2014.04.24

2011 (Ju) 1781

Minshu Vol. 68, No. 4

Judgment concerning the criteria for determining whether or not a foreign country has indirect jurisdiction, in the meaning provided for in Article 118, item (i) of the Code of Civil Procedure, over an action other than an action concerning personal status

Case to seek an execution judgment

Judgment of the First Petty Bench, quashed and remanded

Tokyo High Court, Judgment of May 11, 2011

1. Whether or not a foreign country has indirect jurisdiction, in the meaning provided for in Article 118, item (i) of the Code of Civil Procedure, over an action other than an action concerning personal status, should be determined in light of the rule of reason, while basically complying with the provisions on international jurisdiction under the Code of Civil Procedure of Japan and considering whether or not it is appropriate for Japan to recognize a judgment rendered by the foreign court, in the context of the specific circumstances of the case.

2. An "action relating to a tort" referred to in Article 3-3, item (viii) of the Code of Civil Procedure includes an action filed by a person whose right or interest has been violated or is likely to be violated by another person's illegal act, to seek an injunction to enjoin such act.

3. In an action filed by a person whose right or interest has been violated or is likely to be violated by another person's illegal act to seek an injunction to enjoin such act, the "place where the tort took place" referred to in Article 3-3, item (viii) of the Code of Civil Procedure includes the place where an illegal act is likely to be committed or the place where a person's right or interest is likely to be violated.

4. In the process of determining whether or not a foreign country has indirect jurisdiction, in the meaning provided for in Article 118, item (i) of the Code of Civil Procedure, with regard to a judgment rendered by the foreign court finding that a person's right or interest has been violated or is likely to be violated by another person's illegal act and therefore issuing an injunction to enjoin such act, in order to demonstrate in such an action that the "place where the tort took place" referred to in Article 3-3, item (viii) of the Code of Civil Procedure is located in the country to which said foreign court belongs, it is sufficient to prove an objective fact that an act violating the plaintiff's right or interest is likely to be committed by the defendant in said country or that the plaintiff's right or interest is likely to be violated in said country.

(Concerning 1 and 4) Article 118, item (i) of the Code of Civil Procedure, Article 22, item (vi) and Article 24 of the Civil Execution Act; (Concerning 2 to 4) Article 3-3, item (viii) of the Code of Civil Procedure

Code of Civil Procedure
(Effect of Final and Binding Judgment Rendered by Foreign Court)
Article 118　
A final and binding judgment rendered by a foreign court shall be effective only where it meets all of the following requirements:
(i)　The jurisdiction of the foreign court is recognized under laws or regulations or conventions or treaties.

Civil Execution Act
(Title of Obligation)
Article 22　
Compulsory execution shall be carried out based on any of the following (hereinafter referred to as the "title of obligation"):
(vi)　A judgment of a foreign court for which an execution judgment has become final and binding

(Execution Judgment for a Judgment of a Foreign Court)
Article 24　
(1)　An action seeking an execution judgment for a judgment of a foreign court shall be under the jurisdiction of the district court having jurisdiction over the location of the general venue of the obligor, and when there is no such general venue, it shall be under the jurisdiction of the district court having jurisdiction over the location of the subject matter of the claim or the seizable property of the obligor.
(2)　An execution judgment shall be made without investigating whether or not the judicial decision is appropriate.
(3)　The action set forth in paragraph (1) shall be dismissed without prejudice when it is not proved that the judgment of a foreign court has become final and binding or when such judgment fails to satisfy the requirements listed in the items of Article 118 of the Code of Civil Procedure.
(4)　An execution judgment shall declare that compulsory execution based on the judgment by a foreign court shall be permitted.

Code of Civil Procedure
(Rules of the Supreme Court)
(Jurisdiction over Action Relating to Contractual Obligation, etc.)
Article 3-3　
Actions listed in the following items may be filed with a court of Japan in the cases specified in the respective items:
(viii)　An action relating to a tort:　Where the place where the tort took place is located in Japan (excluding the case where the result of a wrongful act committed in a foreign country occurred in Japan, and the occurrence of such result in Japan was ordinarily unforeseeable).

The judgment in prior instance is quashed.
The case is remanded to the Tokyo High Court.

