New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (Luke Nottage, Shahla Ali, Bruno Jetin & Nobumichi Teramura, eds., Wolters Kluwer, end-2020): Abstracts, Keywords & Webinar

Below are summaries of the 15 chapters in our forthcoming book, building on a joint HKU/USydney project throughout 2019 (background and draft bios here). Please consider registering or telling your networks about a free Webinar with the co-editors, some authors and others, scheduled for Tuesday 4 August 2020 5-6pm (Sydney time): https://law-events.sydney.edu.au/talkevents/beyond-the-pandemic-new-frontiers-in-asia-pacific-international-dispute-resolution

  1. Introduction: New Frontiers in Asia-Pacific Trade, Investment and International Business Dispute Resolution –Luke Nottage & Bruno Jetin

Abstract: Asia-Pacific trade and investment flows have burgeoned over recent decades, albeit impacted by China-US trade tensions and especially the COVID-19 pandemic (§1.02). International investment agreements have proliferated to liberalise and protect investments (§1.03), mostly adding the option of investor-state dispute settlement (ISDS). Asia-related ISDS cases have also started to grow, albeit somewhat belatedly (§1.04), complementing a more longstanding upward trend in international commercial arbitration (ICA) cases involving Asian parties filed in the region as well as the traditional Western centres (§1.05). The eastward shift in international dispute resolution has already involved initiatives to improve not just support for ICA and ISDS arbitrations, but also to develop alternatives such as international commercial courts and mediation. Core arguments from ensuing chapters (§1.06) cover the main existing venues for international dispute resolution in Asia (China, Hong Kong and Singapore) but also some emerging contenders (Japan, Malaysia, India and Australia). Overall (§1.07), can ICA venues improve their attractiveness through law reforms, case law development and other measures, despite growing concerns about costs and delays? Will some emerging concerns about ISDS prompt Asia-Pacific states to become more active “rule makers” in international investment law? How might these issues be affected by the COVID-19 pandemic?

Keywords: international trade, foreign direct investment (FDI), free trade agreements (FTAs), international investment treaties, international economic law, arbitration, mediation, international commercial courts, Asia, COVID-1

2. An International Commercial Court for Australia: An Idea Worth Taking to Market – Marilyn Warren & Clyde Croft

The time has come for Australia to join others in establishing a new “International Commercial Court” as another international dispute resolution option especially for the Asia-Pacific region. This chapter outlines the existing international legislative architecture (the 1958 NYC for international arbitration, inspiring the 2005 Hague Choice of Court Convention), and the models provided by London’s venerable Commercial Court and since 2015 the Singapore International Commercial Court (including the latter’s composition, jurisdiction, procedure and confidentiality provisions, appeals, and cross-border enforceability of its judgements – facilitated by Singapore ratifying the 2005 Hague Convention). It uses these topics to frame the proposal for an Australian International Commercial Court, including the possibility of allowing its litigants to exclude the application of the Australian Consumer Law (which otherwise may apply also to many business-to-business disputes). It concludes that the COVID-19 pandemic has bolstered the case for such a new Court, by minimising the obstacle of Australia’s physical distance as litigation has had to move rapidly online, and because the pandemic’s economic dislocation will undoubtedly lead to more cross-border disputes.

Keywords: international arbitration, international litigation, international commercial courts, Australia, Singapore, United Kingdom, COVID-13.

3. New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country’ – Albert Monichino & Nobumichi Teramura

Abstract: Australia is not a lucky country in the context of international commercial arbitration (ICA) due to its geographical isolation. However, the problem of remoteness has luckily been ameliorated since the COVID-19 pandemic, thanks to the dramatic spread of video-conferencing technologies in arbitrations and even in some court proceedings. ‘Luck’ can no longer excuse Australia for running behind other regional competitors. Analysing recent cases in Australian judiciary, this chapter puts forward seven proposals for legislative reform that may be useful for Australia to attract more ICA cases on its shores: establishing an indemnity costs principle for failed challenges in ICA matters, notably regarding arbitral awards; enabling Australian courts to issue subpoenas to support foreign arbitrations; clarifying choice of law rules on the existence and scope of arbitration agreements; limiting or excluding the application of Australian Consumer Law to cross-border business-to-business transactions; defining ‘Australian Law’; provisions to catch up with recent arbitration innovations; clarifying arbitrability of trust disputes; and centralising judicial power for ICA appeals. Implementing those proposals will pave the way for Australia to become an attractive arbitration hub in the Asia-Pacific region.

Keywords: Australia, international commercial arbitration, International Arbitration Act, Commercial Arbitration Act, law reform, COVID-19, e-proceedings. 

4. Confidentiality and Transparency in International Arbitration: Asia-Pacific Tensions and Expectations – Luke Nottage

Abstract: Confidentiality is considered a significant advantage for international commercial arbitration over cross-border litigation, as seen in rules of most arbitral institutions. Automatic (opt-out) confidentiality is also now found in many national laws, including statutory add-ons to the UNCITRAL Model Law and/or through case law for example in New Zealand, then Hong Kong, Singapore, Malaysia, and eventually Australia. Yet there remain variations in the timing of these developments as well as the scope and procedures associated with exceptions. There is also no confidentiality provided in Japan’s later Model Law adoption, although parties mostly choose the JCAA so opt-in to its Rules, which have gradually extended confidentiality obligations. Another complication is growing public concern over arbitration procedures through investor-state dispute settlement (ISDS), particularly in Australia since an ultimately unsuccessful treaty claim by Philip Morris. Statutory amendments in 2018 reverse automatic confidentiality for Australia-seated ISDS arbitrations applying the 2014 UNCITRAL Rules on Transparency. Concerns over ISDS may even impede Australia enacting provisions for confidentiality of arbitration-related court proceedings. These provisions could not be revised recently in New Zealand, against the backdrop of its new government’s anti-ISDS stance. This chapter elaborates such expectations and tensions regarding the double-edged sword of confidentiality in international arbitration, focusing on Australia and Japan in regional context.

Keywords: international commercial arbitration, investor-state dispute settlement (ISDS), confidentiality, transparency, Australia, Japan, Asia, costs, delays, law reform

5. Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS Policy: The CPTPP, Hong Kong, Indonesia and Mauritius Transparency Treaties – Ana Ubilava & Luke Nottage

Abstract: This chapter updates on recent investment treaty practice by Australia, which attracted regional and global attention when a centre-left government over 2011-13 declared Australia would no longer agree to ISDS provisions when negotiating further treaties. The chapter compares substantive commitments and ISDS provisions in Australia’s treaties signed with Indonesia and Hong Kong in 2019 (IA-CEPA and AHKIA) compared especially with the mega-regional CPTPP signed in 2018. The new bilateral treaties remain quite heavily influenced by US-style drafting, epitomised by the CPTPP. The chapter then elaborates on the costs and delays associated with ISA. It examines empirical studies, then relevant provisions of the three new treaties, including an innovative investor-state mediation provision in IA-CEPA probably proposed by Indonesia. The chapter also considers transparency of proceedings and outcomes. It again examines mainly CPTPP, IA-CEPA and AHKIA, but also a parliamentary inquiry into Australia ratifying the Mauritius Convention. This seeks to retrofit extensive transparency provisions on pre-2014 treaties between Australia and other states that might also accede to that framework Convention. More bipartisanship may be emerging in domestic politics regarding international investment treaty-marking, so Australia is now better placed to play a more active role especially in the Asia-Pacific region.

Keywords: Investment treaties, Investor-State Dispute Settlement (ISDS), Australia, Hong Kong, Indonesia, mediation, arbitration, transparency, costs, delay

6. New Frontiers in Hong Kong’s Resolution of ‘One Belt One Road’ International Commercial and Investor-State Disputes – Shahla Ali

Abstract: Given the rapid increase in Chinese outward foreign direct investment since the start of the ‘One Belt One Road’ Initiative (OBOR), international commercial and investor state disputes involving Chinese and Hong Kong investors will likely multiply. Given the significance of Hong Kong as a fulcrum for OBOR project financing and logistics, understanding Hong Kong’s approach to the resolution of OBOR disputes will offer a window into the region’s new frontiers in commercial and investor-state dispute resolution.

Keywords: international commercial arbitration, mediation, investment treaties, investor-state dispute settlement (ISDS), Hong Kong, China, Belt and Road

7. Harmonising the Public Policy Exception for International Commercial Arbitration along the ‘Belt and Road’ – Gu Weixia

Abstract: In context of a rising volume of cross-border transactions generated by the BRI, this chapter argues that a robust legal framework for dispute resolution is required to forge investor confidence and enable BRI’s integral goal of economic integration. In light of the substantial levels of harmonization among arbitration laws, arbitration is arguably constitutes the primary vehicle for international commercial dispute resolution in an economically integrated Asia under the BRI. Against this backdrop, this chapter argues that the BRI provides a unique opportunity to contemplate the possibility of regional harmonization, as within the Asian economies along the BRI, of the “public policy” exception to arbitral award enforcement. Such an arbitration initiative in Asia, in which China is anticipated to take a pro-active role, holds much potential to project renewed momentum on China as an engine of not only economic power, but also “soft power” transformation in pioneering international legal norms.

Keywords: international commercial arbitration, New York Convention, UNCITRAL Model Law, China, Belt and Road

8. Recent Developments in China in Cross-Border Dispute Resolution: Judicial Reforms in the Shadow of Political Conformity – Vivienne Bath

Abstract: The rapid expansion of China’s international trade and investment in the 21st century has necessarily brought with it the need for modern and effective cross-border dispute resolution mechanisms.  At the international level, China is playing an active role in the review of investor-state dispute settlement in UNCITRAL Working Group III and participating in dispute resolution developments in the WTO.  Domestically, the Supreme People’s Court has been working to set up new institutions (the China International Commercial Court), improve mechanisms for the review and enforcement of arbitral awards and encourage mediation, both domestically and internationally. Much of this activity has been generated and spurred on by the Belt and Road Initiative (BRI) and the anticipated associated increase in cross-border disputes arising from the many commercial transactions involved in the BRI. Its execution also reflects the desire to encourage and expand the international use of Chinese law and build up China as a centre for international dispute resolution. At the same time, however, the Chinese Communist Party is tightening its ideological and administrative control over the courts and judicial system.  This chapter examines and discusses the implications of these recent developments.

Keywords:  China, arbitration, mediation, cross-border dispute resolution, one-stop diversified dispute resolution, investor-state dispute settlement (ISDS), online arbitration, communist party (CCP), Supreme People’s Court (SPC), China International Commercial Court (CICC)

9. Malaysia’s Involvement in International Business Dispute Resolution – A Vijayalakshmi Venugopal

Abstract: Malaysia has had some early but comparatively limited involvement in formally resolving trade disputes, but more engagement in investor-state dispute resolution – including as home state for investors bringing claims, not just as host state respondent. Some companies in Malaysia and its main international arbitration centre have also been involved in domain name dispute resolution. That centre and some other organisations have also long promoted various types of Alternative Dispute Resolution (ADR), with renewed efforts in recent years to develop new procedures and attract more international commercial arbitrations. Malaysia has also been quite active in negotiating free trade agreements (FTAs). This creates a solid platform to comtinuing becoming more of a rule maker in international investment law as well as a significant regional hub for international business dispute resolution services, although Malaysia still has a way to go in both respects compared to larger Asia-Pacific economies and/or more established hubs.

Keywords: Malaysia, World Trade Organization (WTO), free trade agreements (FTAs), international investment treaties, investor-state dispute settlement (ISDS), domain name dispute resolution, settlement

10. Disruption as a Catalyst for International Dispute Services in Japan: No Longer Business as Usual? – James Claxton, Luke Nottage & Nobumichi Teramura

Abstract: The Japanese government, supported by various stakeholders, has recently been attempting to develop Japan as another regional hub for international business dispute resolution services. Tracking this development is important for both theoretical and practical reasons. How it unfolds should reveal which of various theories for explaining Japanese law-related behaviour have more traction nowadays, especially for international commercial arbitration but also for investor-state arbitration. Assessing the new initiatives is also important for legal practitioners and others interested in the practical question of where to arbitrate or mediate cross-border business disputes, particularly in the Asia-Pacific region. This chapter therefore focuses mainly on current attempts to promote existing and new international arbitration centres in Japan as well as the recent establishment of the Japan International Mediation Center – Kyoto. It locates such developments in the context of intensifying competition from other regional venues for dispute resolution services, but also the challenges and potential opportunities created by the COVID-19 pandemic since 2020.

Keywords: international commercial arbitration, investor-state dispute settlement (ISDS), mediation, Japan, culture, COVID-19

11. Litigating, Arbitrating and Mediating Japan-Korea Trade and Investment Tensions – James Claxton, Luke Nottage & Brett Williams

Abstract: In July 2019, Japan introduced measures tightening export restrictions to South Korea on three chemicals critical to the manufacture of consumer electronics. The restrictions prompted an animated response by the Korean government, including World Trade Organization (WTO) consultations and threats to terminate an intelligence-sharing agreement. The controversy also filtered down to the public with boycotts of Japanese products in Korea. Tension between the states has been unusually high since 2018 when the Korean Supreme Court affirmed a judgment against Japanese companies accused of forcing Korean nationals to labour in factories during Japan’s colonial rule. Japan argued that these claims were precluded by a 1965 treaty normalizing post-war relations. While Japan claims that its trade restrictions were not motivated by the judgment, the disputes have contributed to the worst breakdown in cross-border relations in five decades. This chapter evaluates Korea’s trade claims against Japan, means of resolving them, and challenges faced in the WTO dispute settlement system. Alternatives or additions to WTO dispute settlement procedures are considered including claims before the International Court of Justice, interstate arbitration, and investor-state dispute settlement. Mediation offers an effective means to facilitate negotiations and centralise the trade and treaty disputes in a single forum.

