which may adversely affect its position.

Also, the court may, upon petition by a party providing advance notice or by a recipient of advance notice that has provided a written response, conduct various dispositions (e.g. requesting an entity, such as a foreign government, to conduct the necessary examination) in connection with the collection of evidence. Dispositions may be granted where the court considers it difficult for the petitioner to collect evidence that will clearly be necessary as proof if the action for which advance notice has been given is filed. However, the court may not conduct dispositions if the court considers that doing so would be inappropriate given the time required for collection of evidence or where this would place an unreasonable burden on the entity responsible for conducting the necessary examination. ^[2]

Examination of Evidence

If the court finds circumstances to be such that unless the examination of evidence is conducted in advance, it will be difficult to use such evidence, the court, upon petition, may conduct an examination of the evidence.^[3] 

Referring to mediation before going to court (Chotei Zenchi Shugi)

Certain disputes, for example family disputes and particular rent disputes, must be first submitted to mediation before going to court. This requirement is not applicable to commercial disputes. 

^{[1]CCP, Article 132-2.} 

^{[2] CCP, Article 132-4.} 

^{[3] CCP, Article 234.} 

There are a variety of alternative methods to resolve commercial disputes in Japan, including court-supervised civil conciliation, commercial arbitration and mediation. 

Arbitration and mediation are the two main ADR methods used to settle large commercial disputes, particularly where international parties are involved. 

ADR features as one of the ongoing reforms to the justice system in Japan. The Arbitration Act, enacted in 2003, is modelled on the 1985 UNCITRAL Model Law on International Commercial Arbitration (Model Law). The Law on the Promotion of the Use of Out of Court Dispute Resolution was enacted in 2004 (ADR Law). 

This will vary depending on various factors, including the complexity of the case, the nature of the claims, the amount in dispute, and the number of parties involved. 

According to the latest available data published by the Japanese Supreme Court, the average length from the commencement of the proceedings to the issuance of a first instance judgment is approximately 10 months (as of 2018).^[4]

^{[4] www.courts.go.jp/vc-files/courts/file4/hokoku_08_02minji.pdf.}

The scope of document production is very limited in Japan. As explained below, a party may file a petition for production of certain document(s) but the courts tend not to issue orders for production at first instance. Instead, the courts tend to first encourage the requested party to voluntarily produce documents before issuing any order for production.

A party can file a petition for an order requiring the other party or a third party to produce certain document(s) if such party has an obligation to produce documents pursuant to Article 220 of the CCP.^[5]

If the courts issue an order for production, the ordered party must produce all documents within the scope of the order that are in its possession, including documents adverse to the producing party, unless the document falls within one of the exceptions where refusing to produce is permitted, such as privilege and confidentiality.^[6] 

If the court determines that the requested party fails to comply with the order, the court may find the petitioner’s allegations concerning the details of the said document to be true.^[7] 

^{[5] CCP, Article 221.} 

^{[6]CCP, Article 220(4).} 

^{[7]CCP, Article 224.}

Fact witnesses normally submit written statements (chinjutsu-sho) first and, depending on the importance of the fact to be proved and the need for examination by counsel and the courts, may give oral evidence. At a hearing, the calling party conducts direct examination first, after which the opposing party conducts cross-examination. Thereafter, the court may pose questions to the witness. Cross-examination tends to take up the majority of time in a hearing. Oral evidence is transcribed in the record (cho-sho) and may be taken into account by the court like any other evidence. Oral evidence, where necessary, is usually given during trial or at an advanced stage of litigation proceedings to help the court better understand relevant facts that may not be clear from a review of the documentary evidence alone.

If a witness fails to appear or refuses to swear under oath or make statements, the court may find that the opposing party's allegations concerning the matters for examination are true.^[8] In addition, a witness who fails to appear without justifiable grounds may be subject to an administrative or criminal fine or detention, or compelled to appear through a subpoena.^[9]

^{[8]CCP, Article 208.} 

^{[9]CCP, Articles 192 to 194.} 

Litigation costs (including filing fees, postage, and witnesses’ travel expenses) may be recovered from the unsuccessful party.^[10] 

Attorneys’ fees are not included in the litigation costs and each party must bear its own attorneys’ fees. However, there are limited circumstances such as in a frivolous or futile action where a party may recover its attorneys’ fees through a claim for damages. Where the court orders by judgment that such damages be paid, the unsuccessful party will be liable for paying the other party’s attorney’s fees.

