## Facts

- U.S.O. Corporation (U.S.O.) was incorporated in Delaware but was headquartered in Japan and conducted most of its business activities in Japan.
- U.S.O.’s business representative (John Doe) was domiciled in Japan.
- U.S.O. invested through a Japanese limited partnership that purchased real estate in Illinois.
- After the Illinois real estate was sold, U.S.O. deposited its share of the sale proceeds into a bank account in Japan with K.K. Mizuho Bank (Mizuho).
- The proceeds were intended to be held in the Japanese account as security for an outstanding loan owed by U.S.O.’s principal shareholder.
- Mizuho withdrew the deposited funds from the Japanese account and applied them to satisfy the shareholder’s debt.
- U.S.O. sued in a federal district court in Illinois, asserting claims against Mizuho including tort-based theories, unjust enrichment, and breach of contract arising from Mizuho’s withdrawal of the funds.
- While the Illinois action was still at an early stage, Mizuho filed a declaratory-judgment action in Japan against U.S.O. and Matsuda, John Doe’s Japan-based bankruptcy administrator, seeking a declaration that Mizuho was not liable to U.S.O.
- Most witnesses and documentary evidence relevant to both the Illinois claims and Mizuho’s requested declaration were located in Japan.
- U.S.O. and Matsuda moved to dismiss the Japanese declaratory action, arguing Japan was an inconvenient forum and that the Illinois court should decide Mizuho’s liability.

## Issues

1. Whether the Tokyo District Court should dismiss or otherwise decline to hear Mizuho’s declaratory-judgment action because U.S.O.’s related liability action was already pending in an Illinois federal court.
2. Whether the asserted inconvenience of litigating in Japan, given the parallel Illinois action, warranted dismissal of the Japan-filed declaratory action.

## Decision

- The Tokyo District Court denied the motion to dismiss.
- The court allowed Mizuho’s Japanese declaratory-judgment action to proceed despite the pending Illinois federal litigation.

## Legal Principles

- The existence of a related case pending in a foreign court does not, by itself, require a Japanese court to dismiss a properly filed action.
- In deciding whether to decline jurisdiction in light of parallel foreign proceedings, a Japanese court considers the dispute’s practical connections to Japan, including where the transaction occurred and where witnesses and documents are located.
- Declaratory relief may be available when the plaintiff shows a concrete legal interest in obtaining a judicial determination of the parties’ legal relationship, even if another forum is addressing overlapping questions.

## Conclusion

The Tokyo District Court refused to dismiss Mizuho’s declaratory-judgment action, reasoning that parallel litigation in Illinois did not automatically justify shutting down the Japan case and that the dispute’s center of gravity—banking conduct, parties’ operational ties, and key evidence—was strongly connected to Japan, supporting continued proceedings there.


K.K. Mizuho Bank v. U.S.O. Corporation and Matsuda, Hanrei Jihō (No. 1974) 156 (2007)