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The Diet unanimously enacted legislation Friday that sets rules for Japanese companies to file civil lawsuits with courts in Japan against foreign governments.

The law, unanimously approved during a House of Councilors plenary session, is in response to increasing cross-border disputes involving Japanese firms amid the globalization of business activity.

The rules set under the law are intended to expedite settlements of legal disputes between Japanese companies and foreign governments.

The law says civil lawsuits can be filed with Japanese courts against not only foreign governments but also entities that could be treated similarly, such as provincial governments and central banks, as long as such legal action does not constitute a violation of the targeted country’s sovereignty.

The bill limits areas in which civil suits against foreign governments can be lodged in Japan to nine areas. They include merchandise goods sales, loan transactions, problems related to labor contracts, traffic accidents and injury cases involving foreign public servants, and copyright and patent disputes.

In principle, states are exempt from being treated as defendants by courts in foreign countries under international law. But recently, it has become common not to apply the principle in civil lawsuits such as those concerning business deals.

The United States and Britain have established legal frameworks for such lawsuits. But whether such suits are allowed in Japan had been unclear.

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