International Company Law in Japan (Dai YOKOMIZO)

1
INTERNATIONALCOMPANYLAWIN JAPAN
Dai YOKOMIZO*
I. INTRODUCTION
The purpose of this article is to present Japans legal system regarding international
company law, including recent legislative changes, and to present some concrete issues
which are currently being discussed in Japan.
Japans legislation relating to Private International Law, known as the Horei,
1
did not
contain any provisions identifying the law applicable to companies. However, Article 36
[after the revision of 2006, Article 35] of the Civil Code provides that the juridical
personality of a foreign company is generally recognized.
2
Also, until the enactment of
the Company Act in 2005, Article 482 of the Commercial Code mentioned so-called
pseudo-foreign companies.
3
Since there are very few cases on the matter of companies, and academic opinions are
divided,
4
there has been uncertainty with regard to identifying the law applicable to
foreign commercial companies and how it relates to their recognition.
Recently, the Horei was revised and, in 2006, a new law entitled Ho no tekiyo ni kan
suru tsusoku-ho (the Act on the General Rules of the Application of Laws) was enacted.
5
* Associate Professor of Hokkaido University, School of Law. This article is an outcome of the
research project supported by Grant-in-Aid for Scientific Research by Monbu Kagakusho (Sientific
Research in Priority Areas: Make Japanese Law Transparent Project).
1
Law No. 10/1898.
2
Article 36 (Foreign Juridical Person):
(1) With the exception of any state, any administrative division of any state, and
any commercial corporation, no establishment of a foreign juridical person shall be
approved; provided, however, that, this shall not apply to any foreign juridical
person which is approved pursuant to the provisions of a law or treaty.
(2) A foreign juridical person which is approved pursuant to the provision of the
preceding paragraph shall possess the same private rights as may be possessed by
the juridical person of the same kind which can be formed in Japan; provided,
however, that, this shall not apply to any right which may not be enjoyed by a
foreign national, or a right for which special provision is made in a law or treaty.
The English translation of Civil Code is available at
http://www.cas.go.jp/jp/seisaku/hourei/data/CC_2.pdf.
3
Article 482 (Foreign Companies subject to the same Provisions as those Applicable to Domestic
Companies)
ACompany that establishes its head office in Japan or the primary purpose of which is to carry on
business in Japan shall, even in cases where it is incorporated in a foreign country, be governed by
the same provisions as those applicable to a Company to be incorporated in Japan.
(Translation by Nishimura & Partners, Commercial Code of Japan (2004), p. 492).
4
See generally, Tomotaka Fujita, International Corporate Law in Japan Recent Developments-,
The Japanese Annual of International Law, Vol. 48 (2005), 44.
5
Law No. 78/2006. See generally, Koji Takahashi, AMajor Reform of Japanese Private
International Company Law in Japan (Dai YOKOMIZO)
2
However, this new legislation still does not contain any provision on the law applicable
to companies. Also, the Commercial Code was revised and the Company Act was
enacted in 2005.
6
With regard to pseudo-foreign companies, Article 821 of the
Company Act deals with this issue in a different way from Article 482 in the prerevised
Commercial Code. Even under these new laws, there still exist some ambiguities.
In addition to these fundamental problems, some concrete issues are currently being
discussed in Japan: the law applicable to an international merger, the law applicable on
piercing the corporate veil and the international mandatory rules regarding companies.
The following sections will describe, first, the legal developments before the
enactment of the new laws (II). Second, the influence of these new laws will be
examined (III). Third, some concrete issues currently being discussed in Japan will be
mentioned (IV).
II. REVIEW OF PAST DEVELOPMENTS
7
A. The Intent of the Drafters
The Horei did not contain any provisions relating to the law applicable to the legal
capacity or the internal matters of companies. Article 3, which stipulated the capacity of
persons, was deemed not to be applicable to legal persons.
8
One may wonder whether
the drafters of the Horei forgot the provision regarding companies. This was not the
case.
