I hereby give My Sanction to the Law concerning the Special Composition for which the concurrence of the Imperial Diet has been obtained, and cause the same to be promulgated.
Signed:HIROHITO, Seal of the Emperor
This eighteenth day of the tenth month of the twenty-first year of Showa (October 18, 1946)
Countersigned: Prime Minister YOSHIDA Shigeru
Minister of Justice KIMURA Tokutaro
Law concerning Special Composition
Article 1. The aim of this Law exists in keeping stability in individual lives and maintaining wholesome enterprises of judicial persons by assigning losses impartially between obligors who have incurred gross losses in reference to the special measures regarding the war indemnity of this time and obligees for these obligors'sake.
Article 2. Those obligors who come under the provisions of the preceding article may apply for the commencement of the special composition procedure in the cases where there are or may be any causes of bankruptcy or there are possibilities of them.
Article 3. When there is presented an application for commencing special composition and that for the ordinary composition or for the bankruptcy, the composition procedure or the bankruptcy procedure shall be suspended.
Article 4. When there is presented an application for commencing special composition, the compulsory execution, provisional seizure, provisional disposition or auction specified in Auction Law shall not be effected upon the obligor's estates in respect to the special composition claims, and the compulsory execution, provisional seizure, provisional disposition or auction procedure specified in Auction Law may be suspended by the Law court on application or on its authority.
The provision of Article 40, Paragraph 2, of Composition Law shall apply mutatis mutandis to the auction procedure specified in Auction Law, which is made against the obligors properties in respect to the claims of the special composition, before the commencement of the special composition.
Article 5. Even when the conditions of special Composition are not equitable to the respective special composition obligees, the law courts may decide the commencement or the approval of the special composition, when they recognise that it does not prejudice partiality, though there exists an unequalibility among the obligees, taking into consideration the amount of claim, the time of establishment of the obligation, the existence or non-existence of the right to securities, and other miscellaneous circumstances due to the enforcement of the Law concerning the Special Measures of War Indemnity.
Article 6. The claims mentioned in the following items shall be excluded from the special composition claims:
1. Claims due to salary and other periodical grant (excluding the part which exceeds the extent to be fixed by an Ordinance).
2. Claims due to money received in charge from office-clerks, employees, etc. and other claims corresponding to them (excluding the part which exceeds the extent to be fixed by Ordinance).
3. Claims due to the allowance for retirement of office and other temporary grant (excluding the part which exceeds the extent to be fixed by Ordinance).
4. Claims due to the allowance for injury or death during service to be paid according to laws and orders (excluding the part exceeding the sum to be fixed by Ordinance).
5. Claims not exceeding 1,000 yen per account.
Regarding the application of the provisions of Article 56 of the Composition Law applied mutatis mutandis under Article 14, the claims mentioned in the preceding paragraph, shall be deemed the claims with the right of priority in general meaning.
Article 7. The claims concerning the right of a person who has the right to be defrayed preferentially in the case of bankrupt, shall be deemed special composition claims as to their total sum.
Article 8. The law courts may suggest reconciliation by themselves or make any person deemed proper try reconciliation according to the circumstances.
In the case mentioned in the preceding paragraph, the law courts, when deemed necessary, may lengthen the term specified in the provisions of Paragraph 2 of Article 59 of Composition Law applied mutatis mutandis under Article 14.
Traveling expenses, daily allowances and hotel charges the sum of which shall be fixed by an Ordinance, shall be paid to those who made reconciliation, according to the provisions mentioned in the latter part of Paragraph 1.
Article 9. The obligor shall state his opinion on the special composition claims at the assembly of obligees.
The law court shall record the demurrers stated by the obligor in the list of claims.
After the decision of the approval of special composition becomes final, the special composition obligees may compulsorily execute the claims for which the obligor did not state demurrer at the assembly of obligees, against the estates of the obligor, in accordance with the record of the list of claims. In this case the provisions mentioned in the Book VI of the Code of Civil procedure shall apply with necessary modifications.
Article 10. When the law courts deem necessary, they may change on official authority the conditions of special composition, after hearing the opinion of the administrator and adjustment committee, but it shall be limited to the case where the interests of obligees and obligors are regarded not to be remarkably damaged and special composition is regarded to be easily materialized.
Article 11. In order to get the approval of special composition at the assembly of obligees, it shall be sufficient to get the agreement of a majority of special composition obligees who are present and capable to exercise a vote and whose claims excede one half of total claims of the special composition obligees who have given notice thereof.
At an assembly of obligees, a special composition obligee may express his agreement in writing with regard to the conditions of special composition which are the object of voting. In this case, the said obligee shall be deemed a special composition obligee being present, in the application of the preceding pargagraph.
Article 12. In case the law courts consider that the conditions of special composition are impartial and in accord with the benefit in general of special composition obligees, may make a ruling to approve special composition, after hearing the opinion of administrators and the adjustment committee, despite the disapproval of special composition decided at the assembly of obligees. The same is the case where the proceedings or resolution of special composition are contradicted to the provisions of the Law and their defects cannot be made good where the assembly of obligees did not make any resolution concerning the special composition and also where the said assembly was not organized.
Article 13. When the ruling of approval of the special composition becomes final, the applications for composition or bankruptcy of which the proceedings have been suspended in accordance with the provisions of Article 3, and the compulsory execution, provisional attachment, provisional disposition or the auction proceedings according to Auction Law which have been suspended according to the provisions of Article 4 shall become void.
Article 14. The provisions of the Composition Law shall be applied mutatis mutandis to the special composition, unless otherwise provided for in this Law, excepting the provisions of Articles 9, 16 and 64 of the Composition Law, the part in the provisions of Article 57 of the said Law to which the provisions of Article 342 of the Bankruptcy Law are applied mutatis mutandis and the part in the provisions of Article 62 of the Composition Law, to which the provisions of Article 330 of the Bankruptcy Law are applied mutatis mutandis.
Article 15. The present Ordinance shall not apply to the banking institutions provided by the Law concerning the Emergency Measures for the accounts of Financial Institutions, to special account Companies provided by the Law concerning the Emergency Measures for the Account of Companies, and to those excepting the special account companies, of Paragraph 1 of Article 39 of the said Law.
Supplementary Provision:
The date of the enforcement of the present Law shall be determined by an Imperial Ordinance.