Abstract
This national report provides a brief picture of the current status of Japanese Commercial Code. Following a very basic introduction on Japanese legal system and private law legislation and the history of Japanese Commercial Code, the “de-codification” of Japanese Commercial Code is explained. It explores how “de-codification” happened, why it happened, and what the reactions of the lawyers and academics are.
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Notes
- 1.
For instance, Securities Exchange Act (Law No.25, 1948) was legislated after Securities Act 1933 and Securities Exchanges Act 1934 of the United State. Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Law No.54, 1947) and Criminal Procedure Code (Law No.131, 1948) is heavily influenced by the U.S. law.
- 2.
Local government can make prefectural or municipal ordinance to the extent that the law authorizes. Any dispute on the ordinance, however, is decided in the ordinary court just like a dispute on national legislation.
- 3.
Law No.89, 1896.
- 4.
Law No.45, 1907.
- 5.
Law No.48, 1899.
- 6.
Law No.109, 1996.
- 7.
Law No.131, 1948.
- 8.
- 9.
A notable example of the influence from English law is Article 416 of the Civil Code, which codifies the well-know “foreseeability test” in Hadley v Baxendale [1854] EWHC J70.
- 10.
For a brief explanation of the Japanese Commercial Code, see, Oda (2009), p. 117
- 11.
Law No.32, 1890
- 12.
The President of the Committee was Hirobumi Ito, the prime minister at the time.
- 13.
The provisions on corporation, note, bill of exchange and check, and bankruptcy of the Old Code came into force in July 1893. The rest of the Code entered into force in July 1898. The Old Code was replaced by the New Code in June 1899.
- 14.
Book IV was deleted in 1932 when Japan joined Convention Providing a Uniform Law For Bills of Exchange and Promissory Notes, Geneva, 1930 and Convention Providing a Uniform Law for Cheques, Geneva,1931. Bills of Exchange and Promissory Notes Act (Law No. 20, 1932) and Check Act (Law No.57, 1933) was enacted at the same time.
- 15.
Law No.86, 2005.
- 16.
Before 2005 Revision, it was Book III of the Commercial Code.
- 17.
Law No.56, 2008.
- 18.
At least two thirds of the provisions in the Commercial Code disappeared in the 2005 and 2008 Revisions.
- 19.
The relationship between “merchant” and “commercial act” is complicated under the Japanese Commercial Code. A merchant is defined as a person who engages in commercial act as a business. (Art. 4). Article 501 of the Commercial Code enumerates the “absolute commercial act” (transactions that are commercial acts per se) and Article 502 “business commercial act” (transactions that are commercial acts if effected as a business). A person who engages in transactions listed in Articles 501 and 502 is a merchant. In addition, any transaction that a merchant does for its business is regarded as a commercial act (Article 503(1)). Therefore, the concept of merchant is derived from commercial act in the former case while commercial act is derived from the concept merchant in the latter.
- 20.
Even prior to the 2008 Revision, Article 664 and 683(1) of the Commercial Code provided that the provisions in the Commercial Code applies mutatis mutandis to the insurance contracts with mutual companies.
- 21.
See, for example, the legislation in France (loi du 13 juillet 1930 relative au contrat d'assurance), in Germany (Versicherungsvertragsgesetz, 30 Mai 1908 (RGBl. S. 263)), and in Switzerland (Bundesgesetz vom 2. April 1908 über den Versicherungsvertrag (Versicherungsvertragsgesetz, VVG)).
- 22.
The Article 52 of the Commercial Code prior to the 2005 Revision provided as follows:
“1. In this code, a “Company” means an association incorporated for the purpose of engaging in commercial acts as a business 2. An association whose purpose is to make a profit and that is incorporated in accordance with the provisions of this Book shall be deemed to be a Company even in cases where it does not engage in any commercial acts as a business.”
- 23.
Companies Act 2005 has 979 articles.
- 24.
This is not a case of “commercialization of the Civil Code”. Even at present, the provisions on commercial instruments apply regardless who use them (Article 501(4) provides that any transaction with respect to commercial instrument is deemed to be a commercial act (“absolute commercial act”). The issue is just a matter of the location of provisions and not a substantive change in the scope of application.
- 25.
Provisions on abandonment of the ship were deleted in 1975 when Japan joined the International Convention Relating to the Limitation of the Liability of Owners of Sea-Going Ships, 10 October 1957 and enacted the Law on the Limitation of Liability for Shipowners (Law 94, 1975).
- 26.
Law No.79, 1937.
- 27.
Companies Act 2005 provides the corresponding regulation for a corporation.
- 28.
Convention for the Unification of Certain Rules for International Carriage by Air, Montreal, 28 May 1999.
- 29.
Law No. 172, 1957. The current Act is based on the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (“Hague Rules”), 25 August 1924 as amended by the Protocol of 23 February 1968 (“Visby Protocol”) and the Protocol of 21 December 1979 (“SDR Protocol”).
- 30.
Law No. 75,1900.
- 31.
United Nations Convention on Contracts for the International Sale of Goods, 1980 (CISG).