9
The drafters thought that such a provision would be unnecessary. That is, they
regarded the issue not as a problem relating to the applicable law but rather as one tied
to the recognition of the legal personality of foreign companies.
According to the drafters ideas,
10
a company is strongly connected with the state
which creates it and with the public interest of that state. Accordingly, as with a penal
law, the effect of a company law is limited to the territory of the state which enacted it.
International Law, Journal of Private International Law, Vol. 2, No. 2 (2006), 311; Yasuhiro Okuda,
Reform of Japans Private International Law: Act on the General Rules of the Application of Laws,
Yearbook of Private International Law, Vol. 8 (2006), 145.
6
Law No. 86/2005. This Act has entered into force on May 1, 2006. See, M. Dernauer, Die
japanische Gesellschaftsrechtsreform 2005/2006, ZjapanR, Vol. 20 (2005), 123.
7
See generally, Dai Yokomizo, Hojin ni kansuru Teishoku Ho teki Kosatsu Hojin no Juzoku Ho
ka Gaikoku Hojinkaku no Shonin ka- [Reflections on Legal Persons from the Viewpoint of Conflict
of Laws Law Applicable to Legal Persons or Recognition of Foreign Legal Personalities],
Minshoho Zasshi [The Journal of Civil and Commercial Law], Vol. 135, No. 6 (2007), 1045.
8
See Hoten Chosa-Kai [Code Investigation Commission], Horei Giji Sokki Roku (Tokyo, 1897), p.
49 [Nobushige Hozumi].
9
The drafters refered, in 1894, to the possibility of a stipulation relating to the law applicable to the
capacity of legal persons within Horei. Hoten Chosa-Kai [Code Investigation Commission], Minpo
Sokai Giji Sokki Roku (Tokyo, 1894), p. 272 [Nobushige Hozumi].
10
See Hoten Chosa-Kai [Code Investigation Commission], Minpo Shusakai Giji Sokki Roku (Tokyo,
1893), p. 416.
International Company Law in Japan (Dai YOKOMIZO)
3
A company created under such a law exists only within the territory of that state. It
results from this idea that the problem regarding companies is whether a foreign
person
11
legitimately created in a foreign state should be recognized in Japan. If
recognized, then it legally exists as seen from the Japanese viewpoint. It is said
12
that
the drafters were particularly influenced by the ideas of a famous Belgian scholar of the
19
th
century, Laurent.
13
The drafters ideas could also be tied to the situation at the end of the 19
th
century,
when there were very few Japanese companies which did business abroad. Thus, it
seems that they only thought of the cases where foreign companies might do business in
Japan and they sought to restrict these foreign companies activities as much as possible.
For instance, one will notice from the legislative documents their concern over
pseudo-foreign companies. They discussed, for example, the case of a beer company,
Kirin, which had incorporated itself in Hong Kong but did its business in Japan.
14
Such
a concern affected not only the drafting of Article 36 of the Civil Code, but also Article
258 [later 482] of the Commercial Code, which requires a foreign company to be
subject to the same provisions as a Japanese company if it has its head office in Japan
or its main purpose is doing business in Japan.
15
According to the drafters, these
provisions were sufficient in order to regulate matters concerning foreign companies
and there was no need to mention the applicable law.
16
B. Criticism From the Beginning
The drafters ideas were exposed to the criticism of the scholars from the very
beginning. However, before WWII, only a few scholars criticized the concept of a close
relationship between a company and the state which creates it. For instance, Dr.
Mitshuyoshi Yamada, who claimed the distinction between domestic persons and
foreign persons according to the place of the head office, supported such an idea in
saying that how and which legal persons should be formed is an important matter
11
The term Foreign persons was considered as legal persons organized by the law other than
Japanese law. Kenjiro Ume, Gaikoku Hojin ni tsuite[On Foreign Persons], Hogaku Shirin, No. 46
(1903), 51, p. 55; Hten Chsa-Kai [Code Investigation Commission], Shoho Iinkai Giji Yoroku
(Tokyo, 1897), p. 286 [Nobushige Hozumi].
