If a Taiwanese person or Taiwanese corporation located in Taiwan is the defendant (“Taiwanese Defendant”) when attempting to file proceedings in Japan, not only must they consider whether or not the case can be won, but many other issues as well.
- Whether or not there is jurisdiction in Japan
It is necessary to consider whether the courts of Japan have jurisdiction. If the courts of Japan do not have jurisdiction, the proceeding will be rejected even if it is filed. If there is a provision on jurisdiction in the contract and it stipulates a court in Japan, it can be determined that the courts of Japan have jurisdiction (Article 3-7 of the Code of Civil Procedure). If there is no contract, or there are no provisions on jurisdiction in the contract, consider whether the courts of Japan have jurisdiction in accordance with the provisions of the Code of Civil Procedure regarding international jurisdiction. For example, in the case of a monetary claim, jurisdiction is recognized if the assets subject to foreclosure are in Japan (Article 3-3 (iii) of the Code of Civil Procedure).
- Method of service
Under Japanese law, service is the exercise of jurisdiction, and in order to serve in a foreign country, there must be a treaty, mutual assistance agreement, or other agreement with the foreign country as the basis thereof. However, there are no diplomatic relations with Taiwan, and because of this, there is no choice but to use service by publication (Article 110 (1) (iii) of the Code of Civil Procedure) in Japan. Usually, service by publication is regarded as a last resort when other methods cannot be used, and necessitates circumstances such as when delivery becomes impossible even if ordinary delivery is made because the whereabouts are unknown, and the destination cannot be determined even by investigation. However, in the case of the Taiwanese Defendant, service by publication is permitted if one submits a petition therefor stating that “the defendant’s address is in the Republic of China (Taiwan), and because there are no diplomatic relations between such country and Japan and it is not possible to carry out mutual legal assistance, Article 110 (1) (iii) of the Code of Civil Procedure applies” together with a complaint. The Taiwanese Defendant will be notified by the court that service by publication was made (the second sentence of Article 46 (2) of the Rules of Civil Procedure). Notifications are, in practice, sent by regular mail.
The fact that there is no choice but to use service by publication is related to the propriety of compulsory execution as follows.
- Propriety of compulsory execution
When filing a proceeding, especially in proceedings for monetary claims, it is necessary to consider not only that it does not end with the acquisition of a decision, but also the compulsory execution after the decision is acquired. In the case of a monetary claim, if the Taiwanese Defendant’s assets are in Japan, e.g. if the Taiwanese Defendant’s Japanese bank account is discovered, or if the Taiwanese Defendant owns real estate in Japan, there is no problem if the complaint is served by service by publication since the Japanese decision can be enforced in Japan.
The problem is when the Taiwanese Defendant’s assets are not in Japan, but abroad (Taiwan). A Japanese decision cannot be enforced as it is in Taiwan, and it is necessary to go through the procedures for approved enforcement at the Taiwanese courts. Article 402 (1) (ii) of the Taiwan Code of Civil Procedure states that, as a requirement for the approval of a foreign decision, the losing defendant is supposed to have filed a countersuit, or the call to start the proceedings was supposed to have been served legally in the foreign country at a reasonable time, or served by mutual legal assistance with Taiwan (第 402 條 外國法院之確定判決，有下列各款情形之一者，不認其效力： 二、敗訴之被告未應訴者。但開始訴訟之通知或命令已於相當時期在該國合法送達，或依中華民國法律上之協助送達者，不在此限。 [A final and binding judgment rendered by a foreign court shall be recognized, except in case of any of the following circumstances: 2. Where a default judgment is rendered against the losing defendant, except in the case where the notice or summons of the initiation of action had been legally served in a reasonable time in the foreign country or had been served through judicial assistance provided under the R.O.C. laws;]).
Additionally, with regards to Article 402 (1) (ii) of the Taiwan Code of Civil Procedure, the Supreme Court of Taiwan ruled that since service means to exercise the judicial sovereignty of the country when a court in a foreign country serves a notice or order to a defendant in Taiwan for the start of proceedings, it should not be served ex officio by the foreign court, nor should the plaintiff’s attorney serve it by mail or direct delivery, but it should be served by cooperative service through a Taiwanese court pursuant to the provisions of Taiwan’s Cooperative Law for Entrustment to Foreign Courts and Procedures for Handling Judicial Mutual Aid (Supreme Court Decision on January 13, 2011; Minguo 100 (2011) No. 42). Given this decision, if a Japanese court serves a complaint to the Taiwanese Defendant by service by publication, and the Taiwanese Defendant loses the case without filing a countersuit, it is likely that one would be unable to obtain approval for the Japanese decision at a Taiwanese court, and compulsory execution in Taiwan would also be difficult.
For reference, if the defendant has filed a countersuit in the Japanese proceedings, there are precedents in which the Japanese decision was approved in Taiwan (Taiwanese High Court Decision on June 13, 2006; Minguo 93 (2004) No. 290. The original decision, Banqiao District Court of Taiwan Minguo 92 No. 212, was introduced in International Commercial Law Vol. 33, No. 9 (2005)).
As a result of considering the points to be considered in 1 to 3 above, it is necessary to consider filing the proceeding in Taiwan if choosing to file the proceeding in Japan is not reasonable.