Act on Recognition of and Assistance for Foreign Insolvency Proceedings

Link to law: http://www.japaneselawtranslation.go.jp/law/detail_download/?ff=08&id=1935
Published: 2006

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Act on Recognition of and Assistance for Foreign Insolvency Proceedings

Chapter I General Provisions (Article 1 to Article 16)

Chapter II Recognition of Foreign Insolvency Proceedings (Article 17 to Article 24)

Chapter III Disposition of Assistance for Foreign Insolvency Proceedings (Article 25 to Article 55)

Chapter IV Rescission of Recognition of Foreign Insolvency Proceedings (Article 56)

Chapter V Treatment of Cases in which Other Insolvency Proceedings Exist

Section 1 Treatment of Cases in which Domestic Insolvency Proceedings Exist (Article 57 to Article 61)

Section 2 Treatment of Cases in which Recognition and Assistance Proceedings in relation to Other Foreign Insolvency Proceedings Exist (Article 62 to Article 64)

Chapter VI Penal Provisions (Article 65 to Article 71)

Supplementary Provisions

Chapter I General Provisions

(Purpose)

Article 1 The purpose of this Act is to appropriately give effect to foreign insolvency proceedings in Japan by providing recognition and assistance proceedings in relation to such foreign insolvency proceedings commenced against debtors who engage in international economic activities, with the aim of ensuring liquidation of the assets or economic rehabilitation of such debtors in an internationally coordinated manner.

(Definitions, etc.)

Article 2 (1) In this Act, the terms listed in the following items shall have the meanings prescribed in those items:

(i) foreign insolvency proceedings: proceedings petitioned for in a foreign country which are equivalent to bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings or special liquidation proceedings;

(ii) primary foreign proceedings: in the case of a debtor who engages in a commercial business, foreign insolvency proceedings petitioned for in the country where the debtor's principal business office is located; in the case of a debtor who does not engage in commercial business or who engages in commercial business but does not have any business offices, foreign insolvency proceedings petitioned for in the country where the debtor, if an individual, has a domicile, or petitioned for in the country where the debtor, if a juridical person or any other association or foundation, has its principal office;

(iii) secondary foreign proceedings: foreign insolvency proceedings other than primary foreign proceedings;

(iv) domestic insolvency proceedings: bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings or special liquidation proceedings petitioned for in Japan;

(v) recognition of foreign insolvency proceedings: to recognize foreign insolvency proceedings as the basis for rendering a disposition of assistance in Japan under the provisions of Chapter III;

(vi) recognition and assistance proceedings: proceedings for making judicial decisions on petitions for recognition of foreign insolvency proceedings and for rendering dispositions with regard to debtors' businesses and property in Japan in support of foreign insolvency proceedings as provided for in the following Chapter and thereafter;

(vii) foreign trustee: a person, other than the debtor, who has a right to administer and dispose of a debtor's property in a foreign insolvency proceeding;

(viii) foreign trustee, etc.: the foreign trustee if a foreign trustee is appointed in a foreign insolvency proceeding, or the debtor if no foreign trustee is appointed in a foreign insolvency proceeding; and

(ix) recognition trustee: a person who is ordered, under the provisions of Article 32, paragraph (1), to administer the debtor's business and property in Japan.

(2) An actionable claim pursuant to the provisions of the Code of Civil Procedure (Act No. 109 of 1996) shall be deemed to exist in Japan.

(Status of Foreign Nationals)

Article 3 A foreign national or foreign juridical person shall have the same status as a Japanese national or Japanese juridical person, respectively, with respect to recognition and assistance proceedings.

(Jurisdiction over Recognition and Assistance Cases)

Article 4 Recognition and assistance cases shall be subject to the exclusive jurisdiction of the Tokyo District Court.

(Transfer of Recognition and Assistance Cases)

Article 5 The court prescribed in the preceding Article may, when it finds it necessary in order to avoid substantial harm or delay, by its own authority, transfer a recognition and assistance case to the district court that has jurisdiction over the debtor's domicile, residence, business office or other office or the location of the debtor's property, upon making an order of recognition of foreign insolvency proceedings or after making such an order.

(Optional Oral Argument, etc.)

Article 6 (1) A judicial decision concerning recognition and assistance proceedings may be made without oral argument.

(2) By its own authority, the court may engage in necessary investigations in recognition and assistance cases.

(Appeal)

Article 7 A person who has an interest in a judicial decision concerning a recognition and assistance proceeding may, only as specially provided for in this Act, file an immediate appeal against the judicial decision. Where public notice of the juridical decision is given, the period for filing shall be two weeks from the day on which such public notice becomes effective.

(Public Notice, etc.)

Article 8 (1) Public notice under the provisions of this Act shall be effected by publication in the official gazette.

(2) Public notice shall become effective on the day following the day on which it is published.

(3) Where service is required to be made pursuant to the provisions of this Act, public notice may be substituted for it; provided, however, that this shall not apply where both public notice and service are required to be given pursuant to the provisions of this Act.

(4) When public notice of a judicial decision is given pursuant to the provisions of this Act, all interested parties are deemed to have been notified of the judicial decision.

(5) The provisions of the preceding two paragraphs shall not apply where special provisions exist in this Act.

(Commission of Registration, etc. on Recognition and Assistance Proceedings of Juridical Persons)

Article 9 (1) Where a disposition is rendered under the provisions of Article 32, paragraph (1) or Article 51, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 51, paragraph (3)) against a debtor who is a juridical person, a court clerk shall, without delay and by his/her own authority, commission the registry office with jurisdiction over the location of the head office or principal office of the debtor to register the disposition; provided, however, that if the debtor is a foreign juridical person which is categorized as a foreign company, the registry office having jurisdiction over the place of domicile of its representative person for Japan (limited to one who has a domicile in Japan) (in the case of a foreign company that has business offices in Japan, the location of each such business office) shall be commissioned, and if the debtor is any other type of foreign juridical person, the registry office having jurisdiction over the location of each of its offices shall be commissioned.

(2) The registration of a disposition prescribed in the preceding paragraph shall include the name and address of each recognition trustee or provisional administrator, and if permission as set forth in the proviso to Article 39, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1); hereinafter the same shall apply in this paragraph) is granted for independent performance of duties by each recognition trustee or provisional administrator, a statement to that effect. If permission as set forth in the proviso to Article 39, paragraph (1) is granted for the division of duties among recognition trustees or provisional administrators, a statement to that effect and a description of the duties assigned to each recognition trustee or provisional administrator shall be included.

(3) The provisions of paragraph (1) shall apply mutatis mutandis where a disposition prescribed in said paragraph is changed or revoked, where such disposition ceases to be effective (excluding cases where the disposition ceases to be effective due to the recognition and assistance proceedings having ceased to be effective under the provisions of Article 61, paragraph (2) or Article 64; the same shall apply in paragraph (2) and paragraph (5) of the following Article) or where there is a change to any of the matters prescribed in the preceding paragraph.

(4) Where a stay order is issued against a juridical person debtor under the provisions of the main clause of Article 57, paragraph (2), Article 58, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 58, paragraph (2)), Article 59, paragraph (1), item (i) or Article 60, paragraph (1), if any of the following registrations exists with regard to the debtor, a court clerk shall, without delay and by his/her own authority, commission the registry office prescribed in paragraph (1) to register the stay order:

(i) registration under the provisions of Article 257, paragraph (1) or paragraph (4) of the Bankruptcy Act (Act No. 75 of 2004);

(ii) registration under the provisions of Article 11, paragraph (1) or paragraph (2) of the Civil Rehabilitation Act (Act No. 225 of 1999);

(iii) registration under the provisions of Article 258, paragraph (1) or paragraph (4) of the Corporate Reorganization Act (Act No. 154 of 2002) or the provisions of Article 159, paragraph (1) or paragraph (4) or Article 332, paragraph (1) or paragraph (4) of the Act on Special Measures, etc. for Reorganization Proceedings for Financial Institutions, etc. (Act No. 95 of 1996); or

(iv) registration under the provisions of Article 938, paragraph (1), item (i) of the Companies Act (Act No. 86 of 2005) (including cases where applied mutatis mutandis pursuant to other Acts).

(5) The provisions of the preceding paragraph shall apply mutatis mutandis where a stay order as prescribed in said paragraph is revoked or where such stay order ceases to be effective.