Keywords: international trade law, World Trade Organization (WTO), exports, international investment treaties, investor-state dispute settlement (ISDS), arbitration, mediation, Japan, Korea

12. Indian Investment Treaty and Arbitration Practice: Qualitatively and Quantitatively Assessing Recent Developments– Jaivir Singh

Abstract: This chapter provides a perspective of investment treaty practice from India, which lies at the periphery of what is traditionally associated with the Asia Pacific region. While on the periphery, India has signed investment and trade treaties with many Asia Pacific countries and is also involved in disputes with them. India had in fact endorsed a number of investment treaties with many countries around the world but has recently gone on to denounce all of them and seeks to renegotiate fresh treaties using a template provided by a new model treaty that is oriented towards privileging state rights. The chapter begins by a qualitative review of cases that have been instituted against India by investors, followed by a discussion of the many reactions that this has elicited – a new model treaty, subsequent denunciation of treaties, signing of new treaties and  attempting changes in the domestic law as a device to protect foreign investors.  The next half of the chapter assesses these outcomes by looking at econometric evidence pointing to a positive impact of investment treaties signed by India on foreign investment inflows into India, going on to argue that the manner in which state rights have been enhanced in the new treaties – drawing inspiration from trade law – demonstrably curbs investment.

Keywords: foreign direct investment (FDI), international investment treaties, arbitration, econometrics, law reform, India, Australia

13. FTA Dispute Resolution to Protect Health Can Free Trade Agreements and their Dispute Resolution Mechanisms Help Protect the Environment and Public Health? The CPTTP, MARPOL73/78 and COVID-19 – Jiaxiang Hu & Jeanne Huang

Abstract: Preventing or managing a global pandemic such as COVID-19 requires states to strictly comply with the International Health Regulations 2005 (IHR). However, the IHR lacks a strong enforcement mechanism, like many multilateral environmental protection agreements. Over the past fifteen years, several such conventions have been incorporated into free trade agreements (FTAs) to enhance State compliance and therefore promote environmental protection. A typical example is the International Convention for the Prevention of Pollution from Ships and its Protocols (MARPOL 73/78). Vessels, like viruses, are globally mobile. Vessel-sourced pollution also mirrors human-carried viral infection, because the locations of potential harm are unpredictable and widespread. This Chapter examines first whether FTAs (especially mega-regional FTAs) can effectively encourage States to comply with MARPOL 73/78. Through this analysis, it generates implications regarding whether the IHR regime could also rely on new or renegotiated FTAs, or be reformed directly, to enhance state compliance with public health initiatives.

Keywords: free trade agreements (FTAs), environmental protection, public health, COVID-19, WHO, MARPOL, dispute resolution, arbitration, Asia-Pacific

14. Promoting International Mediation through the Singapore Convention – S.I. Strong

Abstract: This chapter seeks to determine whether and what extent the recent promulgation of the United Nations Convention on International Settlement Agreements Resulting from Mediation will promote the use of mediation within the international legal and business communities. The discussion analyses the issue from a unique interdisciplinary perspective, applying concepts from dispute system design, default theory, psychology, and law and economics to both identify and resolve potential problems with the convention. The chapter also includes data from a recent empirical study conducted by the author on the use of mediation in international commercial disputes. Through this discussion, the chapter hopes to identify how individuals and institutions can complement the effect of the convention to support the development of international commercial mediation in the coming years.

Keywords: International mediation, treaty-making, law reform, Singapore Convention, interdisciplinary perspectives

15. Expanding Asia-Pacific Frontiers for International Dispute Resolution: Conclusions and Recommendations – Nobumichi Teramura, Shahla Ali & Anselmo Reyes

Abstract: Asia’s emergence as a global economic powerhouse has corresponded with a prolonged upward trend in international commercial arbitration (ICA) cases involving Asian parties, as well as a belated expansion of investor-state dispute settlement (ISDS) arbitrations involving Asian states or investors. Further accelerating the eastward shift in international dispute resolution, various initiatives to improve support for ICA and ISDS have been taken and alternatives (such as international commercial courts and international commercial mediation) have been promoted. This book aimed to examine significant ‘new frontiers’ for Asia-Pacific cross-border business dispute resolution, focusing on major economies in East and South Asia and countries (such as Australia) that are closely linked economically and geographically. The principal questions posed were: (1) whether existing and new venues for ICA could improve their attractiveness through law reform, case law development, and other measures, despite worries about cost and delay; (2) whether emerging concerns about ISDS-backed investment treaty commitments would prompt Asian states to become rule-makers in international investment law, rather than be mere rule-takers; and (3) whether innovations in existing or new fields might assist the Asia-Pacific region to develop international dispute settlement further. The foregoing chapters have discussed these broad themes, focusing on developments in Australia, Japan, Hong Kong, China, India and Malaysia, while paying attention to broader regional initiatives (such as China’s Belt and Road Initiative (BRI)) and recent international instruments (such as the Singapore Convention on Mediation, in force from 12 September 2020). This concluding chapter highlights key findings in the individual chapters and identifies some challenges for the post-COVID-19 era.

Keywords: international trade, foreign direct investment (FDI), free trade agreements (FTAs), international investment treaties, international economic law, arbitration, mediation, international commercial courts, Asia, COVID-19

Commemorating Prof Dr Harald Baum’s 25-Year General Editorship of the Journal of Japanese Law

[Foreword forthcoming in Issue 50 of the Journal of Japanese Law]

The wonderful Journal of Japanese Law (ZJapanR/J.Japan.L.) has provided inspiration world-wide, even to antipodeans from its earliest days. Prof Harald Baum supported and befriended me since the early 1990s at Kyoto University, where he was on a research sabbatical from Hamburg and I was studying for the LLM and the first part of a PhD. He was researching and editing a comprehensive Handbuch on Japanese business law (published in 1994) thatincluded a selective and carefully-structured bibliography of works in German. We collaborated in developing a bibliography of works in English, published in 1997 after I returned to New Zealand, with ZJapanR/J.Japan.L.’s Issue 3 reproducing a section on “Finding Japanese on the Internet” (such a new technology at that time!).[1] We then combined and expanded these resources into a detailed Bibliography published in 1998 in the United States (with a second edition in 2013).[2] The ZJapanR/J.Japan.L. has continued to publish bibliographies curated by experts to assist academic and other researchers, even (or perhaps especially) in this age of digital information. An example is a bibliography in ZJapanR/J.Japan.L.’s immediate past issue (No 49) surveying scholarship on gender and Japanese law.[3]

This early collaboration with Harald made me realise early on just how much high-quality and wide-ranging research relating to Japanese law was being published in German, English and even other Western languages in various places, including the new ZJapanR/J.Japan.L. Harald and the Journal also generously supported the Australian Network for Japanese Law (ANJeL), when it was created in 2002 by the law schools at Australian National University (ANU), the University of Sydney and a third university in Australia (currently the Queensland University of Technology).[4] Harald became a founding member of ANJeL’s advisory board and helped the DJJV become an ANJeL affiliate. He also kindly invited myself and Prof Kent Anderson (then at ANU, now Higher Education advisor to Australia’s Education Minister) onto the ZJapanR/J.Japan.L. editorial board.

ANJeL helped source potential contributions to the Journal, including occasionally some excellent research papers by Honours or other senior or former students from Australia, significantly helping their careers as well as providing useful perspectives for readers. ZJapanR/J.Japan.L. also published mini-issues, such as some papers for Issue 12 from my conference at the University of Victoria in Canada on “the multiple worlds of Japanese law” (2001), and papers for Issue 34 (2012) from ANJeL’s conference in Asia-Pacific disaster management.[5] Harald made it possible as well to reproduce some ZJapanR/J.Japan.L. material on ANJeL’s website. This helped raise the visibility of the Journal worldwide, but also the new Network, which now brings together over 500 academics, practitioners and others interested in Japanese law not only based in Australia and Japan but also in Germany and other parts of Europe as well as across Asia. ZJapanR/J.Japan.L.’s past issue and this one (No 50) include some papers from an ANJeL conference with and at the University of Pavia, charting and comparing the promising expansion of Japanese law scholarship throughout Europe nowadays.[6] Harald also kindly ensured that a brief activities report on ANJeL was included along with DJJV news in pamphlets sent out with issues of the Journal to its readers. Without all these links to the ZJapanR/J.Japan.L. facilitated by Harald, ANJeL would have had far less impact, so I would like to formally thank him (and Journal colleagues) for this long and fruitful collaboration.

I also express my immense gratitude for Harald’s untiring efficiency and always encouraging good humour in the time-consuming role as general editor over the last quarter century. He did so much more than for most other Journals I have helped or been associated with, where there are often now several general or senior editors given the growing demands associated with managing a reputable academic journal. Harald managed to minimise calls on editorial board members, while using us effectively when needed for reviews or advice, and always produced the goods. I was always excited to receive, like clockwork every six months, the next ZJapanR/J.Japan.L. issue, and I always found many things to read and learn about. Other Japan-specific law journals have fallen by the wayside, but the ZJapanR/J.Japan.L. is an invaluable resource and hope the new general editor and associated colleagues can maintain Harald’s legacy for at least another 25 years.


[1] Harald Baum and Luke Nottage, “Annotated Select Bibliography of Japanese Business Law in Western Languages”, Victoria University of Wellington Law Review 1997, 121-174; “Finding Japanese Law on the Internet: A Sample Odyssey”, ZJapanR/J.Japan.L. 3 (1997) 45-46.

[2] Harald Baum and Luke Nottage, Japanese Business Law in Western Languages: An Annotated Selective Bibliography (Rothman, 1998; 2nd ed Hein, 2013 co-authored also with Joel Rheuben and Markus Their).

[3] By Mark A. Levin and Kallista Hiraoka: see the foreword to the mini-issue by Leon Wolff and others, at https://japaneselaw.sydney.edu.au/2020/04/endurance-in-japanese-law/.

[4] For its new website, see https://www.anjel.com.au/.

[5] These included versions of papers developed for a book, as well as other complementary papers: Luke Nottage, Hitoshi Nasu and Simon Butt (eds), Asia Pacific Disaster Management: Comparative and Socio-Legal Perspectives(Springer, 2013), with a version of the introductory chapter freely available at  https://ssrn.com/abstract=2263953.

[6] For conference presentation abstracts and themes, see https://japaneselaw.sydney.edu.au/2019/04/japanese-law-compared-past-present-and-future/.

Comparing Australia’s Response to COVID-19: Against Whom, What, Why and How? Submission to a Senate Inquiry

Written by: Luke Nottage (Sydney Law School) and Tom van Laer (Sydney Business School)

We welcome this opportunity to provide a Submission to the Australian Parliament’s “Senate Committee on COVID-19” inquiry into the Australian government’s response to the outbreak and pandemic.[1] It seems very early to begin making such an assessment. But we o1ffer from our respective disciplines (comparative law and narratology) some preliminary observations as well as lines for future investigation that may assist Parliament and others contributing to this ongoing debate.