Separately, the court may order that the successful party bear all or part of litigation costs incurred due to any act that was unnecessary for the expansion or defence of the successful party’s rights, or litigation costs incurred due to any act that was necessary for the expansion or defence of the adverse party’s rights.^[11] If a party delays litigation due to a failure to present allegations or evidence in a timely manner, failure to keep a court date or observe a time frame, or any other grounds attributable to that party, the court may order that party bear all or part of litigation costs incurred due to the delay, even if that party wins the case.^[12] If the parties partially succeed in their claims, counterclaims or defences, the court may apportion the litigation costs between the parties at its discretion.^[13]

^{[10]CCP, Article 61.} 

^{[11] CCP, Article 62.}

^{[12]CCP, Article 63.}

^{[13] CCP, Article 64.} 

Interim attachment (kari sashiosae)

Interim attachments (kari sashiosae) are available to secure the enforcement of a monetary judgment. This order prevents the respondent from dissipating its assets. The court may order an interim attachment if the claimant has presented prima facie evidence (somei) of the claimant’s rights to be secured and the necessity of the interim attachment.

Interim injunctions (kari shobun)

An interim injunction is available to secure the enforcement of a non-monetary judgment through interim injunction proceedings (kari shobun). The court may grant an interim injunction if the claimant has presented prima facie evidence (somei) of the claimant’s rights to the relief requested and the need for an interim injunction. 

There are two types of interim injunctions:

• Interim injunction relating to the subject matter in dispute. This order prevents the respondent from disposing of its assets in dispute or exercising its rights in relation to the assets (e.g. an interim injunction to prevent a respondent from transferring its ownership of real property to a third party).
• Interim injunction temporarily determining the state of affairs between the parties. This remedy is used to prevent the present harm a claimant is suffering and temporarily preserve the claimant’s rights in dispute (e.g. an injunction to prohibit construction works of a building that infringe the claimant’s rights).

The Japanese courts tend to be “pro-arbitration” as shown in the AIU case,^[14] in which the Tokyo District Court held that: “the arbitral procedure is an alternative dispute resolution process based on the agreement of the parties. It does not contemplate an appeal procedure and the arbitral award is final. Further, Article 4 of the Arbitration Act provides that with respect to arbitral proceedings, no court shall intervene except where so provided in this Law. In light of this, it goes without saying that an arbitral award should be respected as much as possible.”

The Arbitration Act (Act No. 138 of 2003) is the main law governing arbitrations seated in Japan.

The Arbitration Act is based on the UNCITRAL Model Law on International Commercial Arbitration (as adopted by the United Nations Commission on International Trade Law on 21 June 1985) (the 1985 Model Law). Although many of the provisions of the Arbitration Act are identical to the 1985 Model Law, there are some departures in that:

• The Arbitration Act provides special treatment for arbitration agreements involving consumers and employees.^[15]
• The Arbitration Act provides that if there is no agreement between the parties as to the substantive law to be applied in determining the concerning dispute, the tribunal shall directly apply the substantive law of the State most closely connected to the dispute (Article 36(2) of the Arbitration Act).^[16] In contrast, the 1985 Model law provides that the tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.^[17]
• The Arbitration Act allows for arbitration agreements to be made by email,^[18] whereas the 1985 Model Law allows for arbitration agreements by facsimile but not email.^[19]

The Arbitration Act provides that, if agreed by both parties in writing, the arbitral tribunal or one or more arbitrators of the tribunal may facilitate settlement negotiations.^[20]

^{[14]Judgment of the Tokyo District Court dated 28 July 2009.}

^{[15] Arbitration Act, Article 13(1), Schedule to the Arbitration Act, Articles 3(2) and 4. The Schedule to the Arbitration Act provides that a consumer may unilaterally terminate an agreement with a business operator to arbitrate disputes that may arise in the future (Article 3(2) of the Schedule). It also provides that an arbitration agreement relating to disputes that may arise in the future between an individual employee and a business employer will be null and void (Article 4 of the Schedule).}

^{[16] Arbitration Act, Article 36(2).}

^{[17] 1985 Model Law, Article 28(2).}

^{[18] Arbitration Act, Article 13(4).}

^{[19] 1985 Model Law, Article 7(2). Note, however, that the 1985 Model Law (with amendments adopted in 2006) provides at Article 7(4) that arbitration agreements may be made by email.}

^{[20] Arbitration Act, Article 38(4).}

Yes. Under the Arbitration Act, an arbitral tribunal is empowered to order any party to take interim measures or provisional measures as it may consider necessary in respect of the subject matter of the dispute, upon the petition of a party.^[21]

Under the current Arbitration Act, interim or provisional measures ordered by a tribunal under Article 24 of the Arbitration Act are not arbitral awards, and so cannot be enforced by Japanese courts. This position may soon change. A new bill to amend the Arbitration Act (that would render interim or provisional measures ordered by an arbitral tribunal enforceable) was recently approved on 21 April 2023 and promulgated on 28 April 2023. The effective date of this amendment has yet to be announced.

