Paper short abstract:

Japanese private international law was recently reformed; however, some changes are not in line with the European conflict of laws. The lack of legal harmonization was considered the greatest challenge in EU industry, but it has an impact also on Japanese economy, generating costs and expenses.

Paper long abstract:

Japanese private international law has been recently reformed in a perspective of global harmonization; however, some changes are not in line with the European conflict of laws. The lack of legal harmonization has been considered the greatest challenge in EU industry and economy, but it is having an impact also on Japanese economy.

The same costs identified by official EU reports about European law can be applied and researched, in a wider point of view, to EU-Japanese relations: business, legal, administrative and economic costs and related loss of revenue. Such difficulties might prevent both individuals and companies from moving and investing in Japan and vice versa.

While the reform of company law, aimed at modernizing Japanese business law after the criticisms of foreign investors, reached the goal to introduce an improvement to the former corporate governance system, the reform of private international law failed to find an acceptable solution to the main issues of the relevant legislation.

The most controversial topics in Japanese conflict of laws are related to torts, juristic acts, freedom of choice of the applicable law, consumer and labor contracts, assignment of receivables and product liability claims, each bearing huge consequences in business, foreign trade and investments.

With regard to contracts and claims, in addition to the deterrent effect, the costs and loss of revenue are related to breach of contracts and non-performance, unrecoverable debts, impossibility of enforcement and difficulties in judgment recognition procedures.

The lack of recognition of torts and related remedies in Japan is another problem of Japanese system, since it might compromise the rights of companies and individuals, including intellectual rights, and it might generate costs and expenses related to legal assistance and unfair competition advantages toward some companies.

The provision about assignment of claims might result in the invalidity of international factoring agreements, while product liability, labor and consumer contracts provisions might be detrimental to individual rights.

The uncertainty resulting from the absence of harmonization will ultimately create a barrier to the movement of people, goods, companies and services.