## Facts

- Hong Kong residents were involved in Hong Kong litigation connected to guarantee-related obligations and later sought indemnification from a Japanese corporation, Sadhwanis Japan Limited, in Hong Kong.
- The Hong Kong residents prevailed in the Hong Kong indemnification action against the Japanese corporation and sought a court order awarding litigation costs.
- A Japanese attorney retained by the Hong Kong residents personally served the motion for costs on the Japanese corporation in Hong Kong.
- The Japanese corporation appeared in the Hong Kong proceedings to object, asserting the Hong Kong court lacked jurisdiction over it.
- The Hong Kong court entered a final judgment ordering the Japanese corporation to pay a determinable sum as litigation costs.
- The Hong Kong residents brought an action in Japan seeking an execution judgment to enforce the Hong Kong costs judgment against assets located in Japan.
- A Japanese district court granted enforcement, and the Japanese corporation appealed to the Supreme Court of Japan.

## Issues

1. Whether the foreign court’s international jurisdiction was acceptable under Japanese standards for recognition and enforcement of foreign judgments (indirect jurisdiction).
2. Whether the losing party received adequate notice and an opportunity to be heard, given the mode of service and its appearance to contest jurisdiction.
3. Whether enforcing a foreign judgment awarding litigation costs violates Japanese public order or good morals.
4. Whether a final foreign judgment awarding litigation costs qualifies as an enforceable money judgment in Japan.

## Decision

- The Supreme Court affirmed the execution judgment permitting enforcement of the Hong Kong costs judgment in Japan.
- The Court found the foreign court’s jurisdiction acceptable under Japanese principles of international jurisdiction when assessed in light of the circumstances.
- The Court held the notice-and-hearing requirement was satisfied because the Japanese corporation was served and in fact appeared to present its jurisdictional objection.
- The Court determined that enforcing the costs award was not contrary to Japanese public policy.
- The Court treated the foreign costs award as a final money judgment capable of enforcement in Japan, subject to satisfaction of the statutory conditions for foreign judgments.

## Legal Principles

- Recognition and enforcement of a foreign judgment require, among other conditions, that the foreign court’s jurisdiction be acceptable under Japanese principles of international jurisdiction (indirect jurisdiction review).
- Indirect jurisdiction is assessed by reference to Japanese jurisdictional standards and the specific circumstances, with enforcement denied where the foreign forum’s jurisdiction would be unreasonable or exorbitant.
- The notice-and-opportunity-to-defend requirement is met where the losing party is duly served or otherwise appears and has a meaningful chance to present defenses, including jurisdictional objections.
- A final foreign judgment ordering payment of litigation costs constitutes an enforceable money judgment, unless enforcement is barred by statutory safeguards such as public policy (and other applicable statutory conditions).

## Conclusion

The Supreme Court permitted enforcement in Japan of a Hong Kong judgment awarding litigation costs, holding that the foreign court’s jurisdiction was acceptable under Japanese standards, the defendant had adequate notice and an opportunity to be heard, and the costs award did not violate Japanese public policy.


Sadhwani v. Sadhwani, 52 Minshū (No. 3) 853 (Japan 1998)