(6) Where an order of rescission of recognition made under the provisions of Article 56, paragraph (1), item (iii) becomes final and binding with regard to a juridical person debtor, if any of the registrations listed under paragraph (4) exist or there is a registration made under the provision of paragraph (1) in other recognition and assistance proceedings that have ceased to be effective under the provision of Article 64 with regard to said debtor, a court clerk shall, without delay and by his/her own authority, commission cancellation of the registration.

(7) Where an order of termination of bankruptcy proceedings is issued or where an order of confirmation of the rehabilitation plan, an order of confirmation of the reorganization plan, or an order of termination of special liquidation proceedings becomes final and binding, if there is a registration made under the provision of paragraph (1) in the recognition and assistance proceedings that have ceased to be effective pursuant to the provision of Article 61, paragraph (2), a court clerk of the court before which the bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings or special liquidation proceedings are pending shall, without delay and by his/her own authority, commission cancellation of the registration.

(Commissioning of Registration, etc. Regarding Registered Rights)

Article 10 (1) Where a disposition is rendered against the debtor under the provisions of Article 32, paragraph (1), and a court clerk becomes aware that there is any registered right that belongs to the debtor's property, the court clerk shall, without delay and by his/her own authority, commission registration of the disposition.

(2) The provisions of the preceding paragraph shall apply mutatis mutandis where a disposition as prescribed in said paragraph is revoked or where such disposition ceases to be effective.

(3) The provisions of the preceding two paragraphs shall not apply where a registration of a disposition under the provisions of Article 32, paragraph (1) is commissioned pursuant to the provisions of paragraph (1) of the preceding Article.

(4) Where a disposition is rendered under the provisions of Article 26, paragraph (1) or paragraph (2) with regard to a registered right that belongs to the debtor's property, a court clerk shall, without delay and by his/her own authority, commission registration of the disposition.

(5) The provision of the preceding paragraph shall apply mutatis mutandis where a disposition as prescribed in said paragraph is changed or revoked or where such disposition ceases to be effective.

(6) Where an order of rescission of recognition under the provisions of Article 56, paragraph (1), item (iii) becomes final and binding, and a court clerk becomes aware that any of the following registrations exists, the court clerk shall, without delay and by his/her own authority, commission cancellation of the registration:

(i) a registration made with regard to a registered right to the debtor's property under the provisions of Article 258, paragraph (1), item (ii) of the Bankruptcy Act or Article 259, paragraph (1), item (i) of said Act (including cases where applied mutatis mutandis pursuant to paragraph (2) of said Article), Article 12, paragraph (1) of the Civil Rehabilitation Act (including cases where applied mutatis mutandis pursuant to paragraph (2) of said Article), Article 260, paragraph (1) of the Corporate Reorganization Act (including cases where applied mutatis mutandis pursuant to paragraph (2) of said Article), Article 161, paragraph (1) of the Act on Special Measures, etc. for Reorganization Proceedings for Financial Institutions, etc. (including cases where applied mutatis mutandis pursuant to paragraph (2) of said Article) or Article 334, paragraph (1) of said Act (including cases where applied mutatis mutandis pursuant to paragraph (2) of said Article) or Article 938, paragraph (3) of the Companies Act (including cases where applied mutatis mutandis pursuant to paragraph (4) of said Article or to other Acts); or

(ii) a registration made under the provisions of paragraph (1) or paragraph (4) in other recognition and assistance proceedings that have ceased to be effective under the provisions of Article 64.

(7) Where an order of termination of bankruptcy proceedings is issued or where an order of confirmation of the rehabilitation plan, order of confirmation of the reorganization plan or order of termination of the special liquidation proceedings becomes final and binding, if a court clerk of the court before which the bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings or special liquidation proceedings are pending becomes aware that there is a registration made under the provisions of paragraph (1) or paragraph (4) in the recognition and assistance proceedings that have ceased to be effective pursuant to the provisions of Article 61, paragraph (2), the court clerk shall, without delay and by his/her own authority, commission cancellation of the registration.

(Exclusion from Taxation)

Article 11 The registration and license tax shall not be imposed on the registrations under the provisions of the preceding two Articles.

(Application Mutatis Mutandis to Registered Rights)

Article 12 The provisions of the preceding two Articles shall apply mutatis mutandis to other registered rights.

(Inspection, etc. of Case Documents)

Article 13 (1) Pursuant to the provisions of this Act or the provisions of the Code of Civil Procedure as applied mutatis mutandis pursuant to Article 15, an interested person may make a request to a court clerk for the right to inspect documents and any other objects (hereinafter referred to as "documents, etc." in this Article and paragraph (1) of the following Article) submitted to the court or prepared by the court.

(2) An interested person may make a request to a court clerk for the copying of documents, etc., issuance of an authenticated copy, transcript or extract of documents, etc. or issuance of a certificate of matters concerning the case in question.

(3) The provisions of the preceding paragraph shall not apply with respect to documents, etc. which are prepared in the form of audiotapes or videotapes (including objects on which certain matters are recorded by any means equivalent thereto). In this case, upon the request of an interested person with regard to these objects, a court clerk shall permit reproduction thereof.

(4) Notwithstanding the provisions of the preceding three paragraphs, an interested person other than a foreign trustee, etc. may not make a request under the provisions of the preceding three paragraphs until a stay order under the provisions of Article 25, paragraph (2), a disposition under the provisions of Article 26, paragraph (2), a stay order under the provisions of Article 27, paragraph (2), a disposition under the provisions of Article 51, paragraph (1), a stay order under the provisions of Article 58, paragraph (1) or Article 63, paragraph (1) or a judicial decision on a petition for recognition of foreign insolvency proceedings is made.

(Restriction on Inspection, etc. of Detrimental Part of Documents, etc)

Article 14 (1) Where, with regard to the following documents, etc., a prima facie showing is made to the effect that the documents, etc. in question contain a part that is likely to be significantly detrimental to the achievement of the purpose of recognition and assistance proceedings if it is subject to inspection or copying, issuance of an authenticated copy, transcript or extract or reproduction (hereinafter referred to as "inspection, etc." in this Article) (such part of the documents, etc. shall hereinafter be referred to as a "detrimental part" in this Article) by an interested person, the court may, upon petition by the debtor, foreign trustee, recognition trustee (including a recognition trustee representative; hereinafter the same shall apply in this paragraph and the following paragraph) or provisional administrator (including a provisional administrator representative; hereinafter the same shall apply in this paragraph and the following paragraph) who submitted the documents, etc. in question, limit persons who may request inspection, etc. of the detrimental part to the person who has filed the petition, foreign trustee, etc., recognition trustee and provisional administrator:

(i) documents, etc. submitted to the court for the purpose of obtaining permission under the provisions of Article 31, paragraph (1), Article 35, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)), Article 35, paragraph (1) as applied mutatis mutandis pursuant to Article 40, paragraph (3) (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)) or of the proviso to Article 53, paragraph (1); and

(ii) documents, etc. pertaining to the report under the provisions of Article 17, paragraph (3) or Article 46 (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)).

(2) When the petition set forth in the preceding paragraph is filed, no interested person (excluding the person who filed the petition set forth in said paragraph and foreign trustees, etc., recognition trustees and provisional administrators; the same shall apply in the following paragraph) may request inspection, etc. of the detrimental part until a judicial decision on the petition becomes final and binding.

(3) An interested person who intends to request inspection, etc. of the detrimental part may file a petition with the court for revocation of the order made under the provisions of paragraph (1), on the grounds that the requirement prescribed in said paragraph is not met or is no longer met.

(4) An immediate appeal may be filed against an order to dismiss without prejudice the petition set forth in paragraph (1) and a judicial decision on the petition set forth in the preceding paragraph.

(5) An order to revoke an order issued under the provisions of paragraph (1) shall not be effective unless it becomes final and binding.

(Mutatis Mutandis Application of the Code of Civil Procedure)

Article 15 With respect to recognition and assistance proceedings, except as otherwise provided, the provisions of the Code of Civil Procedure shall apply mutatis mutandis.

(Rules of the Supreme Court)

Article 16 In addition to what is provided for in this Act, the necessary matters concerning recognition and assistance proceedings shall be prescribed by the Rules of the Supreme Court.

Chapter II Recognition of Foreign Insolvency Proceedings

(Petition for Recognition of Foreign Insolvency Proceedings)

Article 17 (1) Where the debtor has a domicile, residence, business office or other office in the country where foreign insolvency proceedings are petitioned against the debtor, a foreign trustee, etc. may file a petition with a court for recognition of the foreign insolvency proceedings.

