Description

Japanese trust law has a long history dating back to 1922. However, court decisions applying it remain rare. One notable exception is Article 2(1) of the Act, the clause simply defining what is governed as a trust under the Act. Despite its declaratory character, a series of cases has arisen under this clause in which parties argued that their relationship should be considered a trust even though they had not designated it as such. These cases have prompted ongoing academic debate over the essential elements of trust. Since the trust designation is often raised as a way of shielding assets from creditors or insolvency proceedings drawing on trust’s ringfencing effect, this remedial aspect is sometimes also viewed as comparable to resultant or constructive trusts in common law jurisdictions. Japanese trust law, however, does not recognise a remedial application of trust, and such comparisons should be drawn with caution. This talk identifies the essential elements of trust as they emerge from Japanese case law and academic debate, and analyses the functions trust designation performs within that case law, weighing its remedial role against the doctrinal and practical considerations courts should rely on. Through this examination, the talk shows how the concept of trust imported from common law jurisdictions has been shaped in Japanese trust law to play the same role as a nominated contract fitting within the Japanese civil law framework.