## Facts

- CGI K.K. (CGI) was a Japanese company that manufactured and sold electronic parts.
- Advanced Connectek Co., Ltd. (ACON) was a Taiwanese company that made peripheral equipment for electronic devices.
- CGI and ACON entered into a commercial contract relating to the supply of electronic parts/equipment.
- A dispute arose, and CGI sued ACON in Japan for breach of contract.
- ACON had no offices or representatives in Japan.
- ACON’s president and owner was also the president and owner of Renten-Kagi K.K. (Renten), a Japanese subsidiary that conducted business in Japan.
- ACON did not control Renten’s business operations in Japan on a day-to-day basis.
- ACON moved to dismiss, arguing the Japanese court lacked international (personal) jurisdiction over ACON.
- CGI opposed dismissal, arguing that ACON, through Renten, engaged in substantial and continuous commercial activity in Japan and that Renten effectively functioned as ACON’s office or place of business in Japan.

## Issues

1. Whether a Japanese court may exercise international jurisdiction over a foreign corporation that has no office or representatives in Japan when the foreign corporation’s Japan-related commercial activity is carried out through a Japanese subsidiary with common ownership/management.
2. Whether the Japanese subsidiary’s operations can be treated as the foreign corporation’s office or place of business in Japan for jurisdictional purposes, even where the foreign corporation does not direct the subsidiary’s daily operations.

## Decision

- The court denied ACON’s motion to dismiss for lack of jurisdiction.
- The court held that it could exercise international jurisdiction over ACON.
- The court accepted that, in light of the relationship between ACON and Renten and the character of the commercial activity in Japan, Renten’s role could support treating ACON as having a sufficient business presence in Japan for purposes of this dispute.
- The case was permitted to proceed in Japan on CGI’s contract claim.

## Legal Principles

- International jurisdiction over a foreign corporation may be found where the defendant’s business connection to Japan is substantial and continuous, not merely isolated.
- A related domestic company’s activities may be attributed to a foreign defendant for jurisdictional purposes when, in function, the domestic entity serves as the foreign defendant’s base for conducting business in Japan in connection with the dispute.
- Formal corporate separation and the absence of day-to-day operational control do not always prevent attribution when the overall relationship and commercial reality show that the foreign defendant’s Japan business is conducted through the domestic entity.
- In assessing jurisdiction, courts consider whether haling the foreign defendant into a Japanese court is reasonable in light of the defendant’s Japan-facing commercial activity and the foreseeability of suit in Japan.

## Conclusion

The Yokohama District Court held that Japan had international jurisdiction over ACON despite ACON’s lack of offices or representatives in Japan, because ACON’s Japan-related business was carried out through its Japanese subsidiary, Renten, in a manner sufficient to treat that activity as ACON’s effective business presence for the dispute, and the court therefore denied ACON’s motion to dismiss.


CGI K.K. v. Advanced Connectek Co., Ltd., Hanrei Jihō (No. 1941) 124 (2007)