12
Taro Kawakami, Hojin no Shogai Katsudo Minpo 36 Jo Hitei Ron [International Activities of
Legal Persons], Kokumin Keizai Zasshi [Journal of National Economy], Vol. 78, No. 1 (1942), 43, p.
44 .
13
F. Laurent, Droit civil international, Tome 4 (1880), pp. 256-307.
14
Supre note (10), p. 430 [Toyozo Takagi].
15
Hoten Chosa-Kai [Code Investigation Commission], Shoho Shusei An Sanko Sho (Tokyo,
Reprinted 1985), p. 110.
16
See also, Kazuo Ishiguro, Kinyu Torihiki to Kokusai Sosho [Conflict-of-Laws Problems of
International Banking Transactions] (1983), p. 261 .
International Company Law in Japan (Dai YOKOMIZO)
4
affecting the public interest of the state.
17
This concept was fiercely criticized after
WWII, in particular by Taro Kawakami who supported so-called real seat doctrine.
18
He noted that such an idea was incompatible with the actual development of
international transactions. According to him,
19
companies exist as entities apart from
states. A company should be dealt with in the same manner as a natural person and, like
with the civil law, company law had no territorial limits. Thus, the problem is not the
recognition of foreign legal personalities but rather, which law should be applicable to
the legal capacity of a company.
20
He identified the companys real seat, that is, the
actual head office of the company, as a connecting factor. It follows that Article 36 of
the Civil Code, which recognizes the legal personality of only foreign states,
administrative divisions and commercial corporations, was criticized as very
narrow-minded and unnecessary.
21
He also claimed that, despite Article 36, the
existence of other foreign legal entities which are not recognized under the article
should be accepted according to the tacit choice-of-law rule of Private International Law,
namely, according to the law of its real seat.
22
C. Establishment of the Majority View: Place of Incorporation and its Problems
Interestingly, although Japans private international law is said to belong to the
continental system, Japanese scholars now prefers to use the place of incorporation
rather than the companys real seat as a connecting factor.
23
After WWII, the majority
17
Mitsuyoshi Yamada, Gaikoku Hojin Ron [On Foreign Legal Persons], Hozumi Sensei Kanreki
Shukuga Ronbun Shu [In Honor of Professor Hozumi for 60
th
Birthday] (1915), 877, p. 910 . As
other examples which adopted the same presupposition as the drafters regarding the close
relationship between a company and the state which creates it, Toru Terao, Kokusai Shiho 4 han
[Private International Law, 4
th
edition] (1898), pp. 153-155; Koichi Yamaguchi, Waga Shogai Shigo
ni okeru Gaikoku Hojin [Foreign Persons in our Private International Law], Hogaku-shirin [Review
of law and political sciences], Vol. 15, No. 11 (1913), 99, p. 108 . But see, Sadajiro Atobe, Hojin no
Kokuseki ni kansuru Saikin no Gakusetsu ni tsuite [On recent academic opinions regarding the
nationality of foreign persons], Hogakuronso [Kyoto law review], Vol. 20, No. 2 (1928), 503, p.
526 .
18
Kawakami, supra note (12); Taro Kawakami, Kaisha ni Kansuru Kokusai Shiho Mondai
[Private International Law Issues regarding Companies], Shiho [Journal of Private Law], No. 7
(1952), 112 .
19
See, Kawakami, supra note (12), pp. 44-50.
20
Ibid. According to him, this issue is the same as those of formation of marriage or change of
property.
21
Kawakami, supra note (12), pp. 48-50. He thought that the purpose of this provision could be
achieved by the ordre public provision in Horei. Article 482 of the Commercial Code is ragarded as a
provision for the protection of Japans public order against foreign companies activities. Id., pp.
54-55.
22
Ibid.
23
See for example, Ryohei Hayashi ed. Tyushaku Minpo (2) Sosoku (2) [Commentary on Civil Law
(2) General rules (2)](1974), p. 81 [Yoshio Tameike].
