The appellant argues that the decision of the original instance court was unlawful because it overlooked the fact that the provisions of Chapter II of the Law on the Limitation of the Liability of Ship Owners violate art 29 of the Constitution.

Held: The decision of the original instance court is justifiable, and the arguments of the appellants cannot be accepted. The present kokoku appeal [ie a complaint of judicial misinterpretation of the Constitution] is dismissed with costs, and the justices unanimously rule as the main text of the judgment.

As the appellant contends, the provisions of Chapter II of the Law on the Limitation of the Liability of Ship Owners specifically limit the liability of shipowners concerning certain obligations.

However: (1) the system of the limitation of the liability of ship owners has been adopted by countries for a long time, since it was regarded as necessary for the appropriate management and development of the merchant shipping industry, considering the fact that this industry involves the operation of ships which requires major investment and entails substantial risk;

(2) the provisions of Chapter II are based upon the provisions of the International Convention on the Limitation of Liability of Owners of Seagoing Vessels (International Treaty No 5, 1976), and it is impractical for Japan not to adopt this system of limitation of liability of ship owners on its own in relation to the merchant shipping industry which has a strong international nature; and

(3) previously, in Japan, there was a system of abandonment in the Commercial Code; this was replaced by the present system in which the liability is limited by capping the amount of compensation, ie the system in which liability is limited in each accident to the amount which is obtained by the tonnage of the vessel about which the claim is concerned, aggregated by a fixed amount of money. Claims which emerged out of the intention or negligence of the ship owner, claims based upon the damage which was caused to a certain class of people by ships operating in internal waters, and claims based upon rescue at sea and collision are not subject to limitation.

Furthermore, art 690 of the Commercial Code, which has been amended as a result of the present Law taking effect, aggravates the liability of the employer as provided in the Civil Code and allows a certain scope for strict liability. Considering these points in various ways, the provisions of Chapter II of the present Law are justifiable as they are in compliance with public welfare and cannot be regarded to be in breach of arts 29(1) and 29(2) of the Constitution [which provide that the right to own or to hold property is inviolable, and that property rights shall be defined by law, in conformity with the public welfare].