Foreign companies that maintain their APAC headquarters in Singapore frequently engage in commercial transactions with Japanese counterparties. As a result, disputes arising from such cross-border transactions are not uncommon.
As with any corporate dispute, the first step is usually to seek an amicable resolution through negotiation. In practice, however, negotiations do not always lead to a satisfactory outcome. Where a Japanese business partner refuses to accept any reasonable proposal, a foreign company may need to consider taking formal, enforceable legal action against the Japanese entity.
This article outlines key legal considerations for foreign companies—particularly those headquartered in Singapore—when pursuing disputes against Japanese companies.
In substance, there is little difference across jurisdictions in the general approach to corporate disputes. Parties are expected to attempt amicable negotiations first, and if those efforts fail, to consider enforceable legal measures.
That said, cross-border transactions introduce additional layers of complexity. A foreign investment company must carefully assess issues such as jurisdiction, the appropriate type of legal action, the optimal timing for initiating proceedings, the correct identification of the defendant entity, and the governing law applicable to the dispute.
During this assessment process, various practical and legal questions inevitably arise. The following sections address some of the most common concerns faced by foreign companies contemplating litigation in Japan.
From a creditor’s perspective, litigation in Japan can be highly effective, particularly for claims involving monetary recovery. This is largely because most Japanese companies hold their primary assets within Japan.
When seeking an enforceable remedy, it is essential to initiate proceedings in a jurisdiction where the defendant’s assets are located. By filing a lawsuit in Japan against a Japanese company, the plaintiff places the defendant’s domestic assets at direct legal risk. As a result, Japanese companies generally treat domestic litigation with a high degree of seriousness.
A common concern is whether a foreign company is legally entitled to bring a lawsuit in Japan. The answer is unequivocally yes.
A foreign company has full standing to act as a plaintiff in Japanese court proceedings. It is not necessary for the foreign company to establish a subsidiary or branch office in Japan in order to file a lawsuit. The foreign legal entity itself may initiate litigation directly against a Japanese company.
Under Article 74 of the Japanese Courts Act, all court proceedings must be conducted in the Japanese language. Accordingly, complaints, briefs, and evidentiary submissions must be prepared in Japanese.
Where a foreign company relies on English-language documents, it is generally neither practical nor necessary to translate all materials in full. Instead, parties typically identify the legally relevant portions of key documents and submit certified Japanese translations of those excerpts. This process requires both legal judgment and linguistic precision, as inaccurate or imprecise translations may undermine the effectiveness of the evidence.
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Once a complaint is filed, the court clerk reviews the submission and requests any necessary corrections. After the review is completed, the complaint is formally served on the defendant company. Upon service, the litigation officially commences, and the first court date is scheduled.
The defendant will typically retain counsel and submit a written answer, followed by a series of written submissions exchanged between the parties. This phase of written pleadings generally continues for approximately six months to eighteen months, depending on the complexity of the case.
After the parties have completed their submissions, the court often attempts to facilitate a settlement. If a settlement cannot be reached, the court will proceed to render a judgment.
In recent years, Japanese courts have increasingly adopted online hearings for corporate litigation. In many cases, court sessions are conducted via remote conferencing, and attorneys are able to submit evidence electronically through the court’s online systems.
In contractual disputes, the first step is to review the governing law clause in the relevant agreement. If the contract specifies Japanese law, then Japanese law will apply to the dispute. While parties may agree to change the governing law by mutual consent, doing so involves strategic considerations and should be carefully evaluated in light of the overall litigation strategy.
It is entirely feasible for a general counsel based in Singapore to manage Japanese litigation remotely. Attendance at Japanese court hearings by the foreign company is not required, as Japanese counsel will handle all court appearances.
However, it is strongly advisable to engage bilingual Japanese counsel with experience in cross-border matters. Legal translation requires specialized expertise, particularly when dealing with technical legal concepts. Where Japanese counsel also holds foreign legal qualifications, communication with overseas legal teams is often more efficient and precise.
From a practical standpoint, the minimal time difference between Japan and Singapore—only one hour—allows for real-time communication during standard business hours, making cross-border case management significantly more efficient.
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Shingo Hattori
Founder & Managing Partner, Hattori Law +81 3 6447 5586
Daini Tokyo Bar Association:
Disclaimer: This article provides general information as of the time of drafting only and does not constitute legal advice. Specific advice requires review of transaction documents and facts.
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