(2) The petition set forth in the preceding paragraph may be filed even before a decision equivalent to an order of commencement of bankruptcy proceedings, order of commencement of rehabilitation proceedings, order of commencement of reorganization proceedings or order of commencement of special liquidation proceedings (referred to as a "decision to commence proceedings" in Article 22, paragraph (1)) is made with regard to the foreign insolvency proceedings.

(3) Where a foreign trustee, etc. has filed a petition set forth in paragraph (1), he/she shall, as provided for by the court, report to the court progress in the foreign insolvency proceedings to which the petition pertains, and any other matters ordered by the court.

(4) The court, when it finds it necessary in order to ensure smooth progress in recognition and assistance proceedings, may order the foreign trustee, etc. who has filed the petition set forth in paragraph (1) to appoint an attorney at law to act as an agent for the recognition and assistance proceedings.

(Obligation to File a Petition for Commencement of Bankruptcy Proceedings, etc. and Relationship with a Petition for Recognition of Foreign Insolvency Proceedings)

Article 18 Even where a director or a person equivalent to a director of a juridical person is required to file a petition for commencement of bankruptcy proceedings or commencement of special liquidation proceedings against the juridical person pursuant to the provisions of other laws, it shall not preclude the filing of a petition for recognition of foreign insolvency proceedings.

(Prima Facie Showing)

Article 19 When filing a petition for recognition of foreign insolvency proceedings, the petitioner shall make a prima facie showing that the debtor has a domicile, residence, business office or other office in the country where foreign insolvency proceedings are petitioned for against the debtor.

(Prepayment of Expenses)

Article 20 (1) When filing a petition for recognition of foreign insolvency proceedings, a foreign trustee, etc. shall prepay an amount designated by the court for expenses related to the recognition and assistance proceedings.

(2) An immediate appeal may be filed against an order on prepayment of expenses.

(Conditions for Recognition of Foreign Insolvency Proceedings)

Article 21 If any of the following items applies, the court shall dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings:

(i) where the expenses for recognition and assistance proceedings are not prepaid;

(ii) where it is obvious that the effect of the foreign insolvency proceedings does not extend to the debtor's property in Japan;

(iii) where it is contrary to public policy in Japan to render a disposition of assistance for the foreign insolvency proceedings pursuant to the provisions of the following Chapter;

(iv) where it is obviously unnecessary to render a disposition of assistance for the foreign insolvency proceedings pursuant to the provisions of the following Chapter;

(v) where the foreign trustee, etc. has violated the provisions of Article 17, paragraph (3), except where such violation is minor; or

(vi) where it is obvious that the petition was filed for an unjustifiable purpose or was not filed in good faith.

(Order of Recognition of Foreign Insolvency Proceedings)

Article 22 (1) Where a petition for recognition of foreign insolvency proceedings which meets the requirements prescribed in Article 17, paragraph (1) is filed and a decision to commence such proceedings is made, the court shall issue an order of recognition of foreign insolvency proceedings, except where it dismisses the petition with prejudice on the merits pursuant to the provisions of the preceding Article, Article 57, paragraph (1) or Article 62, paragraph (1).

(2) The order set forth in the preceding paragraph shall be effective from the time it is made.

(Public Notice, etc. of Recognition of Foreign Insolvency Proceedings)

Article 23 (1) The court, when it has issued an order of recognition of foreign insolvency proceedings, shall immediately provide public notice of the main text of the order.

(2) A document stating the main text of an order of recognition of foreign insolvency proceedings shall be served upon the foreign trustee, etc. In cases where a disposition is rendered under the provisions of Article 51, paragraph (1) (including cases where applied mutatis mutandis pursuant to paragraph (3) of said Article), such document shall be served upon a provisional administrator.

(3) The persons listed in the following items shall be provided with notice to the effect that an order of recognition of foreign insolvency proceedings has been issued; provided, however, that this shall not apply to any person who has already been provided with notice under the provisions of the main clause of Article 25, paragraph (9) (including cases where applied mutatis mutandis pursuant to Article 26, paragraph (6), Article 27, paragraph (8), Article 52, paragraph (5), and Article 58, paragraph (7)):

(i) government agencies or public offices having jurisdiction over taxes and other public charges, which are specified by the Rules of the Supreme Court; and

(ii) labor unions consisting of the majority of the debtor's employees and other workers in Japan, if there are any such labor unions, or the representative of the majority of the debtor's employees and other workers in Japan if there is no labor union comprising a majority of the debtor's employees and other workers in Japan.

(Immediate Appeal, etc.)

Article 24 (1) An immediate appeal may be filed against a judicial decision on a petition for recognition of foreign insolvency proceedings.

(2) If an immediate appeal as set forth in the preceding paragraph is filed and an order to revoke the order of recognition of foreign insolvency proceedings becomes final and binding, the court that issued said order of recognition of foreign insolvency proceedings shall immediately give public notice of the main text of the revocation order and serve a document containing the main text upon the foreign trustee, etc.

(3) When an order to revoke an order of recognition of foreign insolvency proceedings becomes final and binding, a stay order under the provisions of paragraph (1) or paragraph (2) of the following Article, a disposition under the provisions of Article 26, paragraph (1) or paragraph (2), a stay order under the provisions of Article 27, paragraph (1) or paragraph (2), a prohibition order under the provisions of Article 28, paragraph (1) and a disposition under the provisions of Article 32, paragraph (1) shall cease to be effective.

Chapter III Disposition of Assistance for Foreign Insolvency Proceedings

(Stay Order, etc. on Other Procedures and Proceedings)

Article 25 (1) The court may, when it finds it necessary in order to achieve the purpose of the recognition and assistance proceedings, upon the petition of an interested person or by its own authority, order a stay on the following procedures or proceedings, upon issuing an order of recognition of foreign insolvency proceedings or after issuing such order:

(i) a procedure for compulsory execution, provisional seizure or provisional disposition (hereinafter referred to as "compulsory execution, etc.") which has already been initiated against the debtor's property (limited to property which exists in Japan; hereinafter the same shall apply in this paragraph);

(ii) court proceedings in an action relating to the debtor's property; and

(iii) a procedure in a case relating to the debtor's property that is pending before an administrative agency.

(2) Where a petition for recognition of foreign insolvency proceedings is filed, the court may issue a stay order under the provisions of the preceding paragraph even before issuing an order on the petition. The same shall apply where an immediate appeal set forth in paragraph (1) of the preceding Article is filed against an order to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings.

(3) A stay order under the provisions of the preceding paragraph shall cease to be effective when an order is issued to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings or dismiss with prejudice on the merits an immediate appeal as set forth in said paragraph.

(4) The court may change or revoke a stay order issued under the provisions of paragraph (1) or paragraph (2).

(5) The court may, when it finds it particularly necessary in order to achieve the purpose of the recognition and assistance proceedings, upon the petition of the debtor (limited to a debtor who has no foreign trustee) or of a recognition trustee or by its own authority, order the revocation of the procedure for compulsory execution, etc. stayed under the provisions of paragraph (1) or paragraph (2), while requiring or not requiring the provision of security; provided, however, that the revocation of the procedure for compulsory execution, etc. stayed under the provisions of paragraph (2) may be ordered only after an order of recognition of foreign insolvency proceedings is made.

(6) An immediate appeal may be filed against a stay order issued under the provisions of paragraph (1) or paragraph (2), an order issued under the provisions of paragraph (4) or a revocation order issued under the provisions of the preceding paragraph.

(7) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(8) Where a judicial decision prescribed in paragraph (6) and a judicial decision on the immediate appeal set forth in said paragraph are made, the written decisions shall be served upon the parties concerned. In this case, the provisions of the main clause under Article 8, paragraph (3) shall not apply.

(9) The persons listed under Article 23, paragraph (3) shall be given notice to the effect that a stay order is issued under the provision of paragraph (2); provided, however, that this shall not apply to any person who has already been given a notice under the provision of the proviso to paragraph (3) of said Article.

(Prohibition of Disposition of Property, Prohibition of Payment and Other Dispositions)

Article 26 (1) The court may, when it finds it necessary in order to achieve the purpose of the recognition and assistance proceedings, upon the petition of an interested person or by its own authority, render a disposition prohibiting a disposition of property, a disposition prohibiting payment and any other disposition with regard to the debtor's business and property in Japan, upon issuing an order of recognition of foreign insolvency proceedings or after issuing such order.