^{[21] Arbitration Act, Article 24(1).}

An arbitral award cannot be appealed even if the unsuccessful party is not satisfied with the award. An unsuccessful party may however file an application for setting aside the arbitral award if it considers that there are grounds for setting aside the arbitral award pursuant to Chapter VII (Article 44) of the Arbitration Act. A party that wishes to set aside an arbitral award must file an application for setting aside the arbitral award with the competent district court in Japan within three months from receipt of the award. A party may not file an application for setting aside if an execution order (shikkou kettei) issued by a court in respect of the award has become final and binding.

Japan is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). 

Domestic judgments

Enforceable. The following judgments or decisions are enforceable:

• Monetary judgments.
• Judgments ordering or prohibiting the doing of certain acts/injunctions.
• Orders for interim attachments (kari sashihosae).
• Orders for interim injunctions (kari shobun).

Excluded. The following judgments or decisions are not enforceable:

• Declaratory judgments (kakunin hanketsu).
• Formative judgments (keisei hanketsu).
• Interlocutory judgments (chukan hanketsu).
• Judgments made without notice (ex parte), except for interim attachments and interim injunctions.

Foreign judgments

Enforceable. The following judgments by foreign courts are enforceable in Japan:

• Monetary judgments.
• Judgments ordering or prohibiting conduct/injunctions.

Excluded. The following judgments by foreign courts are not enforceable in Japan:

• Declaratory judgments.
• Judgments pending appeal in the country where the judgments are issued.
• Foreign decisions granting provisional measures or preliminary relief.
• Judgments made without notice (ex parte).
• Foreign enforcement orders/pre-judgment attachment orders.

Foreign judgments

A foreign judgment is recognised if it is final and satisfies all of the following requirements:

1. The foreign court had jurisdiction over the case based on Japanese law or a treaty to which Japan is a party.
2. The unsuccessful party has been served with the requisite summons or order for the commencement of litigation, or has appeared in the proceedings without being so served.
3. The foreign judgment and the foreign court proceedings are not contrary to public policy in Japan.
4. The foreign country recognises a similar judgment rendered in Japan (i.e. the principle of reciprocity).^[22]

To enforce a foreign judgment, the party seeking enforcement must first file an application with the competent court for an execution order (shikkokettei). The enforcement judgment is granted if the foreign judgment is final and satisfies the above four requirements.^[23] The Japanese courts may not determine the merits of the case.

Arbitral awards

Arbitral award to which the Arbitration Act applies

An arbitral award has the same effect as a final and binding judgment in Japan. It is automatically “recognised” and becomes binding without any court order, unless it falls under one of the grounds for the refusal of recognition and enforcement of arbitral awards.^[24]

Similar to the enforcement of a foreign judgment, to enforce an arbitral award in Japan, the party seeking enforcement must first file an application with the competent court for an execution order (shikkokettei). The court will grant such order unless any of the grounds to refuse recognition and enforcement under Article 45(2) of the Arbitration Act have been established.^[25] The Japanese court may not determine the merits of the case.

The grounds for the refusal of recognition and enforcement of arbitral awards are based on and generally correspond to those under the 1985 Model Law. The relevant grounds under Japanese law are as follows:

1. The Arbitration Agreement is not valid due to a party’s lack of capacity.
2. The Arbitration Agreement is not valid on grounds other than the limited capacity of a party pursuant to the laws and regulations designated by the agreement of the parties as those which should be applied to the Arbitration Agreement (if the said designation has not been made, the laws and regulations of the seat of arbitration).
3. A party did not receive the notice required under the laws and regulations of the seat of arbitration in the procedure for appointing arbitrators (unless the parties have agreed otherwise).
4. A party was unable to present a defence in the arbitration proceedings.
5. The Arbitral Award contains a decision on matters beyond the scope of the Arbitration Agreement or a petition in the arbitration procedure.
6. The composition of the Arbitral Tribunal or the arbitration procedure is in violation of the laws and regulations of the seat of arbitration (unless the parties have agreed otherwise).
7. According to the laws and regulations of the seat of arbitration (or if the laws and regulations applied to the arbitration procedure are laws and regulations of a country other than the seat of arbitration, those of the stipulated other country) the Arbitral Award is not final and binding, or the Arbitral Award has been set aside or its effect has been suspended by a judicial body of that country.
8. The petition filed in the arbitration procedure is concerned with a dispute which is not capable of settlement by arbitration pursuant to the provisions of Japanese laws and regulations.
9. The content of the Arbitral Award is contrary to the public policy of Japan.