- 32.
Law No. 61, 2000.
- 33.
Law No.159, 1961.
- 34.
Law No. 57, 1976.
- 35.
Article 502(13).
- 36.
Law No. 108, 2006.
- 37.
Law No.154, 2004.
- 38.
Law No. 20 of 1932.
- 39.
Law No. 57 of 1933.
- 40.
The following discussion is based on Fujita (2010).
- 41.
See, “Interim Draft for the Reform of Civil Code (Provisions on Claims)” (Legislative Council of Justice, February 26, 2013), No.39 Lease Contract (15).
- 42.
The current version is “The Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication no. 600”.
- 43.
Article 5 of the Uniform Commercial Code of the United States provides the rules on letters of credit. The provisions have caused confusion in this area, which finally led to the 1995 Revision. The primary purpose of the revision is to align the provisions in the Commercial Code with UCP.
- 44.
Ordonnance n°2000–912 du 18 September 2000 relative à la partie Législative du code de commerce.
- 45.
As the most notable example, see, Matsumoto (1925).
- 46.
In fact, the provisions in Book III of the Commercial Code are applicable to non-commercial ships (Article 35 of the Supplementary Provisions on Law on Ships (Law No.46, 1899)).
- 47.
Law No.125, 1963.
- 48.
Law No.47, 1993.
- 49.
This does not mean that we hear no complaint at all, like for example, against the Companies Act 2005. Much complaint has been heard from practitioners against the Act as being too complex. The Act, which contains 979 articles that supplemented hundreds of regulations made by the Ministry of Justice, is one of the most complex structures in the Japanese legal system. However, it should be noted that the practitioners complain not because we have an independent act outside the Commercial Code but because the independent act is wrongly, from their perspective, legislated. The complaint has nothing to do with the “de-codification” of the Commercial Code.
- 50.
The French legal system has had the commercial court (tribunal de commerce) for many years.
- 51.
Of course, it is problematic that many provisions in the current Commercial Code are out of date. However, this is a matter of substance of the Code rather than its form. “De-codification” has nothing to do with this problem.
- 52.
[Author’s note] The Meiji-era corresponds with the period from January 25, 1868 to July 30, 1912. The Commercial Code was promulgated in 1899.
- 53.
Tatsuta (1989), p. 103. (The excerpt is translated by the author).
- 54.
Compared with other areas of law, the functional approach is most prevalent in commercial and corporate law scholarships in Japan.
- 55.
There was academic debate among Japanese scholars as to what should be the subject of commercial law scholarship in the middle of the twentieth century. One sees the commercial law as the body of law concerning the issues with “commercial color” while others see it as the “law of enterprise”. It should be noted that the debate was concerned with how we systematically understand the commercial law as an academic subject. The debate has little to do with how the actual legislation on commercial matters should look like.
- 56.
The Japan Association of the Private Law devoted a whole day for a symposium on “the Amendment of the Commercial Code” in 2010. As one of the speakers of the symposium, I reluctantly have to report that the subject did not seem to draw much attention from the audience. See, Kanda et. al. (2011). Although several questions were raised during the debate, none expressly stated whether or not the Commercial Code should remain. No specific proposal was also made as to how the future of the Commercial Code should be.
- 57.
It was the most important motivation for the legislators when several codes (including the Commercial Code) were first promulgated in the Meiji-era. The existence of a respectable code in all important areas of law was regarded as a symbol for the modern Japanese society, which has been fully westernized. They were thought to be necessary for the negotiation to abolish the disadvantageous and unfair treaties concluded in the preceding era with western countries.
- 58.
See, Possible Future of the Japanese Commercial Code, 3 above
References
Fujita, Tomotaka (2010) Shoho-sosoku, Sho-kohi-ho no Genjyo to Mirai [The Current Status and Future of General Provisions and Commercial Acts of the Commercial Code], NBL 935.
Hoshino, Eiichi (1965) Nihon Minpoten ni Ataeta Fransu Minpo no Eikyo (1) [The Influence of French Civil Code on Japanese Civil Code (1), Nichifutsu Hogaku [Japanese-French Legal Studies] 3.
Kanda, Hideki, et al. (2011) Sho-ho no Kaisei [the Amendment of the Commercial Code], Shiho [Journal of Private Law], 73.
Matsumoto, Jyoji (1925) Minsho Niho Toitsu-ron [On Unification of the Civil and Commercial Code], in Shiho Ronbun-shu [Selected Articles on Private Law], Tokyo, Gansho-do Shoten (in Japanese)
Oda, Hiroshi (2009) (3rd ed.) Japanese Law, Oxford: Oxford University Press.
Tatsuta, Misao (1989) Shoho-gaku no Korekara-no Kadai [The Task for the Commercial Scholarship for the Future], Hogaku Kyo-shitsu
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Fujita, T. (2014). The Commercial Code in Japan. In: Wang, WY. (eds) Codification in East Asia. Ius Comparatum - Global Studies in Comparative Law, vol 2. Springer, Cham. https://doi.org/10.1007/978-3-319-03446-1_9
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