  • Our analysis builds partly on our recent joint contribution to USydney blogs (here and forthcoming).[2] One key message from that contribution is that this pandemic and its response have created a new narrative world, rather like a peculiar disaster movie, that prioritises only certain types of heroes and “expertise”. Another key point is that different countries nonetheless have been able to respond well if they have and can mobilise citizens’ trust in communities and (generally well-run) government.[3] A third lesson is that as Australia keeps trying now to move into a phase of socio-economic revitalisation, a new narrative will emerge and could be framed by political and other leaders.
  • In addition, more broadly, basic methodology in comparative law highlights the importance of working out what to compare and why. This is not obvious even if we try to focus on health outcomes. For this parliamentary inquiry, one question is whether to focus on death rates (which are easier to measure and compare, and the ultimate concern) or infection rates (varying widely depending on national testing regimes, but still maybe useful for projecting rates of deaths and serious treatments). On either measure, Australia has been doing extremely well by global standards.
  • If focusing mainly on COVID-19 death rates in assessing a current or future response, however, another aspect is whether and how to count deaths that are indirectly caused by the virus even over the short- to medium-term. These could include deaths from deferred or delayed surgeries or treatments, a greater than usual number of suicides (prompted by extended isolation) and more fatal traffic accidents (found eg in some parts of Japan despite an overall drop, as travel restrictions emptied streets so cars were driven faster).[4] Even greater complications come from trying to assess long-term consequences for the health and related welfare systems, from lockdown measures that result inevitably in severe economic slowdowns, as the stress from long-term un(der)employment is known to be extensive but hard to measure. It is even more complex to compare such effects across countries, as they have very different baselines regarding unemployment and health/welfare systems.
  • Contemporary experts in comparative law are also very attuned to considering what is being compared in terms of law. It is usually not enough to just compare the “black-letter law” rules set out in primary or secondary legislation. (This is well illustrated by Australia’s public health orders restricting movement, which needed to be further “interpreted”, eg as to what constitutes permitted “exercise”, by health ministers and/or police commissioners.[5]) Nor is it even enough to consider case law interpreting legislation (for which anyway there has been hardly any in Australia relating to pandemic responses, unlike countries like France or Germany with constitutionally-protected civil liberties).[6] We also need to compare norms that are “law-like” in terms of origin (from or supported by the government) and impact. Our blog posting mentions Sweden and Japan as countries where social distancing and travel restrictions are being implemented effectively, even among growing death and infection rates respectively, largely without police-enforced criminal or administrative sanctions. A question for this inquiry is therefore what Australia’s more narrowly legalistic response says about how we operate and our values as a society.
  • Japan’s pandemic response, which mostly appeals to communitarian norms of self-restraint rather than having the government and police enforce strict legal rules (as in Australia, albeit with local differences), is reminiscent of John Haley’s argument that Japan even in modern times is governed quite effectively by Authority Without Power (OUP, 1991). Regarding limited “power”, through legal enforcement mechanisms, legal sociologist Takao Tanase’s Community and the Law (co-translated for Elgar, 2010) highlights that Japan remains acutely aware that rigorously extending a “modern” legal system into socio-economic ordering can often be a double-edged sword – even as it has embarked on another wave of justice system reform this century.[7]
  • Relatedly, a final general lesson from comparative law methodology is to be aware of who we are comparing, ie which legal systems. The US is often an outlier, in its law and related socio-economic system,[8] so this Inquiry and later analyses should probably not focus much on that country. Australian jurists (and others) also often compare the UK, as the “mother country” still especially for basic legal principles, but we now borrow more instrumentally and widely, so should keep looking at other (continental) European as well as Asian countries. In particular, we can learn from the comparatively effective yet diverse pandemic responses adopted in East Asia, as mentioned in our joint blog posting added to this Submission.
  • With these methodological principles in mind, one conclusion that emerges from a preliminary comparative analysis of the pandemic is the importance of “proportionality” and “subsidiarity” principles in regulatory responses (including in international law, such as investment treaties[9] – often examined recently in Australian parliamentary inquiries).[10] As in public and private health, it is risky to jump in quickly with stronger measures, especially where there are uncertainties; to minimise side-effects and unexpected consequences, it is usually better to begin with less intensive interventions. Even when we set a short-term public health goal (like COVID-19 infection or especially death rates), and re-set goals as evidence becomes available or circumstances evolve, the response should be proportionate. It should seek to minimise adverse longer-term health effects (eg physical or mental health problems or suicides from sustained social isolation) and other adverse socio-economic impact (including economic contraction impacting on funding for the health and related social welfare systems). To get the balance right often means devolving decision-making authority to lower levels in government, with better information about constraints and impacts: the subsidiarity principle, well-developed say within the EU.
  • Japan seems to have pursued quite a proportionate response, only increasing restraints after infections started to escalate in March, rather like Sweden (but the latter with a much higher death rate). Yet Japan shows less devolution, arguably due to quite a centralised polity, despite the important policy-making contributions by Tokyo and Osaka governors. As a federal system, Australia has displayed more subsidiarity. Prime Minister Morrison and the federal government did usefully innovate around the Constitution by creating a “national cabinet” including premiers or leaders of all states and territories, to help coordinate pandemic responses in light of public health and economic advice. But states and territories across this huge island continent have still differed in timing, scope and implementation of pandemic responses, linked to infection and death rates but also arguably politics (with more centre-left states intervening more, notably Victoria eg not allowing solo fishing as golf as permitted “exercise”). Responses also vary even at local council level (with eg some even in New South Wales closing off city beaches to surfers, even if not necessarily at risk of police closing them down for exceeding state-level restrictions on crowds).
  • By contrast, New Zealand, a much stricter lockdown was implemented nation-wide with no regional variation, aiming at “eradication” rather than “management” of the virus.[11] In hindsight so far, given similar health outcomes so far compared to Australia, the policy seems less proportionate given the necessarily much greater adverse socio-economic impact (even in a more agrarian economy). Perhaps the policy was influenced by the electoral cycle, with Prime Minister Ardern before the pandemic viewed as facing a close election in September this year[12] – leaders don’t want to go to the polls amidst escalating death rates. But the policy could be implemented nation-wide because New Zealand still probably has what former constitutional law professor (and later Prime Minister) Geoffrey Palmer criticised as “the fastest law in the West”.[13] New Zealand still has a unitary state with only one house of parliament and no constitutional bill of rights, and quickly enacted new lockdown legislation,[14] attracting some belated and muted criticism.[15]
  • Another conclusion from a preliminary comparative analysis is that countries and their residents often tend to display a curious nationalism regarding their respective pandemic responses. New Zealanders mostly still seem very happy with their government’s measures. Perhaps this reflects a psychological defence mechanism to deal with a tough lockdown, or an undercurrent of historical deference to authority (“conservative reformism”, as put in an analysis comparing Japan’s “reformist conservatism” in legal education),[16] or a sense of nationhood premised on New Zealand leading the world (eg first to give votes to women, expanding the welfare state over the 20th century, then deregulating dramatically  in the 1980s while going “nuclear-free”), or more risk aversion generally. Another factor is that New Zealanders may feel a bit threatened by bigger resource-rich Australia. On the last point, it would be interesting to see how say smaller countries with closely linked larger neighbours (like Korea and Japan, or Japan and China) perceive comparative responses. It would also be interesting to research how emigres perceive the pandemic responses in their new countries. Perhaps they are very optimistic and supportive because they want to subconsciously justify their immigration choice (Nottage, as a New Zealander who emigrated to Sydney two decades ago, may be an example), or instead very critical (perhaps linked to different disappointments in having moved country).
  • A further point that emerges from comparative analysis is that wider narratives can differ even towards a global crisis with many commonalities. Trying with difficulty to discern Australia’s narrative towards disasters during its summer of bushfires, Tom van Laer was struck that the British government typically deploys a narrative of “we can endure this”. That was developed first doing the Blitz of London during World War II, and revived to deal with IRA and later terrorist attacks. The narrative in Australia seems much less definite and consistent, and perhaps this is because the country (let alone New Zealand) has fortunately had few natural and other disasters. The narrative response by Japan’s leaders nowadays seems quite British, but is worth investigating further in comparison also with Asian countries. We should also track how narratives are evolving as, at least in Australia and some countries, the COVID-19 pandemic shifts from being primarily a health crisis to being an economic crisis. The related narrative tension was highlighted quite early in Australia by Prime Minister Morrison talking about the pandemic being about both “lives and livelihoods”, but we should track how a new story-line develops compared to the countries, as suggested towards the end of our joint blog posting.
  • In addition, drawing more directly on the disciplinary perspective of narratology (how people use stories to persuade each other), Parliament first would benefit from working more systematically and curatorially with academics in developing and supplying official narratives, props, sites and endorsements. Limiting the potential for contradictions, such collaborations increase the likelihood citizens will cope with returning from the pandemic in a similar way. Parliament too may creatively use the experience of the pandemic. For example, mementos can materialize the successful return from the pandemic to the everyday world, a transition of which to be proud.
  • Second, emotionally distress because of the pandemic experience means that there is a vital role for Parliament to play in intentional interventions designed to help citizens cope with distress step by step. It is one thing to assert that citizens can be convinced that distress is cathartic; research findings instead show transforming that distress into benefits turns out to be complex and complicated, and may require a professional approach. To clarify, a reference to theatre may be helpful. In professional productions, trained actors typically are the ones to build narrative worlds. In “method acting” they blend their primary, ordinary lives into the narrative worlds and let the narrative worlds embrace them. Meanwhile they self-consciously realize the adopted narrative world is important but nonetheless different from the “real” world, a realization which eases coping with distress. The ease of getting out of the narrative of our pandemic world therefore constitutes a skill that drama schools teaching method acting could train citizens to do too. Meanwhile, extraordinary experience providers at large can consider offering intentional interventions like consultations, courses, counselling, discussions, therapies or training.
  • Third, this Senate Committee inquiry speaks to impactful issues in experiential industries more broadly. For example, both COVID-19 and virtual reality involve narrative worlds, which may present a costly challenge. These parallels explain the rise in addiction to certain video games and particularly richer virtual reality (e.g., Zoom) to which citizens can return whenever they like, for as long or as short a time as desired. For them, these realities stand as continuous identity reaffirmation and renewal, which can occur in no other way. To stop is to diminish the self. By contrast, the pandemic world will not continue forever to place a mental or physical burden on citizens. They therefore must treat their recent extraordinary experience as a series of happenings that transported their self profoundly but temporarily. They then can process it with awareness and abandon. Resumption of disbelief in the everyday world lies close to the heart of such successful retainment of ordinary life. Citizens ought to analogise the pandemic reality as a temporary narrative world, and become (or be made) aware that their alternate reality can only contribute to transformation of the everyday world if they at least periodically withdraw and reflect. The government has many opportunities and resources to help their citizens in this endeavour.

[1] https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/COVID-19

[2] See https://japaneselaw.sydney.edu.au/2020/05/covid-19-in-asia-and-beyond-we-are-story-characters-living-in-a-new-story-world/ and forthcoming via https://sbi.sydney.edu.au/coronavirus.

[3] As Prof Francis Fukuyama notes in a recent interview, the effectiveness of  COVID-19 responses lie less in regime type, but rather whether citizens trust their leaders, and whether those leaders preside over a competent and effective state: https://supchina.com/2020/05/01/francis-fukuyama-interview-covid-19/

[4] https://mainichi.jp/english/articles/20200516/p2g/00m/0na/010000c

[5] See generally our colleague A/Prof Andrew Edgar, https://auspublaw.org/2020/03/law-making-in-a-crisis-commonwealth-and-nsw-coronavirus-regulations/

[6] Compare eg Dr Holger Hestermeyer, http://constitutionnet.org/news/coronavirus-lockdown-measures-german-constitutional-court; and https://www.lepoint.fr/societe/coronavirus-le-conseil-d-etat-limite-le-pouvoir-des-maires-17-04-2020-2371882_23.php.

[7] Nottage, Luke R., Translating Tanase: Challenging Paradigms of Japanese Law and Society (May 27, 2006). Victoria University of Wellington Law Review, Vol.39, No. 4, pp. 755-778, 2009; Sydney Law School Research Paper No. 07/17. Available at SSRN: https://ssrn.com/abstract=921932

[8] Eg in comparative studies by Nottage on consumer law (especially product liability law), corporate governance, and contract law (many freely available via https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=488525) – all areas moreover that are now hit by the COVID-19 pandemic.

[9] See eg Nottage, Luke R., Rebalancing Investment Treaties and Investor-State Arbitration: Two Approaches (June 14, 2016). Journal of World Investment and Trade, Vol. 17, No. 6, pp. 1015-1040, 2016; Sydney Law School Research Paper No. 16/54. Available at SSRN: https://ssrn.com/abstract=2795396

[10] Nottage, Luke R. and Ubilava, Ana, Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry (August 6, 2018). International Arbitration Law Review, Vol. 21, Issue 4, 2018; Sydney Law School Research Paper No. 18/46. Available at SSRN: https://ssrn.com/abstract=3227401 

[11] On the pros and cons of the eradication vs management strategies, from an interdisciplinary academic perspective, see generally the recent Go8 Report at https://go8.edu.au/research/roadmap-to-recovery

[12] Gary Hawke, https://www.eastasiaforum.org/2019/12/20/ardern-stardust-and-a-closer-than-you-would-think-2020-election/

[13] Unbridled Power (1st ed 1979), later edition reviewed here: http://www.nzlii.org/nz/journals/OtaLawRw/2005/10.html)

[14] https://www.stuff.co.nz/national/health/coronavirus/120572466/coronavirus-virus-laws-rushed-through-in-last-parliament-before-lockdown.

[15] https://thespinoff.co.nz/covid-19/28-04-2020/the-legal-basis-for-the-lockdown-may-not-be-as-solid-as-weve-been-led-to-believe/

[16] Nottage, Luke R., Reformist Conservatism and Failures of Imagination in Japanese Legal Education. Asia-Pacific Law & Policy Journal, Vol. 2, pp. 28-65, 2001. Available at SSRN: https://ssrn.com/abstract=837045

“COVID-19 in Asia and Beyond: We Are Story Characters Living in a New Story World”

Prof Luke Nottage (Sydney Law School) and A/Prof Tom van Laer (Sydney Business School)

Contemporary societies worldwide, and across the Asia-Pacific, have joined another realm. We struggle to make sense of the pandemic, ranging from the decelerated experience that continuously working from home promises, through to the immersion into COVID-19 impacts via news and social media. Engaging with this new narrative world, and eventually emerging from it, creates an ongoing challenge, which neither health professionals, nor politicians, nor policymakers address in much depth. They place emphasis on “flattening the curve,” for viral infections and economic slowdown, rather than on the complexities of transportation, transformation, and trans-mutilation as depicted in narratology[1] (how humanity uses stories to understand the world) and as experienced by ordinary citizens.

An overlooked aspect of COVID-19 is the wider story told by this intense, gripping, yet temporary pandemic.[2] This extraordinary experience creates a new narrative world, in which citizens feel as if they have escaped into a different, distinctly encapsulated frame. Narrative worlds are coherent, representative situation models woven from the distinct physical and temporal settings, props, characters, and performances that make experiences stand out.[3] Examining a narrative world can help reveal important currents and issues in socio-economic and legal ordering, offering new insights for policymakers and researchers.