(2) Where a petition for recognition of foreign insolvency proceedings is filed, the court may render a disposition under the provisions of the preceding paragraph even before issuing an order on the petition. The same shall apply where the immediate appeal set forth in Article 24, paragraph (1) is filed against an order to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings.

(3) The disposition under the provisions of the preceding paragraph shall cease to be effective when an order is issued to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings or to dismiss with prejudice on the merits an immediate appeal set forth in said paragraph.

(4) The court may change or revoke a disposition rendered under the provisions of paragraph (1) or paragraph (2).

(5) Where the court, pursuant to the provisions of paragraph (1) or paragraph (2), has rendered a disposition prohibiting the debtor from making payments to a creditor or from engaging in any other act involving a creditor intended to cause his/her debt to be extinguished, the creditor may not assert, in relation to the recognition and assistance proceedings, the effect of the payment or any other act to cause the debt to be extinguished which is made or engaged in violation of the disposition; provided, however, that this shall apply only if the creditor knew, at the time such act was committed, the fact that the disposition was rendered.

(6) The provisions of paragraph (6) to paragraph (8) of the preceding Article shall apply mutatis mutandis to a disposition under the provisions of paragraph (1) or paragraph (2) and to an order under the provisions of paragraph (4); the provisions of paragraph (8) of said Article shall apply mutatis mutandis where a judicial decision is rendered on an immediate appeal set forth in paragraph (6) of said Article as applied mutatis mutandis pursuant to this paragraph; and the provision of paragraph (9) of said Article shall apply mutatis mutandis where a disposition is rendered under the provisions of paragraph (2).

(Stay Order on Procedures for Exercising Security Interests, etc.)

Article 27 (1) The court may, upon the petition of an interested person or by its own authority, specify a reasonable period and order a stay on a procedure for exercising any security interest or on a procedure for the exercise of an enterprise mortgage, which has already been initiated against the debtor's property, upon issuing an order of recognition of foreign insolvency proceedings or after issuing such an order, when it finds that the stay on the procedure conforms to the common interests of creditors and is not likely to cause undue damage to an auction applicant or a petitioner for a procedure for the exercise of an enterprise mortgage.

(2) Where a petition for recognition of foreign insolvency proceedings is filed, the court may issue a stay order under the provisions of the preceding paragraph even before issuing an order on the petition. The same shall apply where an immediate appeal set forth in Article 24, paragraph (1) is filed against an order dismissing with prejudice on the merits a petition for recognition of foreign insolvency proceedings.

(3) The stay order under the provisions of the preceding paragraph shall cease to be effective when an order is made to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings or to dismiss with prejudice on the merits an immediate appeal set forth in said paragraph.

(4) The court shall, when issuing a stay order under the provisions of paragraph (1) or paragraph (2), hear the opinions of the auction applicant or the petitioner for the procedure for the exercise of the enterprise mortgage.

(5) The court may change or revoke a stay order issued under the provisions of paragraph (1) or paragraph (2).

(6) Only the auction applicant or the petitioner for the procedure for exercising the enterprise mortgage may file an immediate appeal against a stay order under the provisions of paragraph (1) or paragraph (2) or against an order to change the order made under the provisions of the preceding paragraph,.

(7) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(8) The provisions of Article 25, paragraph (8) shall apply mutatis mutandis where a stay order under the provisions of paragraph (1) or paragraph (2), an order under the provisions of paragraph (5) or a judicial decision on the immediate appeal set forth in paragraph (6) is made, and the provisions of paragraph (9) of said Article shall apply mutatis mutandis where a stay order is issued under the provisions of paragraph (2).

(Prohibition Order on Compulsory Execution, etc.)

Article 28 (1) The court may, when it finds it necessary in order to achieve the purpose of the recognition and assistance proceedings, upon the petition of an interested person or by its own authority, issue an order prohibiting all creditors from enforcing compulsory execution, etc. against the debtor's property, upon issuing an order of recognition of foreign insolvency proceedings or after issuing such an order. In this case, the court, when it finds it appropriate, may exclude compulsory execution, etc. based on a certain range of claims or compulsory execution, etc. against a certain range of the debtor's property from the scope of the prohibition order.

(2) Where a prohibition order under the provisions of the preceding paragraph (hereinafter referred to as a "prohibition order on compulsory execution, etc.") is issued, the procedure for compulsory execution, etc. already initiated against the debtor's property (limited to the procedure that is to be prohibited by the prohibition order) shall be stayed.

(3) The court may change or revoke a prohibition order on compulsory execution, etc.

(4) The court may order the revocation of the procedure stayed under the provision of paragraph (2) when it finds it particularly necessary in order to achieve the purpose of the recognition and assistance proceedings, upon the petition of the debtor (limited to a debtor who has no foreign trustee) or recognition trustee or by its own authority, and may or may not require that security be provided.

(5) An immediate appeal may be filed against a prohibition order on compulsory execution, etc., an order made under the provisions of paragraph (3) or a revocation order issued under the provisions of the preceding paragraph.

(6) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(7) When a prohibition order on compulsory execution, etc. is issued, the prescription shall not be completed with regard to a claim against the debtor (limited to such claim for which compulsory execution, etc. is prohibited by the prohibition order) until the day on which two months have elapsed since the day following the day on which the prohibition order ceases to be effective.

(Public Notice and Service, etc., Concerning Prohibition Orders on Compulsory Execution, etc.)

Article 29 (1) Where a prohibition order on compulsory execution, etc. is issued and an order to change or revoke said order is made, public notice shall be given regarding the main texts of these orders, and the written orders shall be served upon the foreign trustee, etc., recognition trustee and petitioner.

(2) When the court has simultaneously issued a prohibition order on compulsory execution, etc. and an order of recognition of foreign insolvency proceedings, it shall include the main text of the prohibition order on compulsory execution, etc. in the public notice under the provisions of Article 23, paragraph (1). In this case, public notice under the provisions of the preceding paragraph shall not be required.

(3) In the case referred to in paragraph (1), the foreign trustee, etc. who has received the service of the written order set forth in said paragraph shall take necessary measures to make public the contents of the written order among known creditors.

(4) A prohibition order on compulsory execution, etc. and an order to change or revoke a prohibition order, shall be effective as of the time that written orders are served upon a foreign trustee, etc. (or a recognition trustee if any recognition trustee is appointed).

(5) Where a revocation order under the provisions of paragraph (4) of the preceding Article is issued and a judicial decision on the immediate appeal set forth in paragraph (5) of said Article (excluding an order to change or revoke a prohibition order on compulsory execution, etc.) is rendered, the written order/decision shall be served upon the parties concerned.

(Cancellation of Prohibition Order on Compulsory Execution, etc.)

Article 30 (1) When the court finds, after issuing a prohibition order on compulsory execution, etc., that the order is likely to cause undue damage to the creditor who filed a petition for compulsory execution, etc., the court may, upon the petition of said creditor, issue an order cancelling the prohibition order on compulsory execution, etc. with regard to said creditor. In this case, the creditor may enforce compulsory execution, etc. against the debtor's property, and any procedure for compulsory execution, etc. initiated by the creditor prior to the issuance of the prohibition order on compulsory execution, etc. shall be continued.

(2) For the purpose of applying the provisions of Article 28, paragraph (7) to a person who has obtained a cancellation order under the provisions of the preceding paragraph, the phrase "the day on which the prohibition order ceases to be effective" in Article 28, paragraph (7) shall be deemed to be replaced with "the day on which a cancellation order under the provisions of Article 30, paragraph (1) becomes effective."

(3) An immediate appeal may be filed against a judicial decision on the petition set forth in paragraph (1).

(4) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(5) Where a judicial decision on the petition set forth in paragraph (1) and a judicial decision on the immediate appeal set forth in paragraph (3) are rendered, the written decisions shall be served upon the parties concerned. In this case, the provisions of the main clause of Article 8, paragraph (3) shall not apply.

