Internationales Gesellschaftsrecht in Japan

Abstract

Two periods of legislative upheaval shed light on the formation and development of the Japanese international corporate law, its fundamental ideas and its relations to other legal matters: During the Meiji Restoration, the Japanese jurisprudence dealt for the first time with the question how foreign companies should be handled legally. More than a century later, these problems were picked up again under completely different conditions during the comprehensive reforms of the Heisei era. On the one hand, the Japanese legal canon had become more differentiated and substantiated methodically and had been transferred to a different political environment after the Second World War. On the other hand, Japan was not anymore a threatened outsider, but rather decided as one of the biggest economic players about how to position herself on the global market.

During the codification projects of the Meiji Restoration, the problem of how to deal with foreign juridical persons was discussed mainly when making the Civil Code. The reason was that the problem was mainly seen as one of admission of foreign legal persons. The foundation theory served as a method to distinguish between foreign and domestic companies when deciding about their admission. This was a question of substantial law, not one of conflict of laws. Nobushige Hozumi, who was in charge of the conflict of laws provisions, did not deal with this problem when drafting the Hōrei. Rather, a provision on admission of foreign juridical persons was inserted into the Civil Code under the direction of Hozumi, Masa’akira Tomii and Kenjirō Ume. The international company law provisions are exemplary for the eclectic law reception that is characteristic for the formation of the modern Japanese law. I.e. the provision on admission of foreign juridical persons in the Civil Code, which was in great parts modeled on German and French law, was influenced by a draft law of the Belgian François Laurent. As the provision named the foundation of the juridical person as relevant, the drafters feared the emergence of pseudo-foreign companies. They therefore inserted a provision against pseudo-foreign companies received from Italian law into the Commercial Code, that was drafted under the auspices of Ume and Okano and was passed a bit later. The coordination of the insertion of provisions into different codifications was ensured due to the fact that personalities like Hozumi and Ume were involved in the drafting of several laws – Hōrei and Civil Code, and Civil code and Commercial Code, respectively.

During the comprehensive reform program of the current Heisei era, the international company law was on the agenda when redrafting of the conflict of laws provisions in 2006. For since the enactment of the provisions in the Meiji era, the conception of how to deal with foreign companies had changed fundamentally. Since a dogmatic change that was concluded at the latest with the end of the Second World War, the main question is what law should be applicable. The foundation theory has been the prevailing opinion for decades, though restricted considerably by the alien law provisions on pseudo-foreign companies. The development of the Japanese international company law was independent from the Belgian and Italian models, but embedded into the constant analysis of a variety of legal orders. Especially the reform of the conflict of laws provisions in 2006 was prepared by intense comparative law research. Over the years, a distinct form of the foundation theory has evolved. Like in common law, the law of the place of the original foundation is the relevant connecting factor – not the place of the current registration or organization of the company as e.g. in Switzerland. In contrast to the common law jurisdictions and also to Germany, the admission – which is classified as alien law today – still is of (albeit small) significance. The liberality of the foundation theory is restricted considerably by the provision against pseudo-foreign companies. During the drafting of the Company Code of 2005, a deletion of this provision was considered. The comparison to Germany shows that this would have been remarkable internationally. In Germany, the unconfined application of the foundation theory was only given up reluctantly due to external pressure, and limited to the relatively secure European economic area. The Japanese provision was finally kept in a revised version – against the protest of a number of foreign securities companies and against the criticism of the US and the EU. In order to quieten this resistance, the Minister of Justice and the House of Councillors promised that the provision would be interpreted in an extremely narrow sense. That way, a – disputable – compromise was reached.

The fact that the foundation theory has been the prevailing opinion in Japan for a long time should have made a codification of the conflict of laws of companies easier. However, during the reform of the conflict of laws provisions of 2006, the creation of a provision on the law applicable to companies was abandoned even before the publication of the interim report. There were several reasons for that. On the one hand, there was no consensus on the kind of provision – enumeration of the company law matters or abstract formulation of the scope of application. The discussion on the deletion of the provision against pseudo-foreign companies brought further insecurity about the appropriate codification. On the other hand, the reform was not directed towards the international company law. Rather, it included the entire conflict of laws that was economically relevant. As the foundation theory had been prevailing for decades, there was no immediate reason for the codification of the conflict of laws for companies. The focus of reform was on the international contract law and law of torts, where the necessity for a legislative clarification was pressing. Also, the Japanese legislator wanted to further await the development of international company law issues in Europe, e.g. in Germany.

However – the reforms of the conflict of laws provisions and of the company law have contributed to the development and differentiation of the Japanese international company law. They gave reason for the arrangement of several symposia and publications, often with interdisciplinary approach. Whether this will advance in the future and might even be reflected in written law is an open question. Given the slow growth of the number of foreign companies in Japan, from the point of view of legal policy, there are more pressing issues. Also, most of the reforms have so far been directed to the redrafting of single law codes. Topics relating to several law codes – e.g. Hōrei, Company Code and Civil Code such as the international company law – are thus put at a disadvantage. However, legislative efforts in the EU could again spark the interest of the Japanese legislator, who takes interest in the European Community Law.