1. Learning from Our New Storyline

To illustrate, this pandemic makes us feel as if we are stuck in disaster movie, but with some interesting differences from the usual Hollywood[4] (or Bollywood[5]) narratives. Thinking first of the herors, the main ones are those combatting the invidious coronavirus pandemic: the health professionals, especially the government medical officers, the front-line doctors and nurses, but (curiously) not really the psychologists or pharmacists.

The other unexpected heroes are those that usually do not feature: the supermarket staff on checkouts or (even more invisibly) stacking shelves, the truck drivers, or those making or delivering takeaways.

A few politicians are heroes too (or villains), but in a much reduced cast. Only few leaders of governments are prominent. Opposition leaders struggle to remain relevant. Not to mention the hundreds of other parliamentarians that usually vie for and get some media attention.

Everyone else is like an extra: paid a little to do not very much over long periods! These multitudes merely provide a the backdrop for the heroes to develop the movie’s storyline.

Largely missing are other groups that sometimes feature in disaster movies, or indeed disaster management scenarios in real life. Belatedly, in Act II, the economists are surfacing more, as the health challenges from Act I become better known and outcomes are generally improving. Economists, including central bankers[6] who usually take a low profile,[7] need to work out how to maintain or revive economies amidst ongoing uncertainties over a cure or vaccine.

The jurists remain largely missing in action, despite the introduction of “executive rule” (with many parliaments suspended)[8] and limited access to courts (as traditional bastions for civil liberties). But data privacy lawyers have sometimes made an appearance, eg on safeguards for the new COVIDSafe tracing App being encouraged by the Australian government for contact tracing).[9]

We also rather rarely hear of the sociologists, philosophers, theologians and even political scientists, who usually help us to make broader sense of the societies we live in. Nor do we hear much from academics more generally, unless working with those developing vaccines or specialising in public health.[10] However, for example, some Australian universities are now trying to highlight their wider interdisciplinary expertise,[11] as the sector takes a large hit in revenue due to declines especially in foreign student enrolments.[12]

So the scenario we are living through and see unfolding around us offers an opportunity to test whether there is a reversal of “the death of expertise”. Tom Nichols reviewed that phenomenon in 2017, although focusing more on postmodern Western rather than Asian societies.[13] Seeing ourselves in a disaster movie, in this way, can also provide insights into which groups of experts figure more prominently in public policy making generally.

2.       Other Insights from and for Japan and Other Asian Societies

The COVID-19 pandemic also highlights the resilience or perhaps revival of community norms in contemporary societies, even in highly developed Asia-Pacific economies. We often observe the importance of such norms from disaster management studies.[14]

In particular, in the short-term relief phase, examples of cooperative and altruistic behaviour tend to far outweigh selfishness or illegal behaviour (such as looting), contrary to the fears of Thucydides during the Athenian plague of 430BC.[15] This often extends to the post-disaster reconstruction phase, although politics and business as usual can then resurface, and effectiveness depends significantly on measures of “social capital” (such as participation in neighbourhood associations or religious groups) that vary across states and even localities. The impact of such community norms and institutions can also make a big difference in the disaster-planning phase.[16] Rural Taiwan’s effective cooperation against Covid-19[17] provides an interesting recent example for further comparative studies.

Japan’s response is also fascinating. It maintained economic activity longer than many Asian countries, although so for example did Taiwan and Korea.[18] Japan’s original policy stance has been criticised by some commentators, especially perhaps those sceptical about an earlier administration’s management of the 2011 earthquake/tsunami/radiation disasters. Yet Japan’s (still) low per capita death rate,[19] as well as another strong recent electoral result for the Abe Administration in 2019,[20] could explain this original policy stance. Nonetheless, as infections and testing grew,[21] the government declared a state of emergency last month — recently extended[22] — and “encouraged” dramatic reductions of sales and movements.[23]

Unusually, the central and local governments did not set criminal sanctions and use the police to enforce the restrictions. Instead they relied on appeals to narratives of civic virtue and consideration for others, albeit underpinned by the more instrumentalist power (and eventually practice) of “shaming” some miscreant businesses by “warning” the public if they remained open.[24]

An official reason for not mobilising the police was this would violate civil liberties enshrined in Japan’s (post-War, US-inspired) Constitution. Yet that, like other constitutions around the world, have provisions arguably justifying tougher interventions and sanctions.[25] One more likely explanation is that such measures, especially if introduced by a centre-right government, would remind its citizens (and neighbouring countries) of Japan’s militarist past – countering persistent efforts to substitute a narrative of “modern” freedoms and even pacifism.[26]

Another explanation is that Japanese leaders and policy-makers are aware that communitarian norms and respect for authority (and experts) remain comparatively strong. An analogy in Sweden, where leaders and policymakers still rely on community rather than legal norms despite a much higher death rate.[27]

Japan’s evolving experiment therefore raises another longstanding question: the importance of law in contemporary socio-economic ordering. Commentators have persuasively criticised an earlier “cultural relativist” theory that low civil litigation rates or less reliance on detailed contracts can simply be explained by “pre-modern” consensus-oriented or Confucian norms. Instead, they identified cost-benefit motivations for elites or individuals behind such outcomes.[28] Building on both storylines, the government itself has tried to promote a more active use of the legal system since the economic slowdown from the 1990s, including through wide-ranging justice system reforms.

Yet Japan seems to have reached a new equilibrium,[29] allowing an enhanced role for law while being cautious of its over-reach and conscious of the usefulness of maintaining strong communitarian values.[30] This balance, or tension, arguably becomes more visible in disaster situations in Japan, as also during the 2011 earthquake/tsunami/radiation disasters. It is therefore a topic worth comparing now across other Asian countries.

3. Emerging from the Pandemic into Another Narrative World

Over the course of the pandemic narrative world’s end, it will transcend its extraordinary nature. Sociologists and historians remind us that many tangible improvements come out of disasters.[31] Yet the narrative world that originates in the pandemic will also feed or “bleed” into the everyday world. Citizens can either transform this bleed into benefits that enrich their lives, or “trans-mutilate” it so that their lives remain immune. Reflecting on the discourses that surround the COVID-19 pandemic, we observe that many people “seek bleed out.” They want triggers, they want change, and they want transformation.

Deconstruction of the pandemic’s narrative world can have a pronounced transformative effect on these people. After the COVID-19 pandemic is over, many citizens will reveal how their behaviour, feelings, and thoughts in the narrative world are leaving traces with them afterwards, because of the world’s absence. By keeping the portal wedged open, traces of the narrative world’s presence will remain with these COVID-19-survivors and spread discernibly into the wider everyday world. Coping with these traces will offer purgative relief from these distressing emotions.

COVID-19 will change us. It will force us to face personal demons; to ask ourselves essential questions about the nature of humanity, of love, of choice. It will teach us new things about hope, and about loss. We will feel like we leave parts of ourselves stumbling around in that disaster movie. In return, we will bring back home a new piece of our humanity, of our innocence. We will thus become more aware of other worldviews through the extraordinary experience of the COVID-19 pandemic. Because of its absence, people will become more conscious of conspicuous consumption, of new relationships and sides to our identities.

However, challenged to negotiate the portal threshold between the narrative and the everyday world, not all citizens will gratefully receive these valuable aids to narratively sourced enculturation and instruction. Some COVID-19-survivors will not use narrative-provided meanings to further their worldviews and identity projects, and suit new consumption purposes and relationship statuses. Various survivors will fence off the narrative world of the pandemic, close the portal, and as such engage in strategies that trans-mutilate the narrative benefits passed onto them. The emotional distress they suffer will be cathartically powerless.

We wonder whether leaving our current novel narrative world will help consumers eventually. Will citizens suffer more after this episode, because they have experienced the benefits, yet are unable to escape their daily lives? We answer that citizens will suffer more soon after this narrative world has ended—but less eventually—if they analyse and take away the narrative benefits so as to transform the daily lives they can never escape.


[1] van Laer, Tom, Jennifer Edson Escalas, Stephan Ludwig, and Ellis A. van den Hende (2019), “What Happens in Vegas Stays on Tripadvisor? A Theory and Technique to Understand Narrativity in Consumer Reviews,” Journal of Consumer Research, 46 (2), 267–85. doi:https://doi.org/10.1093/jcr/ucy067

[2] “[F]or peripatetic (auto)didacticism is the homo narrans’s preferred mode of knowing” (italics in original): Joy, Annamma and John F. Sherry (2003), “Speaking of Art as Embodied Imagination: A Multisensory Approach to Understanding Aesthetic Experience,” Journal of Consumer Research, 30 (2), 259-82. doi:https://doi.org/10.1086/376802

[3] Gerrig, Richard J. (1993), Experiencing Narrative Worlds: On the Psychological Activities of Reading, New Haven, CT: Yale. doi:https://yalebooks.yale.edu/book/9780300054347/experiencing-narrative-worlds

[4] E.g. Contagion (2011), https://www.imdb.com/title/tt1598778/

[5] E.g. Bhopal Express (1999), https://www.imdb.com/title/tt0281656/

[6] https://www.eastasiaforum.org/2020/05/03/central-bankers-open-up-the-pandemic-box/

[7] Prof Annelise Riles, https://einaudi.cornell.edu/annelise-riles-secret-life-central-bankers

[8] E.g. my colleague A/Prof Andrew Edgar: https://auspublaw.org/2020/03/law-making-in-a-crisis-commonwealth-and-nsw-coronavirus-regulations/

[9] https://www.sydney.edu.au/news-opinion/news/2020/04/28/experts-examine-the-covid-19-tracing-app.html

[10] As somewhat of an exception, as a blog funded by Australian universities, see https://theconversation.com/au/topics/coronavirus-5830.

[11] https://go8.edu.au/research/roadmap-to-recovery

[12] https://www.abc.net.au/news/2019-08-21/australian-universities-too-dependent-on-chinese-students-report/11427272

[13] https://global.oup.com/academic/product/the-death-of-expertise-9780190469412?cc=au&lang=en&

[14] Nottage, Luke R. and Nasu, Hitoshi and Butt, Simon, Disaster Management: Socio-Legal and Asia-Pacific Perspectives (May 12, 2013). ASIA-PACIFIC DISASTER MANAGEMENT: COMPARATIVE AND SOCIO-LEGAL PERSPECTIVES, Simon Butt, Hitoshi Nasu and Luke Nottage, eds., Springer, pp. 1-58, 2014; Sydney Law School Research Paper No. 13/36. Available at SSRN: https://ssrn.com/abstract=2263953

[15] Frank Furedi, Coronavirus: Pandemics remind us of the power of community [[=“Adversity Begets Brave New World” in print version] The Australian (2-3 May 2020)

[16] Daniel Aldrich, https://press.uchicago.edu/ucp/books/book/chicago/B/bo13601684.html

[17] https://www.eastasiaforum.org/2020/04/30/rural-taiwans-community-cooperation-against-covid-19/

[18] https://www.economist.com/asia/2020/03/30/south-korea-keeps-covid-19-at-bay-without-a-total-lockdown

[19] https://asiatimes.com/2020/04/why-japan-gets-no-covid-19-respect/

[20] https://www.eastasiaforum.org/2019/07/25/abe-and-the-ldp-remain-dominant-after-japans-upper-house-elections/

[21] https://www.eastasiaforum.org/2020/04/28/japans-timid-covid-19-response/

[22] https://www.theguardian.com/world/2020/may/04/japan-to-extend-state-of-emergency-covid-19-amid-fears-second-wave-could-cripple-tokyo-hospitals

[23] https://www.japantimes.co.jp/news/2020/05/03/national/japan-partially-relax-interpersonal-contact/#.Xq9dzpolGUY

[24] https://time.com/5813619/japan-coronavirus-lockdown/

[25] https://www.japantimes.co.jp/opinion/2020/04/14/commentary/japan-commentary/coronavirus-japans-constitution/#.Xq9e_ZolGUY

[26] See generally Gustafsson et al (2019) https://www-tandfonline-com.ezproxy1.library.usyd.edu.au/doi/full/10.1080/09557571.2019.1623174

[27] https://www.theguardian.com/world/commentisfree/2020/apr/21/sweden-covid-19-policy-trust-citizens-state

[28] Abe and Nottage (2006 1st ed) http://www.austlii.edu.au/au/journals/ELECD/2006/184.html

[29] Wolff, Leon and Nottage, Luke R. and Anderson, Kent, Introduction: Who Rules Japan? (February 19, 2015). WHO RULES JAPAN? POPULAR PARTICIPATION IN THE JAPANESE LEGAL PROCESS, L. Wolff, L. Nottage and K. Anderson, eds, Edward Elgar, UK & USA, 2015; Sydney Law School Research Paper No. 15/10. Available at SSRN: https://ssrn.com/abstract=2567552

[30] Nottage, Luke R., Translating Tanase: Challenging Paradigms of Japanese Law and Society (May 27, 2006). Victoria University of Wellington Law Review, Vol.39, No. 4, pp. 755-778, 2009; Sydney Law School Research Paper No. 07/17. Available at SSRN: https://ssrn.com/abstract=921932

[31] Furedi 2020, op cit.

