Japan Nuclear Court Wins Give Scant Guide on Further Victory

(Bloomberg) -- The battle is far from over for Japan's nuclear industry.

Two court decisions in favor of nuclear plant operators last week are unlikely to set a precedent for the country's lower courts that face more than two dozen lawsuits against power companies looking to restart reactors, according to Japanese lawyers who track the cases.

Since the March 2011 Fukushima disaster, the battle against nuclear facilities has shifted from the hands of regulators to the courts. Just three of Japan's 42 nuclear units are currently in operation, a setback for efforts by the government of Prime Minister Shinzo Abe to lower the country's reliance on costly fossil fuel imports and lower carbon emissions.

“District courts are independent and can make their own decisions, despite what a high court decides,” Yuichi Kaido, a lawyer at the Tokyo-Kyodo Law Office, said by phone. “Many of Japan's reactors are involved in court cases. It is likely that other nuclear reactors will be hit with injunctions stopping operation.”

The Osaka high court on March 28 removed an order blocking two of Kansai Electric Power Co.'s Takahama reactors from operating, while the Hiroshima District Court rejected a case that would have forced Shikoku Electric Power Co. to shut one of its atomic units. The Takahama decision was at least the third time a high court has ruled in favor of utilities seeking to restart reactors.

Because restarts boost profits, Kansai Electric rose 8.2 percent Wednesday, the first day of trading after the Osaka ruling. The average stock price for utilities that have had nuclear units cleared for restart under post-Fukushima safety rules also rose 4.6 percent, the biggest one-day gain for the group this year.

The recent flurry of court activity aimed against nuclear contrasts with a usual reticence in Japan to resort to lawsuits. U.S. courts see three times as many suits filed per capita than in Japan, according to Harvard Law School.

Court Action

Since the Osaka High Court decision doesn't set a precedent, it is no guarantee that local courts will rule in favor of utilities, Goldman Sachs Group Inc. analysts, including Hiroyuki Sakaida, wrote in a note last week.

“The threat of court intervention remains a serious obstacle to the Abe administration's goal of full nuclear restarts,” Daniel Aldrich, director of the Security and Resilience Studies Program at Northeastern University in Boston, said by email. “A number of local courts, including those involved in the Takahama case, have been sympathetic to arguments from local residents and anti-nuclear groups who continue to argue that these reactors remain dangerous.”

To contact the reporter on this story: Stephen Stapczynski in Tokyo at sstapczynsk1@bloomberg.net.

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Iain Wilson, Abhay Singh