(Permission for Disposition of Property, etc. by the Debtor)

Article 31 (1) If any of the following items applies, the court may, when it finds it necessary, require the debtor to obtain the permission of the court in order to dispose of his/her property in Japan or take it out of Japan or engage in any other act designated by the court; provided, however, that this shall not apply where a recognition trustee or provisional administrator is appointed:

(i) where a stay order under the provisions of Article 25, paragraph (1) or paragraph (2), a disposition under the provisions of Article 26, paragraph (1) or paragraph (2), a stay order under the provisions of Article 27, paragraph (1) or paragraph (2), a prohibition order on compulsory execution, etc. or a stay order under the provisions of Article 57, paragraph (2), Article 58, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 58, paragraph (2)), Article 59, paragraph (1), item (i), Article 60, paragraph (1) or Article 63, paragraph (1) is issued; or

(ii) where there exist recognition and assistance proceedings in relation to secondary foreign proceedings that are stayed pursuant to the provisions of Article 62, paragraph (2).

(2) The court may grant the permission set forth in the preceding paragraph only where it finds that the debtor's act is unlikely to cause undue harm to creditors' interests in Japan.

(3) Any juridical act engaged in without the permission set forth in paragraph (1) shall be void; provided, however, that this may not be asserted against a third party without knowledge.

(Administration Order)

Article 32 (1) The court may, when it finds it necessary in order to achieve the purpose of the recognition and assistance proceedings, upon the petition of an interested person or by its own authority, render a disposition to order that the debtor's business and property in Japan be administered by a recognition trustee, upon issuing an order of recognition of foreign insolvency proceedings or after issuing such order.

(2) The court, when it renders a disposition set forth in the preceding paragraph (hereinafter referred to as an "administration order"), shall appoint one or more recognition trustees in the administration order.

(3) A juridical person may serve as a recognition trustee.

(4) The court may change or revoke an administration order.

(5) An immediate appeal may be filed against an administration order or an order issued under the provisions of the preceding paragraph.

(6) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(Public Notice and Service, etc. Concerning Administration Order)

Article 33 (1) The court, when it has issued an administration order, shall give public notice of the following matters, except in the cases prescribed in the following paragraph:

(i) the fact that an administration order has been issued and the name of the recognition trustee; and

(ii) an indication to the effect that a person who possesses the debtor's property (limited to property which exists in Japan) and who owes a debt to the debtor (limited to a debt arising from a claim which exists in Japan) (referred to as a "possessor of property, etc." in paragraph (6)) shall not deliver the property or make payment to the debtor.

(2) In the case where the court has issued an administration order at the same time as issuing an order of recognition of foreign insolvency proceedings, it shall include the matters listed in the preceding paragraph in the public notice to be given pursuant to the provisions of Article 23, paragraph (1).

(3) The court, when it has issued an order to change or revoke an administration order, shall give public notice to that effect.

(4) Where an administration order is issued, an order set forth in the preceding paragraph is issued, or a judicial decision on the immediate appeal set forth in paragraph (5) of the preceding Article is rendered, the written orders/decision shall be served upon the parties concerned.

(5) An administration order and an order to change or revoke said order shall be effective as of the time of their service in writing upon a recognition trustee.

(6) Where an administration order is issued, notice shall be given to known possessors of property, etc. with regard to the matters listed in paragraph (1). Where an order set forth in paragraph (3) is issued or where an order to revoke the order of recognition of foreign insolvency proceedings has become final and binding after the issuance of an administration order, notice shall be given of such order to known possessors of property, etc.

(7) The provisions of Article 8, paragraph (4) shall not apply where both public notice and service are required to be given with regard to an administration order.

(Powers of Recognition Trustee)

Article 34 When an administration order is issued, the right to carry out the debtor's business and to administer and dispose of the rehabilitation debtor's property in Japan shall be vested exclusively in a recognition trustee.

(Permission to Dispose of Property, etc. by Recognition Trustee)

Article 35 (1) A recognition trustee shall obtain the permission of the court in order to dispose of the debtor's property in Japan or take it out of Japan or to perform any other act designated by the court.

(2) The court may grant the permission set forth in the preceding paragraph only where it finds that the recognition trustee's act is unlikely to cause undue harm to the creditors' interests in Japan.

(3) Any juridical act engaged in without the permission set forth in paragraph (1) shall be void; provided, however, that this may not be asserted against a third party without knowledge.

(Action Relating to the Debtor's Property Where an Administration Order Is Issued)

Article 36 (1) Where an administration order is issued, a recognition trustee shall stand as the plaintiff or defendant in an action relating to the debtor's property in Japan.

(2) Where an administration order is issued, any action relating to the debtor's property in Japan in which the debtor stands as a party shall be discontinued.

(3) A recognition trustee may take over the action discontinued under the provisions of the preceding paragraph. A petition for taking over of action may also be filed by the opponent.

(4) When an administration order ceases to be effective before the action discontinued under the provisions of paragraph (2) is taken over under the provisions of the preceding paragraph, the debtor shall automatically take over the action.

(5) When an administration order has ceased to be effective after the action discontinued under the provisions of paragraph (2) is taken over under the provisions of paragraph (3), the action shall be discontinued.

(6) In the case referred to in the preceding paragraph, the debtor shall take over the action. In this case, a petition for taking over of action may also be filed by the opponent.

(Case Pending Before an Administrative Agency)

Article 37 The provisions of paragraph (2) to paragraph (6) of the preceding Article shall apply mutatis mutandis to a case relating to the debtor's property in Japan that is pending before an administrative agency at the time that an administration order is issued.

(Supervision of Recognition Trustee, etc.)

Article 38 (1) A recognition trustee shall be supervised by the court.

(2) The court, upon the petition of an interested person or by its own authority, may dismiss a recognition trustee if there are any material reasons to do so. In this case, the court shall interrogate the recognition trustee.

(Performance of Duties by Two or More Recognition Trustees)

Article 39 (1) If there are two or more recognition trustees, they shall perform their duties jointly; provided, however, that with the permission of the court, they may perform their duties severally or divide their duties among them.

(2) If there are two or more recognition trustees, it shall be sufficient for a manifestation of intention by a third party to be made to any one of them.

(Recognition Trustee Representative)

Article 40 (1) A recognition trustee may, if necessary, appoint one or more recognition trustee representatives on his/her own responsibility, in order to have them perform his/her duties.

(2) The appointment of a recognition trustee representative as set forth in the preceding paragraph shall require the permission of the court.

(3) The provisions of Article 35 shall apply mutatis mutandis to a recognition trustee representative.

(Investigation by Recognition Trustee)

Article 41 (1) A recognition trustee may request the following persons to report on the status of the debtor's business and property in Japan, and may inspect the debtor's books, documents and other articles:

(i) the debtor;

(ii) the debtor's agent;

(iii) in cases where the debtor is a juridical person, its director, executive officer, inspector, auditor or liquidator;

(iv) any other person equivalent to the persons listed in the preceding item; or

(v) an employee of the debtor (excluding a person falling under item (ii)).

(2) The provisions of the preceding paragraph shall apply mutatis mutandis to a person who was any of the persons listed in the items of said paragraph (excluding item (i)).

(3) A recognition trustee, when necessary in order to perform his/her duties, may request a subsidiary company, etc. (meaning a juridical person as specified in each of the following items for the cases described in the respective items; the same shall apply in the following paragraph) of the debtor to report on the status of its business and property in Japan, or may inspect its books, documents and other articles:

(i) where the debtor is a stock company: a subsidiary company (meaning a subsidiary company as prescribed in Article 2, item (iii) of the Companies Act) of the debtor; and

(ii) where the debtor is a person other than a stock company: a stock company in which the debtor holds a majority of the voting rights (excluding the voting rights of shares which may not be exercised for all matters that may be resolved at a shareholders' meeting, and including the voting rights of shares for which the shareholder is deemed to have voting rights pursuant to the provisions of Article 879, paragraph (3) of the Companies Act; hereinafter the same shall apply in the following paragraph) of all the shareholders.

(4) Where a subsidiary company, etc. of the debtor (limited to a debtor that is a person other than a stock company; hereinafter the same shall apply in this paragraph) independently holds or the debtor and the debtor's subsidiary company, etc. jointly hold a majority of the voting rights of all the shareholders of another stock company, for the purpose of applying the provisions of the preceding paragraph, such other stock company shall be deemed to be a subsidiary company of the debtor.

(Administration of the Debtor's Business and Property)

Article 42 A recognition trustee shall commence the administration of the debtor's business and property in Japan immediately after assuming office.

(Management of Postal Items, etc.)