Endurance in Japanese Law

Written by Leon Wolff (QUT), with Giorgio Fabio Colombo (ANJeL-in-Europe Convenor, Nagoya U), Luke Nottage (USydney) and Heather Roberts (ANU)

The five articles collected in Issue 49 of the Journal of Japanese Law (for the northern hemisphere “Spring” of 2020) is a celebration of Europe’s enduring legal engagement with Japan. It reflects on the strength of legal links between Europe and Japan – some long-lasting; others fleeting; and yet others, emerging and evolving. It investigates the persistence of institutional practices and norms in Japanese legal system, large tracts of which have been adopted and adapted from 19th century continental European law as well as some recent legal innovations inspired by European examples. And it celebrates this work, whether by way of country reports or scholarly investigations, in this Journal – the world’s only enduring journal dedicated to Japanese law, published and edited in Europe. 

The reports and papers in this issue, and some more to come in the next issue, emanate from a Japanese law conference held on 23 September 2019 in the university town of Pavia in the Lombardy region of northern Italy.[1] Jointly organised by the Australian Network for Japanese Law (ANJeL) and Professor Giorgio Fabio Colombo, an Italian expert on the Japanese legal system based at Nagoya University, this event was intended to be an inaugural ANJeL-in-Europe event. The monastic-like University of Pavia, with a history tracing back to the 14th century, certainly made for an impressive site to inspire hopes for future research activities on Japanese law in Europe into the future. ANJeL, too, has strong connections with Europe. ANJeL co-director Luke Nottage, for example, has held research fellowships in Germany and Italy as well as having made explicit comparisons with European law in his corpus of scholarship on Japanese business and consumer law. Co-director Leon Wolff, as his surname might indicate, has German heritage. And, as a cross-institutional network established in 2002 for research, teaching and community engagement,[2] ANJeL has welcomed European experts to its advisory board, European researchers to its global conferences, and European law teachers to its signature offshore teaching program in Kyoto and Tokyo co-organised at Ritsumeikan University campuses each February. 

Less than six months after the Pavia event, ANJeL’s plans to base future collaborative research events on Japanese law in Europe have been put on ice. This is due to the sudden and shocking intervention the COVID-19 global pandemic. Since the initial reports of a novel coronavirus emerging from the live animal wet markets in Wuhan, China, COVID-19 has spread relentlessly across the world. According to the World Health Organisation, it had infiltrated 23 countries, infecting about 2 million people and causing 123,000 deaths.[3] Northern Italy, where the ANJel-in-Europe conference was held, became one the worst hit epicentres for the disease. The per-capita death rate remained the highest at the time of writing. This public health crisis has not only cost lives; it has shuttered swathes of the global economy, halted travel and reconfigured human interaction. Uncertainty is the new norm. It is unclear when the pandemic will be brought under a control; when a vaccine will become available; what restrictions will be imposed or relaxed; or how the world will change after the worst is over.

One thing, however, is certain. The pandemic will not endure. Although it will carry long-lasting effects, it will come to an end.

This observation stands in contrast to the overarching theme of this collection of papers: endurance. Specifically, the contributors have posed two linked research questions that engage this theme. The first is about the nature of the legal relationship between Japan and different parts of Europe. Why is there longstanding legal exchange between Japan and some parts of Europe, and only fleeting or emerging links in others? What historical and contemporary trends explain the unevenness in the Europe-Japan legal relationship? The second question concerns the functioning of key Japanese legal institutions, specifically, the judiciary, the legal profession and the criminal justice system. To what extent do the traditional functions of these legal institutions endure or persist despite the overlay of reform, the forces of (post-)modernisation and the pressure of interest groups? And how do we explain Japan’s tendency for institutional evolution rather than transformative change?

A report on “The State of Japanese Legal Studies in Europe” is the first comprehensive attempt to map Japanese legal studies across Europe. Reflecting on the trajectory of Japanese legal studies across the continent, the relative influence of Japanese Studies or Comparative Law on this trajectory, and the key research or teaching initiatives, the team of contributors covers Italy (Giorgio F. Colombo), France (Béatrice Jaluzot), Israel (Wered Ben-Sade), Scandinavia (Roger Greatrex), Spain (Francisco Barberán), Belgium and The Netherlands (Dimitri Vanoverbeke), Germany (Harald Baum and Moritz Bälz) and the United Kingdom (Luca Siliquini-Cinelli). Although the Japanese legal system is accessible to many European legal researchers because the Japanese system of codified laws draws heavily on a patchwork of European transplants, the motivations among Europeans to engage seriously with Japanese law vary widely. It might be inspired by the strong tradition of Japanese law scholars to research aspects of  European law and forge scholarly links (such as France); the growth of the Japanese economy since the 1970s and its significance to European economies (such as Germany and the Low Countries); the lure of Japanese society and culture (such as Italy and Spain); or the personal passions and scholarly initiatives of individual researchers (all countries, but consider especially Israel and Scandinavia). Japanese law scholarship – whether long-lasting (France), rich and voluminous (Germany), emerging (Italy), patchy (Scandinavia) or nascent (Israel) – finds diverse expression across Europe.

The next three articles explore different legal institutions in Japan: the legal profession (Masako Kamiya), the judiciary (Souichiro Kozuka) and the criminal justice system (David Johnson and Dimitri Vanoverbeke). In “The Style and Role of Judgments by Japanese Courts: How They are Written and Read”, Kozuka argues that case reporting decisions in Japan reflect a deliberate judicial policy of social conservatism. Specifically, which decisions get published in official reporter series, and how they should be written, reflects an institutional imperative to maintain public confidence in the court system through the cautious development of social policy through law; this contrasts with the broader goals of the common law system to ensure  incremental and coherent development of legal doctrine itself. Kozuka, however, rejects the view that the courts, especially the Supreme Court, are archly conservative. Rather, through an analysis of recent legal decisions on controversial issues, the Court and the Japanese judiciary as a whole ensure that the development of social policy through the law is carefully aligned with legislative history, accepted canons of statutory interpretation and criterion-referenced balancing tests.

In “Disciplinary Procedure: What it Tells Us about Practicing Attorneys in Japan”, Kamiya explores the disciplinary and dispute resolution procedures available to clients dissatisfied with the conduct of their case by their lawyers. Kamiya argues that, to be sure, lawyers take ethical and misconduct complaints seriously, and the Japanese Bar’s oversight powers can be successful in punishing and weeding out serious offenders of legal ethics. However, Kamiya makes the case that bar associations’ complaints-handling and dispute resolution procedures do little to enhance the autonomy and dignity of the legal profession. This is because ethical oversight is premised on the narrower, neo-liberal view of the legal profession as a market-based service-provider rather than a broader, public-oriented philosophy of lawyers defending the rule of law and constitutional freedoms.

In “The Limits of Change in Japanese Criminal Procedure”, Johnson and Vanoverbeke express reservations about the substantive impact citizen participation has had on the Japanese criminal justice system. Although Japanese citizens judge can make findings of fact and law in serious criminal cases as lay judges, can participate in criminal trials as victims of crime, and can review non-charge decisions by prosecutors, these reforms have not had the desired democratic impact that reformers envisaged. The authors argue that this is because the reforms are too narrowly targeted and, as a result, have largely cemented the status quo rather than transformed criminal justice.

In “Gender and Law Scholarship in the Law in Japan Field: A Comprehensive Bibliographic Study”, Levin and Hiraoka provide a valuable resource for researchers by indentifying around 150 works published between 1962 and 2019, divided into multiple sub-topics. Indeed, their listing suggests that gender is not only an “enduring” topic in the English-language literature on Japanese law, but also perhaps an “escalating” topic. The second edition of Japanese Business Law in Western Languages[4] had already identified around 40 publications in English (plus several in German and French) directly related to women or gender, including one as early as 1979,[5] in its Part III (Individual Works: Selective Bibliography 1970-2012). This is despite that Bibliography volume being focused on Japanese law related to business, and deliberately not attempting to be comprehensive. Most of those 40-odd publications were listed under Labor Law, which also included many publications on part-time work generally. Some such publications are also listed, noting their indirect impact on women, in this helpful more recent and wide-ranging bibliography by Levin and Hiraoka.

These articles make important contributions to our understanding of the endurance of institutional design and function in the Japanese legal system. In particular, they show that conservatism — whether it is in the cautious management of reported case law, the neo-liberal philosophy that defines legal ethics, or the narrowly-focused scope of criminal justice reforms — ensure gradual transformation[6] rather than radical change in important areas of the Japanese legal system.


[1] For the conference program, key participants and abstracts of presentations, see https://japaneselaw.sydney.edu.au/2019/04/japanese-law-compared-past-present-and-future/.

[2] For more information, including about (gratis) membership, see http://www.anjel.com.au/.

[3] See https://www.who.int/emergencies/diseases/novel-coronavirus-2019 (as of 15 April 2020).

[4]Harald Baum, Luke Nottage, Joel Rheuben and Markus Thier,Japanese Business Law in Western Languages: An Annotated Selective Bibliography (Hein, New York, second edition, 2013).

[5] Catherine Brown, “Japanese Approaches to Equal Rights for Women: The Legal Framework”, in: Law in Japan 12 (1979) 29-56. These publications were identified by searching under “equal opportunity” or “equal opportunity law” (8 separate publications), “equality” (11), “gender” (7), “women” (11) and “sexual harassment” (3) without double-counting those with several of these terms in the titles.

[6] Compare also Luke Nottage, Leon Wolff and Kent Anderson (eds) Corporate Governance in the 21st Century: Japan’s Gradual Transformation (Elgar, 2008), especially chapter 2 (with a version also at https://ssrn.com/abstract=885367).


Submission to ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) upgrade consultation

[The following analysis provided to Australia’s Department of Foreign Affairs and Trade (Regional Trade Agreements Division) is relevant also for assessing Australia’s other trade and investment agreements, including with Japan bilaterally and through regional treaties such as the CPTPP and the recently concluded Regional Comprehensive Economic Partnership.]

Thank you for the opportunity to provide a submission to this important public consultation. I see some others are online,[1] and please upload there my present submission. Unfortunately other commitments probably preclude my attendance at the Thursday 2 April meetings in Sydney, but please let me know that day’s timetable as one or more of my co-researchers cited below may be willing and able to attend.

1. For the Services chapter, an important matter for Australia to review will be provisions around delivery of education. The coronavirus epidemic this year has highlighted that Australia’s FTAs (even more recent ones as with China) often do not include commitments allowing cross-border supply (ie service delivery over the internet), which may otherwise conflict with the national laws in our overseas partners.[2] As well as negotiating more expansive commitments, Australia should seek to draft in provisions around procedures for meeting and discussing urgently with counterparties about counter-measures during public health emergencies, as suggested by our A/Prof Jeanne Huang at the recent SCIL International Law in Review conference (in the context of China-Australia FTA upgrades). Such procedural provisions could also be extended to other chapters, including Trade in Goods.

2. For the Investment chapter, AANZFTA in 2009 originally lacked significant liberalisation commitments.[3] A work program for negotiations around expanding market access was envisaged but never completed.[4] This AANZFTA upgrade should at least lock in (through Schedules) liberalisation commitments made under other treaties concluded by Australia with counterpart ASEAN states (including the still undisclosed RCEP), but should go further to provide “value added”. If a Work Program is agreed for further negotiations, the revised AANZFTA should include commitments about when and how to meet, including provisions allowing for public consultation.

3. For the Investment chapter, on protections for foreign investors (including significantly now into ASEAN compared to a decade ago),[5] Australia presumably goes into upgrade negotiations using its most recent significant treaties as a starting point, especially the US-style template (building on NAFTA and epitomised by the CP/TPP) that has become the most common drafting approach around the Asia-Pacific region more generally.[6] However, views around ISDS-backed protections have changed in recent years, regionally (with the EU proposing several novel features, impacting also on Asia[7]) and in multilateral forums (UNCTAD, ICSID and especially UNCITRAL). Australia needs to become more consistently pro-active (arguably working with close partners especially New Zealand) in addressing persistent concerns about ISDS-backed protections in investment agreements, and this review of AANZFTA therefore should propose:

3.1 Minimising costs and delays through promoting amicable settlement,[8] by allowing a disputing party to require the other to attempt to mediate an investment dispute, before proceeding to arbitration. (This was provided under Australia’s recently signed bilateral FTA with Indonesia, although that was seemingly proposed by Indonesia and only allows the host state to compel mediation,[9] whereas an investor should be able to compel it too.).

3.2 Maximising transparency around ISDS (including disclosure around third-party funding) by explicitly adopting the UNCITRAL Transparency Rules (as under Australia’s recently revised BIT with Uruguay), and/or including similar provisions in the upgraded AANZFTA investment chapter text (as under the CP/TPP and/or Australia’s recent bilateral FTA with Peru).[10] Greater transparency benefits almost all stakeholders, not just (especially democratically accountable) host states but also foreign investors (able therefore to better expose protectionist or other vested interests in host states, to the detriment of other groups in those host states).[11] This is also consistent with Australia’s current efforts to ratify the UN Mauritius Transparency Convention; but that only retrofits greater ISDS transparency around pre-2014 treaties even if counterparties ratify that multilateral instrument too in future.