International Company Law in Japan (Dai YOKOMIZO)
5
of scholars supported this approach by saying that, in the end, the legal personality of a
company is given effect by virtue of the law of a certain country, regardless of whether a
company is in nature fictitious or real.
24
Although scholars may thereby appear to have
readopted the ideas of the original drafters, this is not the case. They did not accept the
drafters presupposition about the relationship between a company and a state, nor their
approach toward the recognition of foreign companies.
25
Rather, they share the
fundamental idea of those who advocate looking at a companys real seat, which is to
regard the problem as that of identifying the law applicable to matters concerning
companies.
26
Thus, they distinguish between conflict-of-law rules and alien law rules.
27
They regard Article 36 of the Civil Code as a rule for restricting the activities of foreign
companies in Japan, not as a rule for the recognition of their legal personality.
28
Similarly, they claim that Article 482 of the Commercial Code should be narrowly
interpreted so as not to deny the existence of even pseudo-foreign companies,
29
even
though an Imperial Court decision before WWII denied the personality of a company
incorporated in Delaware as a pseudo-foreign company under this provision.
30
Regarding this majority view, some scholars recently pointed out the ambiguity of its
rationale. For instance, it is said that the fact that the legal personality of a company is
given effect by virtue of the law of a certain country is not sufficient to determine which
connecting factor would be better.
31
Is it not possible that a country which grants legal
personality to a company would also be the one where the company has its head
office?
32
Nowadays, a new rationale is being sought for supporting the use of the place
24
Ryoichi Yamada, Hojin no Zokujin Ho ni Tsuite [On the Law Applicable To Legal Persons],
Kokusaiho Gaiko Zassi [The Journal of International Law and Diplomacy], Vol. 50, No. 5 (1950),
467 ; Hidehumi Egawa, Kokusai Shiho [Private International Law] (1957), p. 172 ; Iwataro Kubo,
Kokusai Shiho Gairon [General Theory of Private International Law] (1946), p. 131; Masao
Sanekata, Kokusai Shiho Gairon [General Theory of Private International Law](1942), p. 147.
Already, Atobe, supra note (17), p. 537.
25
See especially, Ryoichi Yamada, Kokusai Shiho jo ni okeru Hojin no Jinkaku [Personality of
Legal Persons in Private International Law], Kokusaiho Gaiko Zasshi [The Journal of International
Law and Diplomacy] , Vol. 50, No. 3 (1951), 272, p. 283.
26
Yamada, supra note (24), p. 470.
27
Sanekata, supra note (24), pp. 142-146; Egawa, supra note (24), pp. 165-166; Kubo, supra note
(24), pp. 129-130.
28
Ryoichi Yamada, Gaikoku Hojin [Foreign Legal Persons], in: Kotaro Tanaka ed. Kabushiki
Kaisha Ho Koza Dai 5 Kan [Series of Limited Liability Company (5)] (1959), 1787, p. 1832
[Japanese]; Sanekata, supra note (24), p. 151; Egawa, supra note (24), pp. 172 ff.
29
Yamada, supra note (28), pp. 1849-1852; Sanekata, supra note (24), p. 149; Egawa, supra note
(24), p. 178
30
Imperial Court, December 16, 1918, Minji Hanketsu-roku, Vol. 24, 2326 . See also, Tokyo District
Court, June 4, 1954, Hanrei Taimuzu [The Law Times Report], Vol. 40, p. 73.
31
See, Yutaka Orimo, Kokusai Shiho (Kakuron) [Private International Law (Specific
Matters)](1973), p. 51 .
32
Ibid.
International Company Law in Japan (Dai YOKOMIZO)
6
of incorporation. For example, some scholars seek to explain this doctrine from the
viewpoint of party autonomy.
33
Other scholars criticize such a choice-of-laws vision
and are attempting to reclaim the original legislative drafters recognition approach from
a new angle. They regard the problem as having to do with the recognition of the
decision or the public act of a foreign state to create a company, analogous to problem
of the recognition of foreign judgments.
