Japanese Tort Law: Choice of Law Rules and Double-Actionability
Japanese tort law follows specific choice of law rules, determining the applicable law based on factors such as the place of injury, product liability, and defamation. The double-actionability rule ensures that the harmful act is also unlawful under Japanese law and that remedies are available. This rule has raised debates regarding its effectiveness and limitations, especially in cases involving public policy considerations and differing legal standards. Recommendations have been made to review and potentially reform the double-actionability rule in light of global conflict-of-laws practices.
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Tort: A Japanese Perspective Koji Takahashi (Doshisha Law School)
Source of Japans choice-of-law rules for tort ho no tekiyo ni kansuru tsusoku ho Literally, Act Concerning the General Rules for the Application of Laws in force since 2007 superseding the previous Act: horei ( Act on the Application of Laws )
General and special rules Art. 17 (general): the lex loci damni (the law of the place of injury). However, if the occurrence of the injury in that place would not normally be predictable, the lex loci actus (law of the place of the harmful act). Art. 18 (product liability): In general, the law of the place where the victim received delivery of the product. Art. 19 (defamation): the law of the victim s habitual residence.
The general and special rules are subject to: Rule of displacement (Art. 20): in favor of the law of the place clearly more closely connected. Rule permitting the change of governing law by agreement (Art. 21) Double-actionability rule (Art. 22): The harmful act must also be unlawful under Japanese law (para. 1). The remedies must also be available under Japanese law (para. 2).
Double-actionability rule - worth retaining?- A case under the previous Act: the defendant s act in Japan was subject to the extra-territorial reach of the US patent Act. The Supreme Court held the act would not be actionable under Japanese law on the ground that the Japanese patent law had no extra- territorial effect (judgment on 26 September 2002). Allays fears of some unforeseen adverse effects in e.g. product liability and defamation.
Double-actionability rule - objections - Gives special treatment to Japanese law. Limits relief to victims. Should be sufficient to rely on public policy (Art. 42) Putative defendants may disagree: e.g. In defamation, under Japanese law, the defendant is exonerated if the defamatory remarks are made on matters of public interest, solely for the benefit of the public and in the reasonable belief of the truth of the alleged facts (Supreme Court judgment on 23 June 1966).
Double-actionability rule Incidental Resolutions of the Judicial Affairs Committees of both Houses of Parliament: Calling upon the government to keep monitoring the operation of the double-actionability rule and review its necessity by taking into account, inter alia, the desirability of harmonisation with the conflict-of-laws rules of other countries. Reforms in South Korea (2001) and China (2010) abolishing the double-actionability rule.
Industrial espionage - social background - Japanese companies technological edge over Asian competitors has been eroded. Some of them have been forced to lay off their employees, who take the Japanese companies trade secret with them to foreign competitors with whom they find new employment. Companies of other Asian countries are also anxious to prevent the leak of technology to their foreign competitors.
Industrial espionage Nippon Steel v. Posco (pending before the Tokyo District Court) Nippon Steel s allegations: Posco improperly acquired Nippon Steel s trade secret in Japan. Posco used it to manufacture steel sheets in Korea. Posco sold the some of them in Korea and exported the remainders to China and India. Nippon Steel is claiming damages under the Japanese Unfair Competition Prevention Act. Posco: The case is governed by the laws of Korea, China and India, respectively.
Industrial espionage - under the lex loci actus rule - Which of the harmful acts does it point to? acquisition of trade secret (Posco case: in Japan) use (Posco case: in Korea) disclosure The lex loci actus rule would not produce a clear answer.
Industrial espionage - under the lex loci damni rule - If the interest to be protected is the trade secret itself, injury would occur at the place of the act (acquisition, use, or disclosure) . If it is the business interest of the claimant, injury would usually occur at the market place of the products embodying the trade secret. Posco case: Korea, China, and India (Mosaic principle). cf. Japan, from which Nippon Steel would have exported (a place of ancillary damage).
Industrial espionage Neither the lex loci actus rule nor the lex loci damni rule produce a clear answer. Swiss Private International Law: the law of the seat of the injured company (Article 136(2)). But it is a place of ancillary damage.
Quantification of damages Subject to the governing law of tort. cf. lex fori. Where it is Japanese law, the lost earnings of a foreigner injured in Japan is assessed by taking into account the likely duration of his employment in Japan as well as the country to which he is likely to move thereafter (e.g. Supreme Court judgment on 28 January 1997).
Quantification of damages Where the governing law is a foreign law, it may be refused to be applied if the result of its application would be contrary to the public policy of Japan (Art. 42), e.g. where the amount of damages would be unduly small (e.g. Fukuoka High Court judgment on 10 February 2009, refusing to apply the law of Argentina and instead applying Japanese law).