Foreign Award

The framework for the recognition and enforcement of domestic awards also applies to arbitral awards made outside Japan.^[26] Where the New York Convention applies, Article 45(2) of the Arbitration Act establishes substantially the same legal requirements for enforcement as those found under the New York Convention.

^{[22] CCP, Article 118.}

^{[23] Civil Execution Law, Article 24.}

^{[24] Arbitration Act, Articles 45(1) and 45(2).} 

^{[25] Arbitration Act, Article 46(7)-(9).}

^{[26]Arbitration Act, Article 45(1).} 

In order for the successful party who obtains the judgment (the “judgment creditor”) to execute a foreign judgment or arbitral award, the judgment creditor must file an application for compulsory execution in accordance with the Civil Execution Act (Act No. 4 of 30 March 1979) (CEA) and the Rules of Civil Execution (Rules of the Supreme Court No. 5 of 8 November 1979) (RCE).^[27] 

The procedures used for execution after the application differ, depending on the type of claim being enforced and type of assets for which the compulsory execution is sought, as follows.

Monetary claims 

Where a judgment creditor intends to enforce a monetary claim upheld by a judgment, there are three main categories of assets against which the judgment creditor seeks relief:

• Real property. After an application for compulsory execution against the real property of the unsuccessful party (the “judgment debtor”), the execution court can issue a commencement order for a compulsory auction or administration procedure to seize the real property for the judgment creditor.^[28] In the case of compulsory auction, the execution court sells the seized property by auction. In cases of compulsory administration procedure, an administrator appointed by the execution court collects proceeds from the sale of real property, distributing the proceeds to the creditor.^[29]
• Movable assets. Where the judgment creditor files an application for compulsory execution against movable assets of the judgment debtor, a court execution officer (shikkoukan) can seize such assets.^[30] After seizure, a court execution officer sells the movable assets by bid, auction or any other method specified by the RCE,^[31] and the proceeds are then distributed to the judgment creditor.^[32]
• Monetary claims. For compulsory execution against monetary claims of the judgment debtor, the execution court issues an order of seizure.^[33] This prohibits the judgment debtor from collecting or otherwise disposing of the claims and prohibiting a third-party debtor from making payments to the judgment debtor.^[34] The judgment creditor can directly collect the monetary claims of the judgment debtor from a third-party debtor after one week has elapsed from the day on which an order of seizure was served on the judgment debtor.^[35]

Non-monetary claims

Where the judgment creditor intends to enforce non-monetary claims awarded under the judgment, there are several methods for compulsory execution depending on the nature of the claims to be enforced:

• Delivery of, or surrender from, real property. The compulsory execution is carried out by a court execution officer visiting the site and releasing the real property from the judgment debtor’s possession, and causing the judgment creditor to acquire the possession of such real property.^[36]
• Delivery of movable assets. The compulsory execution is carried out by a court execution officer confiscating the movable assets from the judgment debtor and delivering the property to the judgment creditor.^[37] 
• Execution by Substitute (daitai shikoku). If the action ordered by the judgment can be performed by a third party instead of the judgment debtor, the execution court may issue an order to demand that the third party (normally, a court execution officer) perform that action at the judgment debtor’s expense.^[38] 
• Indirect Compulsory Execution (kansetsu kyosei). If the action ordered by the judgment cannot be performed by a third party, the execution court may order that the judgment debtor pay the judgment creditor a specified amount of money during the period when the judgment debtor fails to perform the action.^[39]

^{[27]The execution procedures are the same as those for a domestic judgment (CEA, Article 22(vi)).}

^{[28] CEA, Articles 45 and 93.}

^{[29] CEA, Articles 95(1) and 107.}

^{[30] CEA, Article 122.}

^{[31] CEA, Article 134.}

^{[32] CEA, Article 139.}

^{[33] CEA, Article 143.}

^{[34] CEA, Article 145.}

^{[35] CEA, Article 155(1).}

^{[36] CEA, Article 168.}

^{[37] CEA, Article 169.}

^{[38] CEA, Article 171.}

^{[39] CEA, Article 172.}

There is no proceeding to allow the successful party to take interim measures after obtaining judgment. If there is a risk that the unsuccessful party dissipates its assets, it is necessary to (i) file a petition for interim measures before judgment is obtained or (ii) obtain the judgment with a declaration of provisional execution (kari shikoku sengen) and file an application for compulsory execution as soon as the judgment is obtained.