Page 62 - วารสารกฎหมาย ศาลอุทธรณ์คดีชํานัญพิเศษ

วารสารกฎหมาย ศาลอุทธรณ์คดีชำานัญพิเศษ

The Supreme Court explained the reason for refusal of the simple application
of the principle of lex loci rei sitae in the following manner:

“When a car is placed in use for a considerable scope and its physical location

is changing all the time, if the applicable law is determined by the physical
location of the car, the applicable law has to change together with the movements

of the car, and also because there may be difficulties in ascertaining the physical
location of the car at a specific moment, there is a problem that the determination
of the applicable law becomes unpredictable. In such cases where the connection

between the acquisition or loss of the rights over the car and the interests which
the countries of its location has become diluted, it is better to make use of

the law of the place of its primary use rather than the law of the country in which
the car physically happened to be. In cases where cars which are ready to be
placed in use are traded, the buyer may easily obtain information for finding

out the place of primary use by inspecting documents such as the car registration
or the state of the car maintenance. By acknowledging the law of the place of
its primary use rather than the law of the country in which the car physically

happened to be as the applicable law, there is greater legal transparency for
the seller [sic: N.B., in the original Japanese text of the judgment, it must be
the purchaser] and this will contribute to the safety of trading”. [underlined by

the author]

On the other hand, the Supreme Court did not fully support the view of

the Tokyo High Court, according to which the place of registration, allegedly identified
as the place in which the car was to be primarily used and to which it was to return,
should be regarded as the criterion for choice-of-law. The view justifying this refusal

was that any registration existing de facto in some other country is not in itself sufficient
for identifying the basis of a market where a transaction has legally taken place.

In fact, the Supreme Court held that, for cars such as those “which are traded
as unregistered cars with the assumption that they will be newly registered and placed

in use in the importing country, but which in fact, had been registered in another country

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