## Facts

- Tōhō K.K. operated a California subsidiary, Toho International, to conduct U.S. film-related business.
- Tōhō sent an employee, Yonemoto, to California to review the subsidiary’s finances; he remained there after identifying financial difficulties.
- In California, Yonemoto worked with Chieko Hachitsuka, a California resident, who assisted him financially and served as interpreter/intermediary with American film producers.
- The parties discussed a joint venture to import a film into Japan and obtain Japanese distribution and screening rights, but negotiations failed and no final contract was formed.
- Hachitsuka sued Tōhō K.K., Toho International, and Yonemoto in California state court for breach of contract and fraud, seeking damages tied to alleged losses connected to Japan.
- After the California filing, Tōhō K.K., Toho International, and Yonemoto brought an action in the Tokyo District Court seeking a declaration that they were not liable to Hachitsuka in tort (fraud) under Japanese law for the alleged damages.

## Issues

1. Whether the plaintiffs had sufficient legal interest under Japanese civil procedure to seek a declaratory judgment of non-liability for alleged fraud.
2. Whether a pending foreign lawsuit involving the same dispute required dismissal or non-acceptance of a Japanese declaratory action.
3. Whether the asserted relationship and alleged harm were sufficiently connected to Japan to justify adjudication of the tort non-liability question under Japanese law.

## Decision

- The Tokyo District Court accepted the declaratory action as procedurally admissible.
- The court did not dismiss the case solely because parallel California litigation was pending.
- The court treated the plaintiffs’ status as defendants in the foreign fraud suit as creating a concrete need to clarify the legal relationship through declaratory relief.

## Legal Principles

- A declaratory judgment action requires a concrete legal interest in clarifying a legal relationship; being sued (or credibly threatened with suit) can establish that interest.
- The existence of parallel foreign proceedings is not, by itself, a categorical bar to maintaining a Japanese civil action concerning the same underlying dispute.
- In foreign-related disputes, Japanese courts may proceed where the legal relationship and alleged harm have meaningful ties to Japan and adjudication would clarify the parties’ rights and obligations under Japanese law.

## Conclusion

The court permitted a declaratory non-liability action by Japanese defendants sued abroad, holding that pending foreign litigation did not automatically defeat the procedural admissibility of declaratory relief when the plaintiffs showed a concrete interest in judicial clarification of their tort liability position under Japanese law.


Tōhō K.K. v. Hachitsuka, 16 Kakyū Minshū (No. 5) 923 (Tokyo Dist. Ct. 1965)