Article 43 (1) When the court finds it necessary in order for a recognition trustee to perform his/her duties, it may commission a person engaged in correspondence delivery to deliver, to a recognition trustee, a postal item or letter as prescribed in Article 2, paragraph (3) of the Act on Correspondence Delivery by Private Business Operators (Act No. 99 of 2002) (referred to as a "postal item, etc." in the following Article) that is addressed to the debtor.

(2) The court, upon the petition of the debtor or by its own authority, may cancel or change the commission prescribed in the preceding paragraph, after hearing opinions from a recognition trustee.

(3) When an administration order ceases to be effective, the court shall cancel the commission prescribed in paragraph (1).

(4) A foreign trustee, etc. or recognition trustee may file an immediate appeal against an order issued under the provisions of paragraph (1) or paragraph (2) or a judicial decision to dismiss without prejudice the petition set forth in paragraph (2).

(5) The immediate appeal set forth in the preceding paragraph filed against an order issued under the provisions of paragraph (1) shall not have the effect of a stay of execution.

Article 44 (1) A recognition trustee, upon receiving a postal item, etc. addressed to the debtor, may open it and view its contents.

(2) The debtor may request that a recognition trustee allow him/her to inspect the postal item, etc. set forth in the preceding paragraph received by the recognition trustee, or that the recognition trustee deliver it to him/her, if such postal item, etc. does not relate to the debtor's property in Japan.

(Recognition Trustee's Duty of Care)

Article 45 (1) A recognition trustee shall perform his/her duties with the due care of a prudent manager.

(2) If a recognition trustee(s) fails to have the due care set forth in the preceding paragraph, the recognition trustee(s) shall be jointly and severally liable to compensate any interested person for damages resulting from such failure.

(Recognition Trustee's Duty to Report)

Article 46 A recognition trustee, as provided for by the court, shall report to the court the status of the administration of the debtor's business and property in Japan and any other matters ordered by the court.

(Restriction on Recognition Trustee's Acts)

Article 47 (1) A recognition trustee may not accept the debtor's property or assign his/her own property to the debtor, or engage in any other transaction with the debtor on behalf of him/herself or a third party without the permission of the court,.

(2) Any act engaged in without the permission set forth in the preceding paragraph shall be void; provided, however, that this may not be asserted against a third party without knowledge.

(Debtor's Acts after Issuance of an Administration Order)

Article 48 (1) A juridical act engaged in by a debtor after the issuance of an administration order with respect to the debtor's property which a recognition trustee has the right to administer and dispose of may not be asserted as effective in relation to recognition and assistance proceedings; provided, however, that this shall not apply where the other party did not know, at the time of such act, the fact that an administration order was issued.

(2) Payment of a claim that exists in Japan, made to a debtor in Japan after the issuance of an administration order without knowledge of it, may also be asserted as effective in relation to recognition and assistance proceedings.

(3) Payment of a claim set forth in the preceding paragraph, made to the debtor in Japan after the issuance of an administration order with knowledge of it, may be asserted as effective in relation to recognition and assistance proceedings only to the extent that the debtor's property, which a recognition trustee has the right to administer and dispose of, has been enriched.

(4) For the purpose of applying the provisions of the preceding three paragraphs, the absence of knowledge of the issuance of an administration order shall be presumed prior to giving public notice under the provisions of Article 33, paragraph (1) (or a public notice given under the provisions of Article 23, paragraph (1) in cases where an administration order is issued upon issuing an order of recognition of foreign insolvency proceedings), and the existence of knowledge of the issuance of an administration order shall be presumed after such public notice.

(Remuneration for Recognition Trustee, etc.)

Article 49 (1) A recognition trustee or recognition trustee representative may receive advance payments of expenses as well as remuneration determined by the court; provided, however, that this shall not apply to a foreign trustee.

(2) A recognition trustee or recognition trustee representative shall, after being appointed, obtain the permission of the court in order to accept any claims against the debtor or any shares of the debtor or any other contributions to the debtor, or assign these.

(3) A recognition trustee or recognition trustee representative may not receive payment of expenses and remuneration if he/she has engaged in any act prescribed in the preceding paragraph without obtaining the permission set forth in said paragraph.

(4) An immediate appeal may be filed against an order issued under the provision of paragraph (1).

(Recognition Trustee's Duty to Report upon Termination of Office, etc.)

Article 50 (1) A recognition trustee, upon the termination of his/her office, shall submit a report of account to the court without delay.

(2) In the case referred to in the preceding paragraph, if there is a vacancy in the office of recognition trustee, the report of account set forth in said paragraph, notwithstanding the provisions of said paragraph, shall be submitted by a successor recognition trustee.

(3) Upon the termination of a recognition trustee's office, if there are pressing circumstances, the recognition trustee or his/her successor shall take necessary measures until a successor recognition trustee or the debtor is able to administer the property.

(Provisional Administration Order)

Article 51 (1) Where a petition for recognition of foreign insolvency proceedings is filed, the court may, upon the petition of an interested person or by its own authority, render a disposition to order that the debtor's business and property in Japan be administered by a provisional administrator until an order is issued on the petition for recognition of foreign insolvency proceedings when the court finds it particularly necessary in order to achieve the purpose of the recognition and assistance proceedings.

(2) The court, when it renders a disposition under the provisions of the preceding paragraph (hereinafter referred to as a "provisional administration order"), shall appoint one or more provisional administrators in the provisional administration order.

(3) The provisions of the preceding two paragraphs shall apply mutatis mutandis where an immediate appeal set forth in Article 24, paragraph (1) is filed against an order to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings.

(4) The court may change or revoke a provisional administration order.

(5) An immediate appeal may be filed against a provisional administration order or an order issued under the provisions of the preceding paragraph.

(6) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(Public Notice and Service, etc. Concerning Provisional Administration Order)

Article 52 (1) The court, when it has issued a provisional administration order, shall give public notice to that effect. The same shall apply where the court issues an order to change or revoke a provisional administration order.

(2) Where a provisional administration order or an order under the provisions of paragraph (4) of the preceding Article is issued, and a judicial decision on the immediate appeal set forth in paragraph (5) of said Article is made, the written orders/decision shall be served upon the parties concerned.

(3) A provisional administration order and an order to change or revoke said order shall become effective as of the time that the written orders are served upon a provisional administrator.

(4) The provisions of Article 8, paragraph (4) shall not apply where both public notice and service are required to be given with regard to a provisional administration order.

(5) The provisions of Article 25, paragraph (9) shall apply mutatis mutandis where a provisional administration order is issued.

(Powers of the Provisional Administrator)

Article 53 (1) When a provisional administration order is issued, the right to carry out the debtor's business and to administer and dispose of the debtor's property in Japan shall be vested exclusively in a provisional administrator; provided, however, that a provisional administrator shall obtain the permission of the court in order to engage in any act that does not fall within the scope of the debtor's ordinary business.

(2) Any act engaged in without the permission set forth in the proviso to the preceding paragraph shall be void; provided, however, that this may not be asserted against a third party without knowledge.

(Provisional Administrator Representative)

Article 54 (1) A provisional administrator may, if necessary, appoint one or more provisional administrator representatives on his/her own responsibility, in order to have them perform his/her duties.

(2) The appointment of a provisional administrator representative as set forth in the provisions of the preceding paragraph shall require the permission of the court.

(Application Mutatis Mutandis of the Provisions on Recognition Trustees to Provisional Administrators, etc.)

Article 55 (1) The provisions of Article 32, paragraph (3), Article 35, Article 36, paragraph (1), Article 38, Article 39, Article 41, Article 42, and Article 44 to Article 50 shall apply mutatis mutandis to a provisional administrator, and the provisions of Article 40, paragraph (3) and Article 49 shall apply mutatis mutandis to a provisional administrator representative. In this case, the term "successor recognition trustee" in Article 50, paragraph (2) shall be deemed to be replaced with "successor provisional administrator or recognition trustee," and the term "successor recognition trustee" in Article 50, paragraph (3) shall be deemed to be replaced with "successor provisional administrator or recognition trustee."

(2) The provisions of Article 36, paragraph (2) to paragraph (6) shall apply mutatis mutandis to an action relating to the debtor's property in Japan that is pending at the time that a provisional administration order is issued, and to a case relating to the debtor's property in Japan that is pending before an administrative agency at the time that a provisional administration order is issued.