34
The Supreme Court held in a 1975 decision
35
that a company was subject to New
York law because the defendant has been incorporated in accordance with the New
York law, and has established its head office in that state. This wording is not
sufficiently clear and is open to interpretation as supporting either the real seat doctrine
or the place of incorporation doctrine.
36
Although case law has not made its position clear, and although the rationale is
ambiguous, the place of incorporation doctrine is almost unanimously accepted in
Japan.
III. CHANGES UNDER NEW LAWS
The recent revision of Horei and the Commercial Code, as well as the enactments of
the Act on the General Rules of the Application of Laws and the Company Act have not
greatly changed the legal situation regarding companies in Japan, at least with regard to
conflict-of-laws situations.
A. The Act on the General Rules of the Application of Laws
First, no provision regarding the law applicable to matters relating to companies has
been introduced into the new Japanese private international law. This is because the
legislators found that the discussion on this matter had still been insufficient to justify
33
Hiroshi Sano, Kokusai Kigyo Katsudo to Ho [International Corporate Activities and Law], in:
Kokusai Ho Gakkai (Association of International Law) ed., Nihon to Kokusai Ho no 100 Nen 7
Kokusai Torihiki [100 Years of Japan and International Law 7 International Transaction] (2001), 167,
p. 175 . Already, Zenpachi Okamoto, Gaikoku Kaisha ni kansuru Shomondai Waga Kokuho Jo no
Chii- [Issues Regarding Foreign Companies Their Position in Our Law-], The Doshisha Hogaku
[the Doshisha law review], No. 15 (1952), 68, pp. 72ff.
34
Ishiguro, supra note (16), pp. 265-288 (as one of the possibilities); Masato Dogauchi, Pointo
Kokusai Shiho - Kakuron [The Points in Conflicts of Laws Specific Matters] (2000), pp. 175-205 ;
Yokomizo, supra note (7), pp. 1067-1071. In France, Pierre Mayer regards the registration for the
formation of a company as a public act. Pierre Mayer/Vincent Heuz, Droit international priv (8e
d., 2004), p. 720. However, the position of Japanese scholars is different from his in that they do not
distinguish public acts (actes public) from decisions (dcisions) .
35
Supreme Court, July 15, 1985, Minshu [Supreme Court Civil Reports], Vol. 29, No. 6, 1061.
36
See for example, Dogauchi, supra note (34), p. 188 (it is explained that the Supreme Court has
not made clear its position in this judgment). See also, Tokyo Distrocit Court, January 28, 1992,
Hanrei Taimuzu [The Law Times Report], vol. 811, p. 213.
International Company Law in Japan (Dai YOKOMIZO)
7
introducing a new rule.
37
Thus, the influence of the Act on the General Rules of the
Application of Laws is insignificant with regard to this matter. At most, it can perhaps be
said that the general attitude of this new law, which prefers party autonomy,
38
would be
more compatible with the place of incorporation doctrine.
B. The Company Act
Second, as a result of the Company Act, many details have changed with regard to the
rights and obligations of foreign companies.
39
The new article relating to
pseudo-foreign companies is worth mentioning.
Under the Company Act, Article 821 provides in paragraph 1 that a foreign company
that has its head office in Japan or whose main purpose is doing business in Japan shall
not undertake continuous transactions in Japan, and in paragraph 2 that a person who
breaches the preceding paragraph shall join with the foreign company to take
responsibility of the other party for the debt produced by the transactions concerned.
40
As mentioned above, regarding Article 482 of the pre-revised Commercial Code, it was
not clear whether a pseudo-foreign company should be incorporated once more in
accordance with Japanese law in order for its personality to be recognized in Japan. This
new provision has made clear this point and shows a friendlier attitude towards foreign
companies than its predecessor. The background to this change was the recognition that
the former Article 482 was an obstacle to the founding of foreign companies that could
adequately deal with modern financial practices such as capital mobilization.