3.3 Further enhancing legitimacy around ISDS by expressly prohibiting “double-hatting” (arbitrators acting also as counsel), as under the CPTPP Code of Conduct,[12] as well as recent EU treaties (albeit for its now-preferred “investment court” alternative to traditional ISDS). Curiously Australia has not provided such an express prohibition in any other treaty, even its recent FTA with Peru (although both states are supposed to issue Guidance for ISDS arbitrators now that it is in force, so that prohibition might still be added there).

3.4 Australia should propose the “public welfare notice” procedure added uniquely in its FTA with China. This usefully suspends ISDS claims while the home state discusses with the host state potential defences relating to public welfare interests in the host state.[13]

3.5 However, as another aspect relating to public health risks such as coronavirus, the AANZFTA upgrade should consider express provisions expediting cross-border movement of senior management related to foreign investments, even in emerging emergency situations.

4. For the Competition chapter, this should be upgraded at least to CPTPP-style standards, but it should be boosted by more expansive Consumer Protection provisions especially now that ASEAN states have made significant (albeit sometimes patchy) progress in this field over last decade as part of building the ASEAN Economic Community.[14] I understand my Business School colleague Prof Gail Pearson has completed an ACCC-funded scoping project, so urge that to be publically disclosed so further informed comment and publically discussed. I also repeat my longstanding calls for Australia to seek provisions in FTAs that require or at least allow respective regulators to exchange consumer product safety accident-related information with their counterparts abroad. This could also be extended to sharing information about consumer credit related risks.[15]

5. The AANZFTA upgrade should also propose a chapter on Environmental Protection, as this is another public concern around FTAs. In particular this should incorporate this FTA’s dispute settlement procedures into other listed environmental protection treaties. The inspiration should be the CPTPP, but drafting improvements are helpfully suggested by our A/Prof Jeanne Huang.[16]


[1] https://www.dfat.gov.au/trade/agreements/in-force/aanzfta/Pages/general-review-of-the-asean-australia-new-zealand-fta.aspx

[2] Huang, Jeanne, https://erga-omnes.sydney.edu.au/2020/02/coronavirus-outbreak-and-teaching-chinese-students-online-legal-issues-that-australian-universities-should-know/

[3] Bath, Vivienne and Nottage, Luke R., The ASEAN Comprehensive Investment Agreement and ‘ASEAN Plus’ – The Australia-New Zealand Free Trade Area (AANZFTA) and the PRC-ASEAN Investment Agreement (September 26, 2013). INTERNATIONAL INVESTMENT LAW: A HANDBOOK, M. Bungenberg, J. Griebel, S.Hobe & A. Reinisch, eds., Nomos Verlagsgellschaft: Germany, 2015; Sydney Law School Research Paper No. 13/69. Available at SSRN: https://ssrn.com/abstract=2331714

[4] Bath, Vivienne and Nottage, Luke R., International Investment Agreements and Investor-State Arbitration in Asia (February 26, 2020). Sydney Law School Research Paper No. 20/08. Available at SSRN: https://ssrn.com/abstract=3544458 (footnotes omitted):

“The AANZFTA provides that the provisions on NT in the Investment Chapter will not come into effect until the Schedules of Reservations were finalized (Art 11.16) under a Work Program. Further negotiations on an MFN provision were also to take place under the Work Program (Art 11.16).  This has not been completed. Indeed, review of the investment chapter was paused in 2017 pending the finalisation of the RCEP, although the Economic Ministers of ASEAN, Australia and New Zealand noted in late 2019 the Upgrade Negotiations to amend the AANZFTA (for the second time) as a result of a review which will include the investment chapter.”

[5] See ASEAN Investment Report 2018 ch1, via https://asean.org/asean-investment-report-2018-published/

[6] Alschner, Wolfgang and Skougarevskiy, Dmitriy, The New Gold Standard? Empirically Situating the TPP in the Investment Treaty Universe (November 20, 2015). Journal of World Investment & Trade, Vol. 17, pp. 339-373 . Available at SSRN: https://ssrn.com/abstract=2823476 or http://dx.doi.org/10.2139/ssrn.2823476

[7] Kawharu, Amokura and Nottage, Luke R., Models for Investment Treaties in the Asian Region: An Underview (September 21, 2016). Arizona Journal of International and Comparative Law, Vol 34, No. 3, pp. 462-528, 2017 ; Sydney Law School Research Paper No. 16/87. Available at SSRN: https://ssrn.com/abstract=2845088

[8] See generally, forthcoming in JWIT: Ubilava, Ana, Amicable Settlements in Investor-State Disputes: Empirical Analysis of Patterns and Perceived Problems (March 13, 2019). Sydney Law School Research Paper No. 19/17. Available at SSRN: https://ssrn.com/abstract=3352181

[9] Ubilava, Ana and Nottage, Luke R., Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS Policy: The CPTPP, Hong Kong, Indonesia and Mauritius Transparency Treaties (March 4, 2020). Sydney Law School Research Paper No. 20/12. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3548358

[10] Ibid.

[11] Burch, Micah and Nottage, Luke R. and Williams, Brett G., Appropriate Treaty-Based Dispute Resolution for Asia-Pacific Commerce in the 21st Century (May 24, 2012). University of New South Wales Law Journal, Vol. 35, No. 3, pp. 1013-1040; Sydney Law School Research Paper No. 12/37. Available at SSRN: https://ssrn.com/abstract=2065636

[12] See Nottage, Luke R. and Ubilava, Ana, Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry (August 6, 2018). International Arbitration Law Review, Vol. 21, Issue 4, 2018; Sydney Law School Research Paper No. 18/46. Available at SSRN: https://ssrn.com/abstract=3227401;

and Concept Paper on Arbitrator Independence via https://www.cids.ch/academic-forum-concept-papers

[13] For more details see Nottage, Luke R., Investment Treaty Arbitration Policy in Australia, New Zealand – and Korea? (August 13, 2015). Journal of Arbitration Studies, Vol. 25, No. 3, pp. 185-226, 2015; Sydney Law School Research Paper No. 15/66. Available at SSRN: https://ssrn.com/abstract=2643926

[14] Nottage, Luke R. and Malbon, Justin E. and Paterson, Jeannie Marie and Beaton Wells, Caron Y., ASEAN Consumer Law Harmonisation and Cooperation: Backdrop and Overarching Perspectives (June 3, 2019). Luke Nottage, Justin Malbon, Jeannie Marie Paterson and Caron Beaton-Wells, “ASEAN Consumer Law Harmonisation and Cooperation: Achievements and Challenges”, Cambridge University Press (2019); Sydney Law School Research Paper No. #19/32. Available at SSRN: https://ssrn.com/abstract=3398046

[15] Nottage, Luke R., Free Trade Agreement and Investment Treaty Innovations to Promote More Sustainable Financial Markets for Consumers (July 2, 2014). THE GLOBAL FINANCIAL CRISIS AND THE NEED FOR CONSUMER REGULATION: NEW DEVELOPMENTS ON INTERNATIONAL PROTECTION OF CONSUMER, C. Lima Marques, D. P. Fernandez Arroyo, I. Ramsay, G. Pearson, eds., Orquestra Editora, Brazil, 2012; Sydney Law School Research Paper No. 14/59. Available at SSRN: https://ssrn.com/abstract=2461568

[16] Huang, Jie Jeanne and Hu, Jiaxiang, Can Free Trade Agreements Enhance MARPOL 73/78 Compliance? (October 3, 2018). Tulane Maritime Law Journal, Vol. 43. 2018, pp. 59-91; Sydney Law School Research Paper No. 18/62. Available at SSRN: https://ssrn.com/abstract=3259734

“New Frontiers in International Arbitration for the Asia-Pacific Region”: Symposium 17 June 2020 (2-5pm) at/with Taylor’s University, Kuala Lumpur

Supported also by the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), Sydney Southeast Asia Centre (SSEAC) & Asian International Arbitration Centre (AIAC)

This half-day symposium brings together academic researchers and practitioners in international dispute resolution, exploring new developments regionally impacting on international commercial arbitration as well as investor-state dispute settlement (ISDS). These extend to initiatives around cross-border mediation, international commercial courts, and China’s Belt and Road project. The symposium builds on a research project over 2019 between the University of Sydney and Hong Kong University (focusing on Australia, HK, China, Japan and Singapore)[1], to examine more closely developments also in Malaysia and other parts of Asia.

Please register your attendance for this complimentary symposium via email to avijayalakshmi.venugopal@taylors.edu.my.

Time Session
2-2.10 pm Welcome Message Mr. Harmahinder Singh Head, Taylor’s Law School, Taylor’s University
2.15-2.40 pm Mediating Japan-Korea Trade and Investment Tensions[2] Professor Luke Nottage Sydney Law School, University of Sydney
2.45-3.10 pm Recent Developments of Institutional Arbitration in China: Specialization, Digitalization and Internationalization[3] Associate Professor Jie Huang Sydney Law School, University of Sydney
3.15-3.40 pm Malaysia’s Involvement in International Business Dispute Resolution[4] Dr. A. Vijayalakshmi Venugopal Taylor’s Law School, Taylor’s University
3.45-4 pm Closing Remarks Professor Luke Nottage & Dr. A. Vijayalakshmi Venugopal
4-4.40 pm Refreshments  

Speakers’ Profiles

Dr Luke Nottage (BCA, LLB, PhD VUW, LLM Kyoto) specialises in comparative and transnational business law (especially arbitration, investment law, contract and consumer law), with a particular interest in Japan and the Asia-Pacific. He is Professor of Comparative and Transnational Business Law at Sydney Law School, founding Co-Director of the Australian Network for Japanese Law (ANJeL), and Associate Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). He has held fellowships at other leading institutions in Japan and Australia as well as Germany, Italy, Canada and Thailand.

Luke’s 16 books include International Arbitration in Australia (2010, eds), Foreign Investment and Dispute Resolution in Asia (2011, eds), International Investment Treaties and Arbitration Across Asia (2018, eds), Contract Law in Japan (2019) and ASEAN Consumer Law Harmonisation and Cooperation (2019, both co-authored).

He has or had executive roles in the Australia-Japan Society (NSW), the Law Council of Australia’s International Law Section, the Australian Centre for International Commercial Arbitration, and the Asia-Pacific Forum for International Arbitration. Luke is also a Rules committee member of ACICA and listed on the Panel of Arbitrators for the AIAC (formerly KLRCA), BAC, JCAA, KCAB, NZIAC, SCIA and TAI. Luke has consulted for law firms world-wide, the EC, the OECD, the UNDP, ASEAN and the Japanese government; and has contributed to arbitration and consumer law reform and investment treaty-making in Australia. He qualified as a lawyer in New Zealand in 1994 and in New South Wales in 2001.

Dr Jie (Jeanne) Huang, SJD (law) Duke University School of Law in the US; Master of International Law and LLB, Shanghai University of International Business and Economics in China. Dr. Jeanne Huang is an associate professor at the University of Sydney Law School in Australia. She is widely known for her research on legal issues in digital trade and e-commerce, international investment and Chinese law. She has published four books and authored many articles in leading peer-reviewed law journals, such as Journal of International Economic Law and Journal of Private International Law. Twelve of her articles are indexed by SSCI. She has received funding from University of Sydney, University of New South Wales, China National Social Science Fund general project (equivalent to Australian ARC), China Ministry of Education, the China Law Society, Shanghai Philosophy and Social Science Fund, and Shanghai Government Development and Research Centre Fund on research topics related to international trade and investment regulations.

Dr. A. Vijayalakshmi Venugopal (LLB, MEd(Psy), LLM, PhD) is a Senior Lecturer in Taylor’s Law School, teaching various modules in the LLB and LLM degrees, including Alternative Dispute Resolution, Law of the World Trade Organization and International Sale of Goods. She has supervised a number of LLM theses on international arbitration. She is the author of 3 books and various articles on law. She has also presented conference papers on and been a trainer in education. She qualified as an advocate and solicitor in Malaysia.


[1] https://japaneselaw.sydney.edu.au/2019/02/

[2] Claxton, James M. and Nottage, Luke R. and Williams, Brett G., Mediating Japan-Korea Trade and Investment Tensions (December 3, 2019). Sydney Law School Research Paper No. 19/73. Available at SSRN: https://ssrn.com/abstract=3497299.

[3] Jie (Jeanne) Huang (2019), Recent Developments of Institutional Arbitration in China: Specialization, Digitalization and Internationalization, in Julien Chaisse & Jiaxiang Hu (Eds), International Economic Law and the Challenges of the Free Zones, (pp. 251-275), Wolters Kluwer.

[4] Venugopal, A. V., Malaysia’s Involvement in International Business Dispute Resolution, in Ali, S., Jetin, B.; Nottage, L.; and Teramura, N., New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution, Wolters Kluwer.

“Ghosn is gone”: criminal justice and corporate governance in Japan

[Updated 12 February 2020] Japan welcomed in the New Year of the Mouse (or Rat) with intense media coverage nationally and internationally about former Nissan CEO then President, Carlos Ghosn, who escaped bail on 29 December 2019 to return to his native Lebanon. The ongoing saga (with background eg here) mainly highlights pros and cons of Japan’s evolving criminal justice system, where almost all prosecutions are successful. That 99% conviction rate can be seen positively: prosecutors carefully try to second-guess judges, without subjecting the accused to unnecessary trials. This enhances rule of law values such as predictability and equal treatment, even for alleged white-collar crimes (often not successfully pursued, as we have seen world-wide after the Global Financial Crisis, even in the US). But there remain concerns that Japanese prosecutors unfairly force confessions and the criminal justice system undermines other rule of law values. [These various aspects were discussed along with background shifts in the global auto industry in a 30-minute ABC National Radio program, “Ghosn has flown – the rise and fall of an auto industry mogul”, which aired on 9 February 2020 and is available as a podcast here (with extracts from my interview appearing around mid-way.)] The Ghosn affair also uncovers Japan’s relative paucity of extradition treaties, as I mentioned in a 3 January 2020 Bloomberg news article reproduced below (reprinted in the Japan Times, which continues extensive coverage).

