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"Newsletter-2019"

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Newsletter Assertion of Monetary Claims (November 2019)

1. Introduction
Claim collection in Japan has become an increasingly challenging task in times of a difficult economical environment. Where claims cannot be successfully settled out-of-court, the sole remaining option is often the enforcement by court order against the debtor. This newsletter describes the most common court procedures for claim assertion in Japan to help foreign investors understand how to enforce their rights.
Japan offers standard legal instruments to assert and collect monetary claims, which, in essence, are similar to those under German law. Generally in Japan, settling a payment dispute out-of-court is more the rule than the exception. One reason for this is the fact that claim collection through court is a rather time and money consuming process and therefore is often avoided. In addition, the enforcement of a court approved titled fails in case of a lack of seizable assets of the debtor.
As a result, deciding whether to take legal action in order to pursue ones claim in Japan needs to be thoroughly analyzed in each case and is generally only recommendable if the monetary claim is substantial and sufficient assets of the debtor exist to satisfy the creditor.

2. Prior Out-of-Court Demand for Payment
Prior to initiating a court procedure of any nature, a creditor will usually request payment from the debtor by written notice as such reminder will be required in a later court procedure for evidentiary purposes. More importantly, a written demand in Japanese delivered by registered mail with certified content (naiyou shomei yuubin) often causes the debtor to enter into negotiations with the creditor to settle the claim, due to its quasi official character. This is particularly the case if the letter is sent by a Japanese attorney engaged by the creditor for such purpose. The ignoring of such formal demand letter by the creditor may also constitute a reason of urgency justifying provisional enforcement proceedings (see item 3 below). If negotiations fail, one the following court procedures should be considered.

3. Provisional Enforcement (Kari Sashiosae)
In case the debtor ignores payment requests, one potential option for the creditor is to file an application for provisional enforcement. This procedure is available without payment title (e.g. enforceable judgment, enforceable notary deed) and has the purpose to secure the assets for the realization of payment claims prior to the initiation of a civil action. The application, which needs to make the claim and the urgency of a provisional enforcement plausible, is usually prepared and filed by an attorney; together with the application, a security deposit determined by the court (usually approx. 15 ~ 30% of the asserted claim) needs to be paid to the court issuing the provisional enforcement order. Urgency is often admitted when a debtor has ignored a formal payment request by the creditor and/or the creditor’s attorney (item 2 above), or when there is a risk that the debtor tries to hide its assets or might become insolvent. The following assets of the debtor are often target of preliminary enforcement proceedings: (i) real estate, (ii) production machines or company cars, (iii) bank accounts, (iv) claims of the debtor against business partners; or (v) deposit for office lease paid by the debtor to the lessor. Sources of information to locate respective assets of the debtor are, e.g., the land registry, data bank reports of private information services like Shogo Research or Teikoku Data Bank, company websites, an attorney enquiry through the bar association (bengoshikai shokai, etc). In particular the enforcement into bank accounts, production machines or office lease deposits often encourage debtors to enter swift negotiations with their creditors.

 

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Newsletter Overtime (October 2019)

Overtime is one of the most sensitive topics in Japanese labor relations. Following the suicide of a young female employee of a major Japanese company in December 2015 due to working extensive hours, resulting in the resignation of the representative director of said company, the Japanese public’s perception of the social and legal consequences of overwork have changed and authorities are again on high alert. As a consequence, overtime related investigations by the competent authorities are expected to increase.

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Newsletter Labor Law Restructuring Human Resources (October 2019)

An increasingly competitive and cost oriented business environment often requires employers to review and restructure their human resources. Such process may include anything from the revision of salary schemes and compensation conditions to redundancy proceedings or even dismissals. This newsletter highlights some of the legal aspects to be observed when restructuring employment relations, in particular with regard to the adjustment of salary and working hours and the reduction of the company’s workforce.

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Newsletter Corporate Governance Structures (October 2019)

The Japanese Companies Act (JCA) offers several types of corporate governance schemes, which are mainly designed for public 􏰀large􏰂 corporations (i.e. companies with a paid-in share capital of JPY 500 million or more, or liabilities of JPY 20 billion or more), as such companies are obliged to implement a corporate governance structure prescribed under the law. However, also for private companies.

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Newsletter Compliance Power and Sexual Harrasment (September 2019)

Japanese working environments are traditionally characterized by authoritarian management styles with strict hierarchies. This opens the doorway to power games and harassment. This newsletter will explain the most frequent types of harassment and what companies can do to mitigate the risk of harassment cases occurring at their company as well as how to react in the event a harassment claim is made.

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Newsletter Data Protection Update (January 2019)

As of 23 January 2019, Japan and the EU have formally adopted their reciprocal adequacy decision on each other’s data protection framework. The mutual recognition creates the world’s largest area of safe data flow and further business opportunities between Japan and the EU. We would like to highlight some aspects of the reciprocal adequacy decision which companies should be aware of as set forth below.

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Newsletter Labor Law Work-Style Reform (January 2019)

After a number of prominent fatalities that have been linked to excessive working hours at some of Japan’s largest corporations in 2015 / 2016 and increasing public pressure, the government initiated a so-called “Work-Style Reform”. The reform aims at reducing excessive overtime hours of employees in order to prevent stress-induced illnesses and nourish a more balanced work-life culture. At the same time, the government strives to bring more flexibility to the labor market and increase productivity as Japan is facing an unprecedented socio-economic challenge with its aging population and shrinking labor force.

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