Supreme Court, Second Petty Bench · September 28, 2026 · Reiwa 7 (2025) (A) No. 262 · Judgment; judgment below reversed (appeal of Defendant A dismissed; case against Defendant B remanded)

The Court held that a public-offering proposal competition, conducted under an internal rule to determine the preferred negotiating party for a contract, falls within "conducted for the purpose of concluding a contract by bidding" in Article 96-6(1) of the Penal Code.

Obstruction of auction or bidding in relation to a public contract (criminal case)

Facts

A medical center operated by a federation of national public service mutual aid associations announced a public-offering proposal competition, under the federation's internal rules, to determine the preferred negotiating party for a contract on the development and operation of a dispensing pharmacy on the center's premises. Five companies applied. A branch manager (Defendant A) and a development division head (Defendant B) of one applicant, a company operating dispensing pharmacies, were prosecuted for obstruction of auction or bidding in relation to a public contract: in conspiracy with the center's director of administration, after the deadline for submitting proposals the director had informed Defendant A that other businesses had proposed higher rent and other payments, urged the company to resubmit its proposal, and had it resubmit. The first-instance court held that the competition was "conducted for the purpose of concluding a contract by bidding" and found the offense established. The court of appeal held that it was not, quashed the first-instance judgment, and acquitted both defendants.

Issue

When does a method of selecting the other party to a contract, based on laws or internal rules, fall within "conducted for the purpose of concluding a contract by bidding" in Article 96-6(1) of the Penal Code? Does a public-offering proposal competition that merely determines a preferred negotiating party fall within it?

Ruling

The Court held that, since bidding is a method of selecting the other party to a contract on the principle of free competition, where a method based on laws or internal rules for selecting the other party has been lawfully decided on by the competent organ and that method has the substance of competitive bidding, it falls within the provision (referring to the judgment of the Second Petty Bench of April 25, 1958). It found that the competition had been lawfully decided on by the competent hospital director under internal rules, and examined whether it had the substance of competitive bidding. It held that it did: applicants competed without knowing one another's proposals; the matters put to competition were specifically stated in the application guidelines, and even though the scoring criteria were not published, applicants could readily foresee that evaluation would proceed from a viewpoint suited to the purpose; the evaluation criteria had a considerable degree of objectivity and fairness, as did the method of evaluation, which used the sum of scores of several evaluators and was subject to subsequent approval; and negotiation after determination of the preferred party was not expected to change significantly the contract terms in the proposal. As to the judgment below's view that the competition merely determined a preferred negotiating party and so was not conducted "for the purpose of concluding a contract", the Court held that those words, together with "by bidding", merely distinguish the elements of that paragraph, concerning public contracts, from those of Article 96-4, concerning compulsory execution, and do not limit the scope of the offense. The Court reversed the judgment below, upheld the first-instance judgment as to Defendant A and dismissed his appeal, and remanded the case against Defendant B to the court of appeal so that it could examine the ground of appeal concerning factual error, on which the judgment below had given no ruling. The opinion was unanimous.

Provisions

Penal Code (before amendment by Act No. 67 of 2022), arts. 96-6(1), 96-4