Chapter IV Rescission of Recognition of Foreign Insolvency Proceedings

Article 56 (1) If any of the following items applies, the court, upon the petition of an interested person or by its own authority, shall issue an order of rescission of recognition of foreign insolvency proceedings:

(i) where it has become obvious that the petition for recognition of the foreign insolvency proceedings fails to meet the requirements prescribed in Article 17, paragraph (1);

(ii) where it has become obvious that any of the grounds prescribed in Article 21, item (ii) to item (vi) exist with regard to the foreign insolvency proceedings;

(iii) where the foreign insolvency proceedings are closed with a decision equivalent to an order of termination of bankruptcy proceedings, order of confirmation of the rehabilitation plan, order of confirmation of the reorganization plan or order of termination of special liquidation proceedings being issued; or

(iv) where the foreign insolvency proceedings are closed for reasons other than those prescribed in the preceding item.

(2) If any of the following items applies, the court, upon the petition of an interested person or by its own authority, may issue an order of rescission of recognition of the foreign insolvency proceedings:

(i) where the debtor has violated the provisions of Article 31, paragraph (1);

(ii) where a foreign trustee who is a recognition trustee has violated the provisions of Article 35, paragraph (1) or Article 46; or

(iii) where a foreign trustee who is not a recognition trustee has disposed of the debtor's property in Japan or has taken it out of Japan.

(3) The court, when it has issued a rescission order as set forth in the preceding two paragraphs, shall give public notice of the main text of the order and attach a summary of the reasons for it.

(4) An immediate appeal may be filed against a rescission order set forth in paragraph (1) or paragraph (2).

(5) When an order to revoke the rescission order set forth in paragraph (1) or paragraph (2) becomes final and binding, the court that issued the rescission order set forth in paragraph (1) or paragraph (2) shall immediately give public notice to that effect.

(6) A rescission order set forth in paragraph (1) or paragraph (2) shall not be effective unless it becomes final and binding.

(7) The provisions of Article 24, paragraph (3) shall apply mutatis mutandis where a rescission order set forth in paragraph (1) or paragraph (2) becomes final and binding.

Chapter V Treatment of Cases of in Which Other Insolvency Proceedings Exist

Section 1 Treatment of Cases in which Domestic Insolvency Proceedings Exist

(Conditions, etc. for Recognition Where an Order of Commencement of Domestic Insolvency Proceedings Is Issued)

Article 57 (1) If it becomes obvious, before issuing an order on a petition for recognition of foreign insolvency proceedings, that there exist domestic insolvency proceedings for which an order of commencement has been issued against the same debtor, the court shall dismiss the petition with prejudice on the merits, except where all of the following requirements are met:

(i) the foreign insolvency proceedings are primary foreign proceedings;

(ii) rendering a disposition of assistance for the foreign insolvency proceedings under the provisions of Chapter III is found to conform to the common interests of creditors; and

(iii) it is unlikely that undue harm will be caused to the creditors' interests in Japan by rendering a disposition of assistance for the foreign insolvency proceedings under the provisions of Chapter III.

(2) Where the existence of the domestic insolvency proceedings prescribed in the preceding paragraph has become obvious, the court set forth in said paragraph shall, when it issues an order of recognition of foreign insolvency proceedings, order a stay of the domestic insolvency proceedings; provided, however, that this shall not apply if the domestic insolvency proceedings have been stayed pursuant to the provision of paragraph (1) of the following Article (including cases where applied mutatis mutandis pursuant to paragraph (2) of said Article).

(3) The court may revoke a stay order issued under the provisions of the preceding paragraph.

(4) An immediate appeal may be filed against a stay order issued under the provisions of paragraph (2) or an order issued under the provisions of the preceding paragraph.

(5) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(6) Where a judicial decision prescribed in paragraph (4) and a judicial decision on the immediate appeal set forth in said paragraph are made, the written decisions shall be served upon the parties concerned.

(Stay Order for Domestic Insolvency Proceedings Before Issuance of an Order of Recognition of Foreign Insolvency Proceedings)

Article 58 (1) The court before which recognition and assistance proceedings are pending may, when it finds it necessary before issuing an order on a petition for recognition of foreign insolvency proceedings, upon the petition of an interested person or by its own authority, order a stay of the domestic insolvency proceedings against the same debtor; provided, however, that this shall only apply in cases where all of the requirements listed in the items under paragraph (1) of the preceding Article are met.

(2) The provisions of the preceding paragraph shall apply mutatis mutandis where an immediate appeal set forth in Article 24, paragraph (1) is filed against an order to dismiss with prejudice on the merits a petition for recognition of foreign insolvency proceedings.

(3) The court may change or revoke a stay order issued under the provisions of paragraph (1) (including cases where applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same shall apply in this Article and Article 61, paragraph (1)).

(4) An immediate appeal may be filed against a stay order issued under the provision of paragraph (1) or an order issued under the provisions of the preceding paragraph.

(5) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(6) Where a judicial decision prescribed in paragraph (4) and a judicial decision on the immediate appeal set forth in said paragraph are rendered, the written decisions shall be served upon the parties concerned.

(7) The provisions of Article 25, paragraph (9) shall apply mutatis mutandis where a stay order is issued under the provision of paragraph (1).

(Coordination in the Event of Conflict Between an Order of Recognition of Foreign Insolvency Proceedings and an Order of Commencement of Domestic Insolvency Proceedings)

Article 59 (1) Where it becomes obvious, after an order of recognition of foreign insolvency proceedings is issued, that an order of commencement of domestic insolvency proceedings has been issued against the same debtor before or after said recognition order, the court before which recognition and assistance proceedings are pending shall issue an order specified in each of the following items in the cases listed in the respective items:

(i) where all of the requirements listed in the items of Article 57, paragraph (1) are met: an order to stay the domestic insolvency proceedings; or

(ii) where the preceding item does not apply: an order to stay the recognition and assistance proceedings.

(2) The court may revoke an order issued under the provision of the preceding paragraph.

(3) An immediate appeal may be filed against an order issued under the provisions of the preceding two paragraphs.

(4) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(5) Where a judicial decision as prescribed in paragraph (3) and a judicial decision on the immediate appeal set forth in said paragraph are rendered, the written decisions shall be served upon the parties concerned.

(Coordination Between an Order of Recognition of Foreign Insolvency Proceedings and Domestic Insolvency Proceedings Before an Order of Commencement)

Article 60 (1) Where it becomes obvious, after an order of recognition of foreign insolvency proceedings was made, that a petition for commencement of domestic insolvency proceedings has been filed against the same debtor (excluding the case prescribed in paragraph (1) of the preceding Article), the court before which the recognition and assistance proceedings are pending shall issue an order specified in item (i) of said paragraph in the case set forth in said item.

(2) Where it becomes obvious, after an order of recognition of foreign insolvency proceedings was issued, that a petition for commencement of domestic insolvency proceedings has been filed against the same debtor (excluding the case prescribed in paragraph (1) of the preceding Article), the court before which recognition and assistance proceedings are pending may issue an order specified in item (ii) of paragraph (1) of the preceding Article when it finds it necessary in the case set forth in said item, upon the petition of an interested person or by its own authority.

(3) The court may change an order issued under the provisions of the preceding paragraph or revoke an order issued under the provisions of the preceding two paragraphs.

(4) An immediate appeal may be filed against an order issued under the provisions of the preceding three paragraphs.

(5) The immediate appeal set forth in the preceding paragraph shall not have the effect of a stay of execution.

(6) Where a judicial decision prescribed in paragraph (4) and a judicial decision on the immediate appeal set forth in said paragraph are rendered, the written decisions shall be served upon the parties concerned.

(Loss of Effect of Stayed Domestic Insolvency Proceedings and Recognition and Assistance Proceedings)

Article 61 (1) Where domestic insolvency proceedings have been stayed under the provisions of Article 57, paragraph (2), Article 58, paragraph (1), Article 59, paragraph (1), item (i) or paragraph (1) of the preceding Article, when an order of rescission of recognition of foreign insolvency proceedings issued with regard to the same debtor under the provisions of Article 56, paragraph (1), item (iii) becomes final and binding, such stayed domestic insolvency proceedings shall cease to be effective.

(2) Where recognition and assistance proceedings in relation to foreign insolvency proceedings have been stayed under the provisions of Article 59, paragraph (1), item (ii) or paragraph (2) of the preceding Article, when an order of termination of bankruptcy proceedings is issued with regard to the debtor or when an order of confirmation of the rehabilitation plan, order of confirmation of the reorganization plan or order of termination of special liquidation proceedings issued with regard to the debtor becomes final and binding, such stayed recognition and assistance proceedings shall cease to be effective.