41
While
some scholars claimed that the real seat doctrine determined the law applicable to
companies based on the former Article 482,
42
it seems impossible to bilateralize the
new provision and deduce from it a choice-of-law rule favorable to the real seat
doctrine.
37
The Explanatory Note on the Proposal of 22 March 2005, pp. 15-16 (available at
http://www.moj.go.jp/PUBLIC/MINJI57/refer02.pdf [Japanese]).
38
Aprovision was added which allows parties of a contract to change by agreement the applicable
law after the formation of that contract (Article 9). Such a change is now also permitted for the
applicable law to torts and unjust enrichments (Article 21 and 16).
39
See generally, Yasuhiro Okuda, The Legal Status of Foreign Companies in Japans New
Company Law, ZjapanR, Vol. 22 (2006), p. 115. I am thankful to him for kindly sending his article.
40
Translation by Okuda, id., p. 122.
41
Homusho Minjikyoku Sanjikanshitsu [Ministry of Justice, Civil Affairs Bureau, Secretary
Division], Kaisha Hosei no Gendaika ni kan suru Yoko Shian Hosoku Setsumei [Supplementary
Explanation on Outline for Modernization of Company Law System], October 22, 2003, p. 97
(available at http://www.moj.go.jp/PUBLIC/MINJI39/refer02.pdf).
42
Kawakami, supra note (12), pp. 47-48. On his view, see also, Ryoichi Yamada, Gaikoku Kaisha
ni kansuru Minpo 36 Jo Dai 2 Ko oyobi Shoho Dai 482 Jo no Kitei wo megutte [Regarding Article
36 Paragraph 2 of the Civil Code relating to Foreign Companies and Article 482 of the Commercial
Code], Shiho [Journal of Private Law], Vol. 18 (1957), 49, p. 52.
International Company Law in Japan (Dai YOKOMIZO)
8
Regarding this new provision, it has already been criticized for having an unclear
scope of application.
43
It is recognized that the term head office refers to a factual
location, the companys center of business.
44
However, maybe as a result of the fact that
more than thirty foreign securities companies doing business in Japan might be
considered as pseudo-foreign companies under this new provision,
45
a member of the
staff of the Ministry of Justice has expressed his personal view in a book that this
provision should be interpreted very narrowly.
46
For instance, according to his opinion,
this provision is not applicable to a foreign company that sells all its goods in Japan if it
has a subsidiary that is doing business abroad.
47
Also, it is not applicable if a foreign
companys directors resides abroad, or the board of directors meetings are held abroad.
48
Thus, the scope of this provision must be further examined in order to enhance
predictability for foreign companies doing business in Japan.
49
IV. RECENT ISSUES
Finally, some concrete situations which are currently being discussed in Japan must
be briefly mentioned.
50
First, there is the matter of the law applicable to determining the possibility of an
international merger between a Japanese company and a foreign company. By analogy
with international marriage, some scholars advocate choosing the applicable law in a
distributive way: it should be determined by the law of incorporation of each company
and whether that law allows the company to merge with a foreign one.
51
The problem
in this approach, as with international marriages, is that it is not clear which conditions
43
See for example, Okuda, supra note (39), pp. 123-125; Hiroyuki Kansaku, Kaishaho Sosoku,
Giji Gaikoku Kaisha [General Rules of Company Law and Pseudo Foreign Companies], Jurisuto
[Jurist], Vol. 1295, 134, pp. 144-145.
44
Hideki Kanda, Kaisha Ho [Company Law] (8
th
ed. 2006), p. 331.
45
Okuda, supra note (39), pp. 123-124.
46
S. Aizawa (ed.), Ichimon Itto Shin Kaisha Ho [Questions and Answers on the New Company Act]
(2005), pp. 241-242.
47
Ibid.
48
Ibid. Otherwise, it is claimed that this provision is not applicable to a foreign company which
sells all goods in Japan if the goods are mainly supplied from other foreign companies, to a foreign
company which buys all its goods from Japanese suppliers if the goods are also sold abroad or
exported to foreign customers.