Concerning Reason IV for petition for acceptance of final appeal argued by the appeal counsel, ISHIKAWA Tadashi, et al.
1. This is an action filed by the appellant of final appeal to seek an execution judgment under Article 24 of the Civil Execution Act with regard to a judgment rendered by a court in the United States ordering the payment of damages for the unauthorized disclosure and use of a trade secret (as defined under the law of the State of California, the United States) and enjoining such act, except for the part ordering punitive damages.
In order to obtain an execution judgment, it is necessary to satisfy the requirements provided for in the items of Article 118 of the Code of Civil Procedure. The requirement set forth in item (i) of said Article, "the jurisdiction of the foreign court is recognized under laws or regulations or conventions or treaties," means that the country to which said foreign court belongs (hereinafter referred to as the "country of the judgment") is positively recognized as having international jurisdiction over the case in light of the principles under the international code of civil procedure of Japan (hereinafter international jurisdiction in this meaning shall be referred to as "indirect jurisdiction"). The appellees contend that the United States does not have indirect jurisdiction over this case.

2. The outline of the facts determined by the court of prior instance is as follows.
(1) The Civil Code of the State of California defines the term "trade secret" as meaning information that derives independent economic value from not being generally known to the public and that is the subject of efforts that are reasonable under the circumstances to maintain its secrecy (Section 3426.1(d) of said Code), and also defines the unauthorized acquisition, disclosure or use of a trade secret as "misappropriation" ((b) of said section), and based on the definitions of these terms, it provides that [i] damages may be recovered (Section 3426.3 of said Code) and [ii] actual or threatened misappropriation may be enjoined (Section 3426.2 (a) of said Code) (hereinafter these provisions shall be referred to as the "Provisions").
(2) The appellant is a corporation existing under the law of the State of California. It had the technique and information relating to treatment of eyebrows called "X Technical Service" (hereinafter referred to as the "Technique, etc."). The Technique, etc. falls within the definition of trade secret in accordance with the Provisions.
(3) In December 2003, the appellant entered into an agreement with Company P, a Japanese corporation (stock company), under which the appellant would grant Company P an exclusive license, etc. to use the Technique, etc. in Japan and would receive payment for this. According to this agreement, in April 2004, the appellant disclosed the Technique, etc. to Appellees Y1 and Y2, who were employees of Company P, at the appellant's establishment in the State of California.
Around October 2004 and thereafter, Company P opened eyebrow treatment salons in Japan one after another.
(4) In February 2006, Appellees Y1 and Y2 established Appellee Company Y3 (hereinafter referred to as the "Appellee Company") separately from Company P, and then Appellee Y1 left Company P in April and Appellee Y2 left the same in May of the same year. The Appellee Company opened eyebrow treatment salons in Japan and also opened a school to teach the eyebrow treatment technique. Appellees Y1 and Y2 used the eyebrow treatment technique as the directors of the Appellee Company.
Appellees Y4, Y5, and Y6 were employees of Company P. They had left Company P by around December 2006, and then were employed by the Appellee Company and used the eyebrow treatment technique in Japan.
(5) In May 2007, the appellant sued the appellees in the United States District Court for the Central District of California to seek damages for their unauthorized disclosure and use of the Technique, etc. and an injunction to enjoin such act under the Provisions.
In October 2008, said court rendered a judgment enjoining the appellees from committing the unauthorized disclosure and use of the Technique, etc. in Japan and the United States, in addition to ordering the payment of damages for such act (hereinafter referred to as the "Judgment in the United States").

3. The court of prior instance dismissed the appellant's claim, holding as follows.
Since the place where the appellees committed the alleged act is located in Japan, the appellant must prove that the damage it sustained from their act was caused in the United States. However, as the appellant has not proved this fact, there is no room to recognize indirect jurisdiction in respect of either of the parts of the Judgment in the United States, that is, the part ordering the payment of damages and the part enjoining the alleged act.

