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The substantial concern decisive for this court’s attitude again seems to be about

the “security of transaction.” As implicitly suggested in the reasoning of the judgment,
the Supreme Court considered, for this category of cars, the characteristics of
the transaction to be made in the importing country where the traded car also physically

exists. Here, it might be possible to find the court’s assumption that the transaction takes
place on the legal basis of the market valid at the place where the car physically exists.

However, it is necessary to carefully distinguish the place of physical existence, that is
merely the material aspect, from the place of the market relied on by the parties, which
is a market-oriented aspect.

It is possible that, while the ownership of a movable was registered in a country,
and some transaction and finance is dealt with on the basis of this registration,

the movable is moved into another country, and other transactions are made regardless of
the registration, or on the basis of the other registration newly completed in the latter
country. Taking such a case into consideration, the preference of the Tokyo High Court

to always choose the law of registration as applicable creates some difficulty.

On the other hand, the simple application of the principle of lex loci rei sitae
by the District Court presents another difficulty for the “stability of trade,” as there is
a possible transaction type with which to proceed, regardless of the place of current

physical existence.

Faced with both of these extremes, the Supreme Court has apparently tried to
find an intermediate way, adopting the dual criteria of the place of primary use and of
the place of physical existence for the two categories of cars, based on the state ready

for use.
24

24 In the Supreme Court’s judgment, even though it refers to the “stability of trade” for both categories
of cars, there is, even though not taken seriously into consideration, a different implication of the concept for each
case in terms of the characteristics of transaction. See HARATA (supra note*) 371 note 51.

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