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Set-Off Law and Practice - An International Handbook, 3rd Edition edited by Johnston, William; Werlen, Thomas; Link, Frederick (22nd February 2018)

19 Japan

Akihiro Wani

From: Set-Off Law and Practice: An International Handbook (3rd Edition)

Edited By: William Johnston, Thomas Werlen, Frederick Link

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 22 November 2019

Subject(s):
Banks and cross-border issues — Monetary obligations — Close-out netting — Contractual set-off — Insolvency set-off — Judicial set-off

This chapter provides an overview of the law of set-off in Japan. The Japanese Civil Code classifies set-off (along with performance, release, novation, and merger) as a mechanism for extinguishing an obligation. Set-off is not categorised as a right, altough it possesses certain characteristics that would warrant treating it as a right. The chapter first considers set-off between solvent parties, focusing on statutory and contractual set-off as well as the procedures for the exercise of set-off between solvent parties, before discussing set-off against insolvent parties. It examines legislation relevant to set-off, set-off in relation to the principle of equality among creditors, set-off against attaching creditors and against assignees, triangular set-off, and close-out netting of specified financial transactions. The chapter concludes with an analysis of cross-border issues relating to applicable law on statutory set-off, contractual set-off, and set-off in insolvency proceedings.

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