4. However, we cannot affirm the holding of the court of prior instance mentioned above, on the following grounds.
(1) It is appropriate to construe that whether or not a foreign country has indirect jurisdiction over an action other than an action concerning personal status should be determined in light of the rule of reason, while basically complying with the provisions on international jurisdiction under the Code of Civil Procedure of Japan and considering whether or not it is appropriate for Japan to recognize a judgment rendered by the foreign court, in the context of the specific circumstances of the case.
(2) First, looking at the provisions on international jurisdiction under the Code of Civil Procedure of Japan, Article 3-3, item (viii) of said Code provides that international jurisdiction over an "action relating to a tort" shall be determined on the basis of the "place where the tort took place."
It is construed that an "action relating to a tort" referred to in Article 3-3, item (viii) of the Code of Civil Procedure, as in the case of an "action relating to a tort" referred to in Article 5, item (ix) of said Code, is not limited to an action relating to a tort that is provided for in the Civil Code but it includes an action filed by a person whose right or interest has been violated or is likely to be violated by another person's illegal act to seek an injunction to enjoin such act (see 2003 (Kyo) No. 44, decision of the First Petty Bench of the Supreme Court of April 8, 2004, Minshu Vol. 58, No. 4, at 825). Since such an action seeking an injunction may be filed by a person whose right or interest has not been violated but is only likely to be violated by another person's illegal act, it is appropriate to construe that the "place where the tort took place" referred to in Article 3-3, item (viii) of the Code of Civil Procedure includes the place where an illegal act is likely to be committed or the place where a person's right or interest is likely to be violated.
(3) In order to recognize the international jurisdiction of Japan based on the provisions of Article 3-3, item (viii) of the Code of Civil Procedure, in the case of an action to seek damages for a tort, it is sufficient, in principle, to prove an objective fact that damage was caused to the plaintiff's right or interest due to an act committed by the defendant in Japan or that damage was caused to the plaintiff's right or interest in Japan due to an act committed by the defendant (see 2000 (O) No. 929, 2000 (Ju) No. 780, judgment of the Second Petty Bench of the Supreme Court of June 8, 2001, Minshu Vol. 55, No. 4, at 727). Also in order to recognize indirect jurisdiction of the country of the judgment, as long as the provisions of Article 3-3, item (viii) of the Code of Civil Procedure shall be followed, it is inappropriate to apply a different rule in terms of the matters that need to be proved.
Assuming so, in the case of an action filed by a person whose right or interest has been violated or is likely to be violated by another person's illegal act, to seek an injunction to enjoin such act, the fact that said person actually sustained damage is not necessarily required as a condition for giving rise to a claim for an injunction, and therefore in order to demonstrate in such an action that the "place where the tort took place" referred to in Article 3-3, item (viii) of the Code of Civil Procedure is located in the country of the judgment, it is sufficient to prove an objective fact that an act violating the plaintiff's right or interest is likely be committed by the defendant in the country of the judgment or that the plaintiff's right or interest is likely to be violated in the country of the judgment, even if the defendant has not actually committed in the country of the judgment an act violating the plaintiff's right or interest or the plaintiff's right or interest has not actually been violated in the country of the judgment.
(4) This reasoning can be applied in this case as follows. The Provisions can be understood as also being applicable to an action filed by a person whose right or interest has been violated or is likely to be violated by another person's illegal act to seek an injunction to enjoin such act. Taking into account the fact that the Judgment in the United States enjoined the appellees from committing the wrongful act not only in Japan but also in the United States, there may be room in this case to recognize indirect jurisdiction in respect of the part of the Judgment in the United States which enjoined the wrongful act, in accordance with Article 3-3, item (viii) of the Code of Civil Procedure and in light of the rule of reason, if the appellant proves an objective fact that an act violating the appellant's right or interest is likely to be committed by the appellees in the United States or that the appellant's right or interest is likely to be violated in the United States. Furthermore, in that case, there may also be room to recognize indirect jurisdiction in respect of the part of the Judgment in the United States which ordered the payment of damages, in accordance with Article 3-6 of the Code of Civil Procedure and in light of the rule of reason.

5. Contrary to the above, the court of prior instance denied indirect jurisdiction, without examining matters such as whether or not there is a likelihood that any act violating the appellant's right or interest would be committed by the appellees in the United States, and such holding of the court of prior instance contains violation of laws and regulations that apparently affects the judgment. The appeal counsel's arguments are well-grounded in that they allege this point, and the judgment in prior instance should inevitably be quashed. Since no proof has been submitted yet with regard to an objective fact concerning the abovementioned point, we remand the case to the court of prior instance to have it further examine this point.

Therefore, the judgment has been rendered in the form of the main text by the unanimous consent of the Justices.

Justice SAKURAI Ryuko
Justice KANETSUKI Seishi
Justice YOKOTA Tomoyuki
Justice SHIRAKI Yu
Justice YAMAURA Yoshiki