Judgement of the Supreme Court, Second Petit Bench, November 12, 1999

The Supreme Court ruled on the availability of a submission order for documents concerning ringisho of a bank for the first time in its decision of November 12, 1999.

Ringisho is an internal document of companies which contains business proposals. It is circulated within the company in order to seek approval from senior executives. In the present case, the ringisho involved a proposal to extend a substantial amount of loans to an individual. It was prepared by a branch of the bank (defendant) in order to seek approval of the head office for a loan which exceeded the limits given to the branch manager in its amount and content. Usually, in such documents, in addition to the content of the loan, including the name of the borrower, amount of loan, purpose of the money, security and guarantee, method of repayment, matters such as the prospect of profitability for the bank, creditworthiness of the borrower, assessment of the borrower, and the views of the person directly in charge of the proposed loan are included. Based upon such information, the opinion of the person directly in charge on loans in the head office as well as of those who are empowered to make the final decision as to whether the loan should be extended or not is expressed in the document.

In the present case, an individual received a loan of 650 million yen from a bank and invested it in securities, but incurred a heavy loss. The plaintiff, an heir of this individual, sued the bank for extending excessive loans knowing that in the light of the financial state of this person, the interest of the loan had to be paid from the proceeds of the investment in securities. This, according to the plaintiff, was in breach of the duty to care for the safety of the customer on the part of financial institutions.

The plaintiff filed a petition to court for issuing an order to the defendant to submit the ringisho for the internal approval of the loan and the document approving the loan by the head office.

The Code of Civil Procedure which came into effect in 1998 has substantially expanded the availability of document submission orders. Thus, Article 220 provides that in the instances listed in this provision, the possessor of the document may not refuse submission of the document. In addition to specific clauses, Article 220 contains a general clause which mandates submission of a document unless, inter alia, it is solely for the use of the possessor (subpara.4 (c) ). The defendant contended that the document in question qualifies as a document solely for the use of the possessor.