49
Okuda, supra note (39), p. 126.
50
See, Fujita, supra note (4), pp. 49-59.
51
Yoshihisa Hayakawa, Gaikokukaisha-no Gappei Kabushiki-Kokkan wo meguru
Hoteki-Kiritsu(1): Mondai-no Shozai, Kokusai-Shiho karano Bunseki [Legal Issues of Mergers and
Stock-for stock Exchange with Foreign Companies (1): The Problems and Conflict of Laws
Analysis], Shoji-homu [Commercial Law Review], Vol. 1622, 28 (2002), pp. 32-33. cf. Mayer/Heuz,
supra note (34), p. 726.
International Company Law in Japan (Dai YOKOMIZO)
9
for merger should be regarded as so-called unilateral conditions or bilateral conditions.
52
Another view regards a merger as an inseparable process and argues that the applicable
law is linked to the merger itself.
53
Under this view, the applicable law should be
determined in a distributive or cumulative way according to each matter of merger such
as the possibility of international merger, validity of merger contract, merger procedure
and the effect of the merger.
54
Second, it is worth discussing the law applicable to corporate veil-piercing because of
some recent cases which have dealt with this issue.
55
Instead of claiming that the
applicable law is that of the company whose legal personality is disregarded, some
authors think that the choice-of-laws rules should vary according to the function for
which the veil-piercing doctrine is invoked.
56
For instance, if the parent companys
liability with regard to damages caused by its under-capitalized subsidiary is at issue,
the law of the company whose legal personality is pierced should be applied.
57
However, if the issue is the scope of the directors obligation, then the law of the
company to which the director belongs should be applied. For example, in cases where
the issue is whether a director of Japanese company A can engage in a competing
business through the company that is controlled by him as a majority shareholder, the
law of company A should be applied.
58
However, others criticize this approach by
saying that it is not necessary to consider a special rule for law applicable to corporate
veil-piercing and it is sufficient to characterize issues as contract or tort etc., even if
they could be regarded as corporate veil-piercing issues from the viewpoint of
municipal material laws.
59
52
cf. Mayer/Heuz, supra note (34), p. 726 (as an example of bilateral conditions, the requirement
of a merger contract is referred.).
53
Seiichi Ochiai, Kokusaiteki Gappei no Hoteki Taio[The Legal Treatment of International
Merger], Jurisuto [Jurist], No. 1175 (2000), 38; Akio tsuka, Kokusai teki Gappei no Hoteki
Kosatsu [Legal Analysis on International Merger], in: Tsukuba University, Yugo suru Horitsu Gaku
Jo [Fusing Jurisprudence (1)] (2006), 407, pp. 411-412.
54
Ochiai, supra note (53), pp. 38-39; Otsuka, supra note (53), pp. 424-427.
55
Tokyo District Court, Decision, March 30, 1998, The Hanrei-Jiho [Juridicial Reports], No. 1658,
117; Tokyo High Court, Judgment, January 30, 2002, The Hanrei-Jiho, No. 1797, 27. See The
Japanese Annual of International Law, No. 46 (2003), 183 for English Translation.
56
Kenjiro Egashira, Hojinkaku Hinin no Hori no Junkyo Ho[Applicable Law of Piercing the
Corporate Veil], in Yoshimitsu Endo and Tadayuki Shimizu eds., Kigyo Ketsugo Ho no Gendai to
Tenkai [Current Issues and Problems of the Law of Corporate Groups] (2002), 4.
57
Id., p. 10.
58
Id., p. 11. On this view, see also Fujita, supra note (4), pp. 51-52.
59
Kazunori Ishiguro, Kokusai Kigyo Ho jo no Shomondai [Issues on International Corporate Law]
in: Shojiho heno Teigen: Ochiai Seiichi Sensei Kanreki Kinen [Useful Proposals on Commercial
Law: In honor of Professor Seiichi Ochiai for 60th Birthday] (2004), 581, pp. 610-613 [Japanese];
Kazunori Ishiguro, Kokusai Shiho Dai 2 Han [Conflict of Laws Second Edition] (2007), pp. 294-295,
n. 465-c.
