2025.10.20

2024(Kyo)17

Minshu Vol. 79, No. 7

(Civil Case) Decision concerning whether an incorporated political party, etc. referred to in Article 7-2, paragraph (1) of the Act on Granting of Juridical Personality to Political Party Receiving Political Party Grants qualifies to receive an order to commence bankruptcy proceedings

Case of appeal with permission against the ruling to dismiss the appeal against the order commencing bankruptcy proceedings

Decision of the First Petty Bench, dismissed

Tokyo High Court, Decision of May 30, 2024

An incorporated political party, etc. referred to in Article 7-2, paragraph (1) of the Act on Granting of Juridical Personality to Political Party Receiving Political Party Grants qualifies to receive an order to commence bankruptcy proceedings even if it has not been dissolved pursuant to the provisions of Article 10, paragraph (1) or (2) of the same Act.

Article 10, paragraphs (1) and (2), and Article 10-9 of the Act on Granting of Juridical Personality to Political Party Receiving Political Party Grants; Articles 13 and 35 of the Bankruptcy Act; Article 28 of the Code of Civil Procedure; Article 4, paragraph (1) and Article 33, paragraph (2) of the Political Party Subsidies Act

The appeal is dismissed. The costs for the appeal shall be borne by the appellant.

I. Concerning Reasons I and II for appeal stated by the counsel for appeal, TOYOTA Kenji 1. This is a case in which the appellee, a creditor of the appellant, filed a petition to commence bankruptcy proceedings regarding the appellant. The appellant is an incorporated political party, etc. as referred to in Article 7-2, paragraph (1) of the Act on Granting of Juridical Personality to Political Party Receiving Political Party Grants (referred to below as the "Act"), and it is not one that has been dissolved pursuant to the provisions of Article 10, paragraph (1) or (2) of the Act. The court of prior instance determined that the appellant qualifies to receive an order to commence bankruptcy proceedings and therefore ruled that the appellee's petition should be granted. 2. The appeal counsel argues as follows. If an incorporated political party, etc. is subject to bankruptcy proceedings even though it has not been dissolved, it would lose the right to manage and dispose of its property, including political party grants, which would be contrary to the purpose and objective of Article 4, paragraph (1) of the Political Party Subsidies Act that requires political parties' freedom of political activities be respected, and moreover, if a distribution to be made in bankruptcy proceedings is considered to be excluded from the scope of "disbursements from political party grants" referred to in Article 14, paragraph (1) of the same Act, an incorporated political party, etc. subject to bankruptcy proceedings could be given an order by the Minister for Internal Affairs and Communications to return political party grants in an amount equivalent to the distribution (Article 33, paragraph (2), item (i) of the same Act). In consideration of these points, it should be interpreted that an incorporated political party, etc. is not subject to bankruptcy proceedings unless it is dissolved, and the provisions of Article 10, paragraph (2) of the Act, which do not list an order to commence bankruptcy proceedings as a ground for dissolution of an incorporated political party, etc., should also be understood in line with such interpretation. The determination by the court of prior instance that is contrary to this contains an error in the interpretation and application of the relevant laws and regulations. 3. Since Article 13 of the Bankruptcy Act applies the provisions of Article 28 of the Code of Civil Procedure mutatis mutandis to bankruptcy proceedings, it should be said that in principle, a person that has capacity to hold rights under the Civil Code qualifies to receive an order to commence bankruptcy proceedings. Also, in light of the fact that the Act includes provisions addressing the case where an incorporated political party, etc. that has been dissolved receives an order to commence bankruptcy proceedings (Article 10-9), an incorporated political party, etc. cannot be regarded as a corporation that by nature can never be subject to bankruptcy proceedings. Even where an incorporated political party, etc. is not yet dissolved, if there is a fact that constitutes any of the grounds for commencement of bankruptcy proceedings, it would be necessary to make that incorporated political party, etc. subject to bankruptcy proceedings in the same manner as in the case of an incorporated political party, etc. that has been dissolved. It is reasonable to understand the fact that Article 10, paragraph (2) of the Act does not state an order to commence bankruptcy proceedings as a ground for dissolution simply means that an incorporated political party, etc. would not be dissolved due to the commencement of bankruptcy proceedings and would not lose its legal personality even after bankruptcy proceedings are closed (see Article 35 of the Bankruptcy Act). The purpose and objective of Article 4, paragraph (1) of the Political Party Subsidies Act are to ensure that the State would not hinder political parties' freedom of political activities when providing them with political party grants. If an incorporated political party, etc. that has not been dissolved receives an order to commence bankruptcy proceedings and loses the right to manage and dispose of its property, including political party grants, such property would be the financial resources, etc. to be used for making distributions to the bankruptcy claims that have arisen in relation to free political activities of that political party, etc., which is not contrary to the purpose and objective of that paragraph. In addition, even if an incorporated political party, etc. is possibly given an order by the Minister for Internal Affairs and Communications to return political party grants pursuant to Article 33, paragraph (2) of the same Act, such possibility cannot be the reason to consider that an incorporated political party, etc. can never be subject to bankruptcy proceedings unless it is dissolved. There is no other legal basis to consider that an incorporated political party, etc. that has not been dissolved does not qualify to receive an order to commence bankruptcy proceedings. According to the above, it is reasonable to interpret that an incorporated political party, etc. qualifies to receive an order to commence bankruptcy proceedings even if it has not been dissolved pursuant to the provisions of Article 10, paragraph (1) or (2) of the Act. 4. The determination by the court of prior instance to the same effect as above is justified and therefore can be upheld. The counsel's arguments cannot be accepted. II. Concerning other reasons for appeal The determination by the court of prior instance regarding the points argued by the counsel is justified and therefore can be upheld. The counsel's arguments cannot be accepted. For the reasons stated above, the Court unanimously decides as set forth in the main text of the decision.

Justice SAKAI Toru Justice YASUNAMI Ryosuke Justice OKA Masaaki Justice MIYAGAWA Mitsuko Justice NAKAMURA Makoto