This is the second case where the Supreme Court has ruled on a case involving shareholder's action since the Mitsui Mining case in 1993. 
The present case involves the compensation of loss incurred by a major customer by a securities company. In order to maintain the business with this customer, which was a major broadcasting company and held a discretionary account, the securities company compensated the losses caused to the broadcasting company by the fall in the securities market in 1990. The primary concern of the securities company was to maintain the position of the lead securities company in this broadcasting company's issue of securities. The compensation amounted to 360 million yen. The securities company managed to maintain the relationship with the customer, and later acted as a lead underwriter when the customer issued new shares, and received a commission of 120 million yen. 
The plaintiffs, who are shareholders of this securities company, sued the representative directors for the breach of duties as a director and causing loss to the company. 
The Supreme Court ruled first, that compensation of loss to specific customers was not against the Securities and Exchange Law at the time of the act (it was made illegal after the 1992 amendment). 
One of the contested issues was whether the breach of law as listed as one of the grounds for liability of directors in Article 266 of the Commercial Code included the breach of any law, or is limited to breaches of law which affect the interest of the company or shareholders. In fact, the second instance court in this case ruled that Article 19 of the Anti-Monopoly Law, which, the plaintiffs claimed, served as the basis of the directors' liability, should not be included in the 'law' in the context of Article 266 of the Commercial Code, since Article 19 of the Anti-Monopoly Law was intended to protect competitors in the market, and those whose interest is harmed by its breach are not the company. The Supreme Court ruled that all laws which are mandatory for the company are included here. It is the duty of the directors to ensure that the company does not violate the law, and if they failed, it serves as a basis of the liability of directors.