Section 2 Treatment of Cases in which Recognition and Assistance Proceedings in relation to Other Foreign Insolvency Proceedings Exist

(Conditions, etc. for Recognition Where Other Foreign Insolvency Proceedings Are Recognized)

Article 62 (1) Where a petition for recognition of foreign insolvency proceedings is filed, if there exist recognition and assistance proceedings in relation to other foreign insolvency proceedings against the same debtor for which orders of recognition have already been issued, the court shall also dismiss the petition with prejudice on the merits if any of the following items applies:

(i) where the other foreign insolvency proceedings are primary foreign proceedings; or

(ii) in cases other than the case set forth in the preceding item, where the foreign insolvency proceedings for which the petition is filed are secondary foreign proceedings, and rendering a disposition of assistance for the foreign insolvency proceedings under the provisions of Chapter III is found not to conform to the common interests of creditors.

(2) Where an order of recognition of foreign insolvency proceedings is issued, if there exist other secondary foreign proceedings for which an order of recognition of foreign insolvency proceedings has been issued with regard to the same debtor, the recognition and assistance proceedings in relation to the secondary foreign proceedings shall be stayed; provided, however, that this shall not apply if a stay order has been issued under the provisions of paragraph (1) of the following Article.

(Stay Order on Other Recognition and Assistance Proceedings Before Issuance of an Order of Recognition of Foreign Insolvency Proceedings)

Article 63 (1) When the court before which recognition and assistance proceedings are pending finds it necessary prior to issuing an order on a petition for recognition of foreign insolvency proceedings, it may, upon the petition of an interested person or by its own authority, order a stay on recognition and assistance proceedings in relation to secondary foreign proceedings against the same debtor for which orders of recognition of foreign insolvency proceedings have been issued. The same shall apply when an immediate appeal as set forth in Article 24, paragraph (1) is filed against an order to dismiss with prejudice on the merits a petition for recognition of a foreign insolvency proceeding.

(2) The court may change or revoke a stay order issued under the provisions of the preceding paragraph.

(3) An immediate appeal may be filed against a stay order issued under the provisions of paragraph (1) or an order issued under the provisions of the preceding paragraph.

(4) The immediate appeal as set forth in the preceding paragraph shall not have the effect of a stay of execution.

(5) Where a judicial decision prescribed in paragraph (3) and a judicial decision on the immediate appeal set forth in said paragraph are made, the written decisions shall be served upon the parties concerned.

(Loss of Effect of Stayed Recognition and Assistance Proceedings)

Article 64 Where recognition and assistance proceedings in relation to foreign insolvency proceedings have been stayed under the provisions of Article 62, paragraph (2) or paragraph (1) of the preceding Article, such stayed recognition and assistance proceedings shall cease to be effective when an order of rescission of recognition of other foreign insolvency proceedings issued with regard to the same debtor under the provisions of Article 56, paragraph (1), item (iii) becomes final and binding,.

Chapter VI Penal Provisions

(Crime of Refusal to Report and Allow Inspection, etc.)

Article 65 (1) Where a person set forth in each item of Article 41, paragraph (1) or a person who was in the past a person set forth in item (ii) to item (v) of said paragraph has refused to report as required under the provisions of paragraph (1) of said Article as applied directly or mutatis mutandis pursuant to paragraph (2) of said Article (including cases where these provisions are applied mutatis mutandis pursuant to Article 55, paragraph (1)) or has made a false report, such person shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen, or both.

(2) The provision of the preceding paragraph shall also apply where a representative person, agent, employee or other worker (referred to as a "representative person, etc." in paragraph (4)) of a person set forth in Article 41, paragraph (1), item (ii) to item (v) or person who was in the past a person set forth in each of these items (these persons shall hereinafter be referred to as a "person under a duty to report" in this paragraph) has refused to report as required under the provisions of paragraph (1) of said Article as applied directly or mutatis mutandis pursuant to paragraph (2) of said Article (including cases where these provisions are applied mutatis mutandis pursuant to Article 55, paragraph (1)), or has made a false report, in connection with the business of the person under a duty to report,.

(3) The provisions of paragraph (1) shall also apply where the debtor or his/her statutory agent has refused an inspection under the provisions of Article 41, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)).

(4) The provisions of paragraph (1) shall also apply where a representative person, etc. of the debtor's subsidiary company, etc. prescribed in Article 41, paragraph (3) (including one that shall be deemed to be the debtor's subsidiary company, etc. pursuant to paragraph (4) of said Article; hereinafter the same shall apply in this paragraph) has refused to report or refused an inspection under the provisions of paragraph (3) of said Article (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)), or has made a false report, in connection with the business of the debtor's subsidiary company, etc.

(Crime of Obstruction of the Duties of a Recognition Trustee, etc.)

Article 66 A person who, by the use of fraudulent means or force, has obstructed the performance of the duties of a recognition trustee, provisional administrator, recognition trustee representative or provisional administrator representative shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen, or both.

(Crime of Acceptance of Bribes)

Article 67 (1) Where a recognition trustee, provisional administrator, recognition trustee representative or provisional administrator representative (referred to as a "recognition trustee, etc." in the following paragraph), has accepted, solicited or promised to accept a bribe in connection with his/her duties, he/she shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen, or both.

(2) In the case referred to in the preceding paragraph, where the recognition trustee, etc. has agreed to perform an act in response to an unlawful request, he/she shall be punished by imprisonment with work for not more than five years or a fine of not more than five million yen, or both.

(3) Where a recognition trustee or provisional administrator is a juridical person, if the officer or staff member who performs the duties of a recognition trustee or provisional administrator for the juridical person has accepted, solicited or promised to accept a bribe in connection with such duties, he/she shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen, or both. The same shall apply where a recognition trustee or provisional administrator is a juridical person and its officer or staff member has caused the recognition trustee or provisional administrator to accept or solicit or promise to accept a bribe in connection with the duties of a recognition trustee or provisional administrator.

(4) In the case referred to in the preceding paragraph, where the officer or staff member has agreed to perform an act in response to an unlawful request, he/she shall be punished by imprisonment with work for not more than five years or a fine of not more than five million yen, or both.

(5) In the cases referred to in the preceding paragraphs, a bribe accepted by the offender or by the recognition trustee or provisional administrator who is a juridical person shall be confiscated. If all or part of the bribe cannot be confiscated, the equivalent value shall be collected.

(Crime of Offering of Bribes)

Article 68 (1) A person who has given, offered or promised to offer a bribe as prescribed in paragraph (1) or paragraph (3) of the preceding Article shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen, or both.

(2) A person who has given, offered or promised to offer a bribe as prescribed in paragraph (2) or paragraph (4) of the preceding Article shall be punished by imprisonment with work for not more than five years or a fine of not more than five million yen, or both.

(Crime of Disposing of Property or Taking Property Out of Japan Without Permission)

Article 69 (1) Where the debtor is required to obtain the permission of the court under the provisions of Article 31, paragraph (1) in order to dispose of his/her property in Japan or take it out of Japan or engage in any other act designated by the court, if the debtor violates such requirement, he/she shall be punished by imprisonment with work for not more than three years or a fine of not more than three million yen.

(2) The provision of the preceding paragraph shall also apply where a recognition trustee, provisional administrator, recognition trustee representative or provisional administrator representative has violated the provisions of Article 35, paragraph (1) (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)) or the provisions of Article 35, paragraph (1) as applied mutatis mutandis pursuant to Article 40, paragraph (3) (including cases where applied mutatis mutandis pursuant to Article 55, paragraph (1)).

(Crimes Committed Outside Japan)

Article 70 (1) The crimes set forth in Article 66 and Article 68 shall be governed by the provision of Article 2 of the Penal Code (Act No. 45 of 1907).

(2) The crime set forth in Article 67 shall be governed by the provisions of Article 4 of the Penal Code.

(Joint and Several Liability)

Article 71 When the representative of a juridical person, or an agent, employee or any other person engaged by a juridical person or individual has violated Article 65 (excluding paragraph (1)), Article 66, Article 68 or Article 69 in connection with the business or property of the juridical person or individual, not only the offender but also the juridical person or individual shall be punished with the fine prescribed in the respective Articles.

Supplementary Provisions [Extract]

(Effective Date)

Article 1 This Act shall come into effect as of the day specified by Cabinet Order within a period not exceeding six months from the date of promulgation.