International Company Law in Japan (Dai YOKOMIZO)
10
Third, there is the matter of the existence of international mandatory rules
60
within
the Company Act. Such rules are deemed applicable, regardless of the choice of law, in
cases where the object of the regulation has a close connection with Japan. For instance,
it is presently under discussion whether Article 702 of the Company Act, which requires
companies issuing public bonds to appoint a bond administrator for the protection of
the interests of bondholders, is such a mandatory rule.
61
Many commentators regard
this provision as applicable regardless of the partys choice of law under the bond
contract.
62
They claim that it should be applied at least to the issuance of bonds in the
domestic market because the policy behind the regulation is the protection of domestic
investors.
63
All these concrete issues have appeared very recently. They must be further examined
in order to make the legal situation clear.
V. CONCLUSION
While the interest and literature regarding international company law are increasing
in Japan, there are still very few cases dealing with concrete facts. This context makes
the legal situation regarding companies uncertain and unpredictable.
One important issue which has not been openly discussed in Japan is that of
international jurisdiction over the internal matters of foreign companies. Are there some
concerns which should be within the exclusive jurisdiction of the courts of the place
where a foreign company has been incorporated, such as the validity of incorporation?
64
Also, how do we deal with veil-piercing in the context of international jurisdiction?
65
60
In Japanese, the term Zettai teki Kyoko Hoki [Absolute mandatory rules] is now commonly
used. See for example, Tokyo District Court, February 24, 2004, The Hanreijiho [Judicial Reports],
No. 1853, 38.
61
Fujita, supra note (4), pp. 46-48.
62
Kazunori Ishiguro, Shasai-kanri-kaisha no Kyosei-secchi to Yuro Shijo (1)[Mandatory
Appointment of Bond Administrator and Euro Market (1)], Boeki to Kanzei [The Tarrif and Trade],
Vol. 42, No. 12, (1994), 56, p. 64; Masato Dogauchi, Kigyo no Kokusaiteki Katsudo to Ho
[International Activity of the Enterprise and the Law], in Iwanami Koza Gendai no Ho [Iwanami
Series of Contemporary Law], Vol. 7, 143, p. 157; Kenjiro Egashira, Shoho Kitei no Kokusai teki
Tekiyo Kankei [International Application of the Provisions of the Commercial Code], Kokusai
Shiho Nenpo [Japanese Yearbook of International Private Law], Vol. 2 (2000), 136, p. 144. But see,
Koji Harada, Shasai wo meguru Shomondai to sono Junkyo ho [The Applicable Law to the Issues
Relating to Bonds], Shoji-homu [Commercial Law Review], Vol. 1356 (1994), p. 10.
63
Egashira, ibid; Dogaichi, ibid. As the more flexible view based on the close relationship between
the bond issurance and Japan, Kazunori Ishiguro, Shasai-kanri-kaisha no Kyosei-secchi to Yuro
Shijo (2)[Mandatory Appointment of Bond Administrator and Euro Market (2)], Boeki to Kanzei
[The Tarrif and Trade], Vol. 43, No. 1, (1995), 72, p. 79
64
See, Yokomizo, supra note (7), p. 1070.
65
See, Yokohama District Court, June 16, 2006, The Hanreijiho [Judicial Reports], Vol. 1941, 124.
Against the plaintiffs claim that a Japanese company fonctions as an office or business office of
International Company Law in Japan (Dai YOKOMIZO)
11
All of these problems will have to be examined in the future, along with the issue of the
law applicable to companies.
the defendant company, the court rejected it and declared lack of international jurisdiction, in saying
that the proof is not sufficient for establishing such a concrete circumstance (ex.complete control
of that Japanese company by the defendant company), although some directors of both companies
are the same and that Japanese company is described as a Branch or Subsidiary in the
defendents web site. It seems that the court dealed with the issue according to the lex fori, Japanese
International Civil Procedure Law.