The Ghosn case also highlights the latest (December 2019) amendments to Japan’s Companies Act, “designed to increase transparency in executive compensation at major companies in the wake of the ouster of Nissan Chairman Carlos Ghosn, who was arrested last year for allegedly understating his compensation. He has continued to deny allegations of financial misconduct. Boards of directors will now be required to disclose outlines of executive pay, such as whether it is offered in cash or shares and in a fixed or variable amount.” The revised Act also now requires companies to have at least one outside director, rather than on a “comply or explain why not” basis as under the 2014 amendments. But the revision won’t take effect until June 2021. In addition, almost all listed companies already had at least one outside director, and indeed a growing majority had at least two outside directors satisfying stricter “independence” requirements, under the 2015 Corporate Governance Code (slighted revised in 2018) that continues to apply on the comply or explain basis.

Further, as a Japan Times editorial had concluded in February 2019 (“Empower outside directors“) regarding the Companies Act amendments then being proposed by the Ministry of Justice’s law reform council:

“After the arrest of Ghosn on that and other charges that raised questions about corporate governance at the major automaker, Nissan is reportedly considering increasing the number of outside directors from the current three. However, the charges against Ghosn, who is alleged to have wielded unquestioned power within the automaker, including in deciding executive pay effectively at his own discretion, also put into question whether the outside directors have been able to play substantial roles in overseeing the firm’s management.

The arrest and indictment last year of a former outside director of an electric parts manufacturer listed on the TSE’s first section, on charges of insider trading of the firm’s shares based on confidential information he obtained thanks to his position — also highlighted the question of the quality of outside directors that companies are bringing in.

Many companies are believed to look for candidates among top executives of other firms, academics and lawmakers. The companies often reportedly face difficulties finding the right person with sufficient knowledge and expertise on corporate management. In fact, many well-qualified people are reportedly serving as outside directors at several companies simultaneously. Another question is whether the companies that tap them have established an in-house environment in which these directors can fulfil the roles expected of them, such as by providing them with sufficient access to the firm’s relevant information or by enabling them to be regularly heard by the company’s top management.

Merely making it mandatory under the law for companies to have outside directors on their board won’t be enough. A legal step like this needs to be accompanied by measures that ensure they can actually contribute to improving their company’s governance.”


Ghosn’s Escape From Japan Ramps Up Pressure on Foreign Suspects

By  Lisa DuBruce Einhorn , and  Isabel Reynolds 3 January 2020, 5:55 pm AEDT

  • Foreigners expected to face tougher time posting bail
  • Ex-Nissan boss paid record bail bill, then fled the country

The Tokyo district court let Carlos Ghosn post bail last March, overruling prosecutors’ objections that he was a flight risk. After all, how could one of the most recognizable foreigners in the country flee while under round-the-clock surveillance?

As the world learned this week, the court was wrong and Ghosn’s stunning escape is bound to bode ill for future foreign suspects seeking to post bail. Yet longer term, the fallout could carry broader implications for the pace of reforms to a justice system some regard as draconian.

“It’s ironic that Ghosn criticized the Japanese justice system as hostage justice, because the prosecutor’s judgment turned out to be right since he actually fled,” said Hiroki Sasakura, a professor at Keio University Law School in Tokyo. “His action might have a reverse effect on the criminal justice system, especially the Japanese court’s way of thinking, which was turning more liberal.”

Given the high-profile nature of the suspect, Japan’s legal system was already under heightened global scrutiny, with critics lambasting prosecutors for detaining the fallen automotive titan so long.

Even after gaining release from prison, the former head of Nissan Motor Co. and Renault SA had restricted access to family members and paid the highest bail fees in Japanese history: 1 billion yen ($9.2 million) for his first bail and then another 500 million yen after he was rearrested on new charges. And the court ordered his three passports — from Brazil, France and Lebanon — be confiscated.

(Ghosn’s Legal Odyssey and What It Says About Japan: QuickTake)

Japan is unusual for its lengthy pre-trial detentions, strict bail conditions and long delays before suspects are given their day in court, said Luke Nottage, a professor at the University of Sydney Law School and co-director of the Australian Network for Japanese Law.

More Lenience

In response to criticism from defense attorneys and after the introduction of a new jury trial system and pretrial procedures, Japanese courts in recent years were more lenient in allowing bail, Keio’s Sasakura said. A backlash has already begun, with Ichiro Aisawa, a lawmaker from Japan’s ruling Liberal Democratic Party, denouncing the decision to give Ghosn bail in the first place.

“This should have never happened,” Aisawa wrote on Twitter. “We need to establish measures so we don’t screw up ever again.”

In Japan, authorities are allowed to detain suspects for two 10-day periods for questioning before a decision is made on whether to indict. Sometimes suspects are rearrested on new charges as a way to detain them longer.

Prosecutors rarely pursue cases they think they can’t win, and Japan is known for its near-perfect conviction rate.

Those indicted in Japan may apply for bail as they await trial. About 34% of those detained received bail in 2018, according to the Japan Bail Support Association. That’s up from 15% a decade ago.

‘Rigged’ System?

Such statistics reinforce the criticism by Ghosn, who issued a statement on Dec. 31 from Lebanon saying he had fled there to escape what he called Japan’s “rigged” justice system. This may lead to further calls for a more balanced system, according to Yuichi Kaido, a lawyer who has campaigned for changes to Japan’s criminal justice system.

“I think the international community will look at Japan’s criminal justice system with great severity,” Kaido said. “There will be harsh questions raised there about Japan’s criminal justice system, including the death penalty and what is called hostage justice.”

However, the Ghosn case isn’t likely to have a lasting impact on Japan’s attractiveness as an investment destination, according to Deborah Elms, executive director of Asian Trade Centre, a Singapore-based advisory firm. Foreign companies considering investments in Japan won’t be deterred by the situation surrounding Ghosn, she added, with Asian companies accustomed to unpredictable rules.

“This is just another example of an uncertain legal system that can be worked to your advantage or could come back and bite you,” she said.

Japan should resist internal calls to retaliate by making it even more difficult for suspects to win release from prison ahead of trial, said Nobuo Gohara, a former prosecutor who has been critical of the handling of Ghosn’s case.

“It’s very unfortunate that the efforts of his attorneys to obtain bail and the court’s judgment against the prosecutors to allow it was betrayed,” Gohara wrote in a blog post. “But we shouldn’t simplify the issue to that the court shouldn’t have allowed bail.”

There’s a change that may win widespread support after Ghosn’s escape: a push for more extradition treaties. Japan has only two bilateral agreements, with the U.S. and South Korea. That compares with more than 30 for South Korea and more than 100 for the U.S.

“It’s just one of those areas where they haven’t given much thought and diplomatic attention,” said Nottage, the University of Sydney Law School professor. “The Japanese government might be thinking about maybe we need more extradition treaties.”

— With assistance by Kana Nishizawa

“New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution” (10): New Book with Kluwer

[For updates to chapter titles & authors, plus Abstracts and a link to a free related Webinar on 4 August 2020 5-6pm (Sydney time), please click here.]

Culminating a HKU/USydney joint research project and two conferences over 2019, Kluwer has agreed to publish a monograph under this title co-edited by myself, HKU Prof Shahla Ali, UBrunei A/Prof Bruno Jetin, and Dr Nobumichi Teramura. Manuscripts for the 15 chapters will be submitted by July 2020 so the book is published by early 2021, as part of Kluwer’s widely-read “International Arbitration” series supervised by QMUL Profs Julian Lew and Stavros Brekoulakis. Below is more information on the authors, editors, contributions, and expected readership/features of our new book

Book Contents:

  1. Introduction: New Frontiers in Asia-Pacific Trade, Investment and International Business Dispute Resolution – Jetin & Nottage
  2. ICA and International Commercial Courts: Singapore, Australia and Beyond – Warren & Croft (based on “An International Commercial Court for Australia: An Idea Worth Taking to Market”) [i]
  3. New Frontiers for ICA in Australia: Beyond the ‘(Un)Lucky Country’ – Teramura et al (building on “Country Report on Australia for: International Commercial Arbitration – An Asia-Pacific Perspective”[ii] and “International Commercial Arbitration in Australia: Judicial Control over Arbitral Awards”[iii])[iv]
  4. Transparency versus Confidentiality in ICA and ISDS: Australia and Japan in Regional Context – Nottage (based on “Confidentiality versus Transparency in International Arbitration: Asia-Pacific Tensions and Expectations”[v])[vi]
  5. Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS: The CPTPP and Agreements with Hong Kong and Indonesia – Nottage & Ubilava (based on “Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry”[vii] and Nottage’s parliamentary submissions regarding new treaties with HK and Indonesia[viii])[ix]
  6. Hong Kong Developments in ICA and ISDS in the Context of China’s Belt and Road Initiative – Ali (based on “ICA and ISDS Developments in Hong Kong in the Context of China’s Belt and Road Initiative”[x])[xi]
  7. Harmonising the Public Policy Exception for ICA along the Belt and Road – Gu (based on “China’s Belt and Road Development and a New International Commercial Arbitration Initiative in Asia”[xii])[xiii]
  8. PRC Developments in Private International Law, ICA and ISDS – Bath[xiv]
  9. Malaysia’s Involvement in International Business Dispute Resolution – Venugopal[xv]
  10. Japan’s New Ambitions as a Regional Dispute Resolution Hub: Better Late than Never? – Claxton, Nottage and Teramura (based on “Developing Japan as a Regional Hub for International Dispute Resolution: Dream Come True or Daydream?”[xvi])[xvii]
  11. Mediating Complex Multi-level Trade and Investment Disputes Between Japan and Korea – Claxton, Nottage and Williams (based on “Resolving Disputes Amidst Japan-Korea Trade and Investment Tensions”[xviii])[xix]
  12. Indian Investment Treaty and Dispute Resolution Practice: Assessing Recent Developments – Singh[xx]
  13. Extending Dispute Resolution Provisions in Free Trade Agreements to Better Enforce Other Treaties: The CPTPP and MARPOL 73/78 – Hu and Huang (based on “Can Free Trade Agreements Enhance MARPOL 73/78 Compliance?”[xxi])[xxii]
  14. Promoting International Mediation through the Singapore Convention – Strong (based on “The Role of Empirical Research and Dispute System Design in Proposing and Developing International Treaties: A Case Study of the Singapore Convention on Mediation”[xxiii])[xxiv]
  15. Conclusions: Expanding Asia-Pacific Frontiers – Reyes, Teramura & Ali

Editors/bios:

  • Dr Shahla Ali is Professor and Associate Dean (International) and Deputy Director of the LLM in Arbitration and Dispute Resolution at the Faculty of Law of the University of Hong Kong. Her research and practice center on questions of governance, development and the resolution of cross-border disputes in the Asia Pacific region. Shahla is the author of Court Mediation Reform (Elgar, 2018), Governing Disasters: Engaging Local Populations in Humanitarian Relief (CUP, 2016); Consumer Financial Dispute Resolution in a Comparative Context (CUP, 2013); and Resolving Disputes in the Asia Pacific Region (Routledge, 2010) and writes for law journals in the area of comparative ADR. She has consulted with USAID, IFC/World Bank and the United Nations on issues pertaining to access to justice, peace process negotiation training and land use conflict resolution. She serves as a bilingual arbitrator (English/Chinese) with CIETAC, HKIAC (ADNDRC), SIAC and has served on the IBA Drafting Committee for Investor-State Mediation Rules, the DOJ Mediation Regulatory Committee, the UN Mediation Roster and the FDRC Appointments Committee. Prior to HKU, she worked as an international trade attorney with Baker & McKenzie in its SF office. She received her JD and PhD from UC Berkeley in Jurisprudence and Social Policy and BA from Stanford University. (Further details can be found here.)
  • Dr Bruno Jetin is Associate Professor and Director of the Institute of Asian Studies, University of Brunei Darussalam (UBD). His current work focuses on the ASEAN Economic Community, the One Belt One Road initiative, Chinese investments in Southeast Asia, and the impact of income distribution on growth in Asia. He is also an expert in the automobile industry. Before joining UBD, he was a researcher at the Institute for Research on Contemporary Southeast Asia (IRASEC, CNRS-MAEE, Bangkok) and Associate Professor at the University of Paris 13 Sorbonne Paris Cité, where he obtained his PhD in economics and was Deputy Director of the Research Center in Economics. He was also involved in promoting taxes on financial transactions as alternative sources for financing development as well as innovative regulation of global finance. Bruno’s recent publications include Jetin and Mikic (eds) ASEAN Economic Community: A model for Asia-wide Integration? (Palgrave McMillan, 2016); Jetin (ed) Global Automobile Demand (2 Vols, Palgrave McMillan); Jetin and Chaisse “International Investment Policy for Small States: The Case of Brunei” in Chaisse and Nottage (eds) International Investment Treaties and Arbitration Across Asia (Brill, 2018); “One Belt-One Road Initiative and ASEAN Connectivity” in Deepak (ed) China’s Global Rebalancing and the New Silk Road (Springer, 2018). (Further details can be found here.)
  • Dr Luke Nottage specialises in comparative and transnational business law, especially international arbitration and investment law, with a particular interest in Asia. He is Professor of Comparative and Transnational Business Law at Sydney Law School, founding Co-Director of the Australian Network for Japanese Law (ANJeL), and Associate Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). His books include International Arbitration in Australia (Federation Press, 2010, eds), Foreign Investment and Dispute Resolution in Asia (Routledge, 2011, eds), International Investment Treaties and Arbitration Across Asia (Brill, 2018, eds), Contract Law in Japan (Kluwer, 2019, with Hiroo Sono et al) and 12 other volumes. Luke has or had executive roles in the Australia-Japan Society (NSW), the Law Council of Australia’s International Law Section, the Australian Centre for International Commercial Arbitration, and the Asia-Pacific Forum for International Arbitration. Luke is also a Rules committee member of ACICA and listed on the Panel of Arbitrators for the AIAC (formerly KLRCA), BAC, JCAA, KCAB, NZIAC, SCIA and TAI. Luke serves on Working Group 6 (examining arbitrator neutrality) for the Academic Forum on ISDS. He has consulted for law firms world-wide, the EC, the OECD, the UNDP, ASEAN and the Japanese government; and has made numerous public Submissions to the Australian government on investment treaties, arbitration and consumer law reform. He qualified as a lawyer in New Zealand in 1994 and in New South Wales in 2001. (Full CV downloadable here.)
  • Dr Nobumichi Teramura is Lecturer at the University of Adelaide Law School and Associate at the Centre for Asian and Pacific Law at the University of Sydney, specialising in international commercial law, especially private international law, arbitration, contract law, with a particular interest in Asia and Australasia. He is the author of Ex Aequo et Bono as a Response to the Over-judicialisation of International Commercial Arbitration (Kluwer, 2020 [forthcoming]). He has published and presented his research extensively in various journals and at academic conferences in different jurisdictions in both English and Japanese. He has also received scholarships and fellowships in highly competitive rounds from leading research institutions or foundations and from the Japanese Government. He was invited to De La Salle University in the Philippines (one of its top law schools) three times over 2016-2019 to teach arbitration and international commercial law, first as a visiting lecturer and later as a distinguished visiting professor.

Other book contributors:

  • Professor Vivienne Bath (Director of the Centre for Asian and Pacific Law at the University of Sydney)
  • Professor James Claxton (Kobe University Law School, Japan)
  • The Hon Dr Clyde Croft AM SC (former Judge of the Victorian Supreme Court)
  • Professor Hu Jiaxiang (KoGuan Law School, Shanghai Jiao Tong University, China)
  • A/Professor Jeanne Huang (University of Sydney Law School)
  • James Morrison (Principal of Morrison Law, Sydney; former ACICA Acting Secretary-General)
  • Justice Anselmo Reyes (Singapore International Commercial Court)
  • Prof Jaivir Singh (Centre for the Study of Law and Governance, Jawaharlal Nehru University, India)
  • A/Professor Stacie Strong (University of Sydney Law School, from January 2020)
  • A/Professor Gu Weixia (University of Hong Kong Faculty of Law)
  • Mrs Ana Ubilava (Research Assistant and PhD candidate at the University of Sydney Law School)
  • Professor Marilyn Warren AC QC (former Chief Justice of the Victorian Supreme Court)
  • Dr A Vijayalakshmi Venugopal (Senior Lecturer, Taylor’s University Law School, Malaysia)
  • Dr Brett Williams (Principal of Williams Trade Law, Sydney)

Book Aims, Necessity, Features/Benefits

This book project examines the challenges and opportunities for developing international commercial arbitration (ICA) and arbitration through investor-state dispute settlement (ISDS) particularly in the Asia-Pacific region.

Analysing ICA, the pre-eminent mechanism for resolving cross-border disputes among firms, this book builds on Anselmo Reyes & Weixia Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia-Pacific (Hart, 2018), but examines more recent challenges for ICA. These include the proliferation of international commercial courts (including in Singapore, but also elsewhere and potentially in Australia) as well as the UN’s 2019 Singapore Convention on enforcement of mediated settlement agreements (Singapore Convention on Mediation). There is also competition now among regional centres to become attractive venues for international business dispute resolution, including resolving “Belt and Road” disputes. The present book focuses mainly on Hong Kong and Singapore (competing jurisdictions in the top “Stage 4” for ICA venues, as identified by Reyes & Gu), Australia and Malaysia (“Stage 3” venues), China and Japan (arguably transitioning from “Stage 2” to “Stage 3”), and India (“Stage 2”) but it in a wider Asia-Pacific context.

In addition, this book project compares approaches in these jurisdictions to ISDS, but we also touch on treaties concluded by Indonesia and Korea as other significant economies in the region. The ISDS procedure allows a foreign investor to bring arbitration claims directly against host states if they violate substantive commitments, such as not discriminating in favour of local investors or expropriation without adequate compensation, usually based on a treaty with the home state of the foreign investor. ISDS has become increasingly controversial as claims have been brought against developed countries, not just developing countries where this enforcement mechanism brings the greatest comfort for foreign firms considering investments. Going beyond Julien Chaisse and Luke Nottage (eds) International Investment Treaties and Arbitration Across Asia (Brill, 2018) [with an introduction partly here], this book project charts evolving treaty practices and high-profile ISDS cases, assesses whether these do or might impact on public attitudes even towards ICA or other forms of arbitration, and explores alternatives or complements to ISDS arbitration.

Why is there a need for it? / Why is now a good time to produce it?

ICA is already “big business” for leading regional venues such as Singapore and Hong Kong. But the recent social unrest in Hong Kong highlights the potential for unexpected developments, and other regional jurisdictions are anyway seeking to emulate their success. These competing venues include mainland China (where arbitrators and courts have growing capacity in cross-border matters), Australia (which may become a venue for some Belt and Road disputes) and Japan (belatedly establishing new international arbitration and mediation facilities). Yet businesses are increasingly concerned about the costs and delays in ICA. They are considering emerging alternatives such as international commercial courts or cross-border mediation, underpinned by new multilateral treaties. Established and emerging jurisdictions for international commercial arbitration therefore need to consider how to position themselves relative to these new frontiers.

ISDS arbitration is also a large and growing area of legal practice, with more engagement recently by Asian parties, yet it too faces challenges. The Philip Morris Asia claim brought under an old Hong Kong investment treaty against Australia to challenge its plain packaging legislation, although unsuccessful, led to Australia refusing over 2011-13 to agree to ISDS provisions in new treaties. Subsequent governments have agreed to ISDS in some treaties, and did so in recently signed Australia – Hong Kong investment agreement (close to ratification), but ISDS remains highly politicised in Australia. China has also been subjected to ISDS claims recently, and so may be reassessing its gradual shift since the late 1990s towards agreeing to wider ISDS-backed protections in its overseas treaties, despite them assisting Chinese outbound investors. Singapore and other Asia-Pacific states have already agreed to the alternative “permanent investment court” proposed by the European Union in their recent treaties, substituting a two-tier court staffed by judges pre-selected only by the states themselves, rather than ad hoc arbitral tribunals. Another potential alternative to ISDS arbitration is investor-state mediation, which could become a mandatory dispute resolution step in future investment treaties (as in the recently-signed Indonesia-Australia FTA).

The significance of investigating ISDS developments, in the context of possible alternatives and broader trends in ICA, is reinforced by UN deliberations into possible ISDS reforms, underway since late 2017. This book project will integrate written and oral statements made in and around UNCITRAL by some of the delegates from the key Asia-Pacific states subject to analysis.

Five features/characteristics: the book

  • analyses the challenges and opportunities for developing ICA and ISDS in the Asia-Pacific region with the latest updates
  • assesses recent challenges for ICA: the proliferation of international commercial courts and the rise of international mediation as represented by the Singapore Convention on Mediation
  • examines the increasingly vigorous competition among regional centres to become attractive venues for international business dispute resolution, focusing on: Hong Kong, Singapore, Australia, China and Japan
  • compares recent approaches in these jurisdictions to ISDS
  • is written by leading experts for ICA and ISDS in the Asia-Pacific region

Three benefits: the book help the reader to

  • make an informed decision on which dispute resolution method – ICA, international mediation or international litigation – is the most suitable for the international business dispute s/he or clients may be involved in
  • understand recent trends in ADR practice related to business in the Asia-Pacific region, and new resources for dealing with the increasing competition among countries become the next regional dispute resolution hub
  • refresh knowledge on ISDS practice and debates in significant Asia-Pacific economies in the Asia-Pacific region, including features of their recently concluded treaties

Chapter Abstracts (and related works):

[i] Abstract: International commercial courts are proliferating, including in Asia, offering a new alternative to arbitration as the hitherto dominant mechanism for resolving cross-border disputes. When the significant trade and investment treaties being concluded by Australia are considered with respect to the Asia-Pacific, the opportunities to create an Australian international court are almost boundless. Its establishment cannot be left to the Courts themselves or for the Australian legal profession to develop. The experiences of Singapore, China Dubai, Abu Dhabi, and indeed, London demonstrate that it is vital for there to be government interest and support for such a proposal. Adding an Australian international commercial court to the mix also occurs within a wider international context. A stronger contribution can be made to the rule of law by courts working together than if they are working separately. The early 21st Century is being defined by something of a return to internationalisation and globalisation, although the form and forms that will take remain to be seen. It is for judges to help shape those forms and contribute towards global stability, harmonisation and due recognition of the law in the context of commercial enterprise. These common purposes, as well as quality of justice and the manner of its administration provided at commercial courts and arbitral tribunals, international and domestic, should be promoted and indeed marketed.

[ii] Morrison, James and Nottage, Luke R., Country Report on Australia for: International Commercial Arbitration – An Asia-Pacific Perspective (October 23, 2014). Sydney Law School Research Paper No. 14/95. Available at SSRN: https://ssrn.com/abstract=2514124

[iii] Teramura, Nobumichi and Nottage, Luke R. and Morrison, James, International Commercial Arbitration in Australia: Judicial Control over Arbitral Awards (April 10, 2019). Sydney Law School Research Paper No. 19/24. Available at SSRN: https://ssrn.com/abstract=3379494

[iv] Abstract: Some ‘bad luck’ has haunted the arbitration industry in Australia. Geographical remoteness has made the country an unfavourable venue for increasing ICA caseloads compared with its competitors in the Asia-Pacific region. Fortunately, such ‘bad luck’ has not necessarily brought about excessively negative impacts. It has helped the country generate world-class Australian arbitration experts, who are contributors and responsive to developments outside the country, which has indirectly bolstered the Australian ICA industry. Such experts have assist Australia in gradually improving the local legal environment for ICA, following international standards, especially over the last 10-15 years. However, their increasingly concerted efforts and other stakeholders have not yet turned Australia into a popular arbitration hub. The country has not overcome the ‘bad luck’ yet – people still hesitate to seat ICA in the country. Analysing the status quo for ICA in Australia, this chapter discusses recent trends and the possible next steps for its service providers to find new frontiers to develop ICA locally and regionally, without depending on chance or luck.

[v] Nottage, Luke R., Confidentiality versus Transparency in International Arbitration: Asia-Pacific Tensions and Expectations (August 29, 2019). Sydney Law School Research Paper No. #19/52, August 2019. Available at SSRN: https://ssrn.com/abstract=3444692

[vi] Abstract: Confidentiality is still widely seen as significant advantage of international commercial arbitration (ICA) over cross-border litigation, especially perhaps in Asia. This can be seen in rules of most arbitral institutions. Automatic (opt-out) confidentiality is also now found in many national laws, including statutory add-ons to the UNCITRAL Model Law and/or through case law for example in New Zealand, then Hong Kong, Singapore, Malaysia, and eventually Australia. Yet there remain variations in the timing of these developments as well as the scope and procedures associated with exceptions to confidentiality. There is also no confidentiality provided in Japan’s later adoption of the Model Law, although parties mostly choose the JCAA so opt-in to its Rules, which have somewhat expanded confidentiality obligations since 2014.

Another recent complication is growing public concern over arbitration procedures through (especially treaty-based) investor-state dispute settlement (ISDS), especially in Australia since an ultimately unsuccessful treaty claim by Philip Morris over tobacco plain packaging legislation (2011-15). Statutory amendments in 2018 reverse automatic confidentiality for Australia-seated ISDS arbitrations where the 2014 UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration. Concerns over ISDS may impede Australia enacting provisions for confidentiality of arbitration-related court proceedings, which could not be revised recently in New Zealand against the backdrop of its new government’s anti-ISDS stance.

Growing transparency around ISDS arbitration is welcome given greater public interests involved in such cases, but transparency should not be simply transposed into commercial dispute resolution through ICA as the fields are overlapping but distinct. Confidentiality in ICA has the disadvantage of exacerbating information asymmetry, making it harder for clients and advisors to assess whether particular arbitrators and lawyers provide value for money. But confidentiality allows arbitrators in particular to be more robust in proceedings and drafting rulings, thus countering the rise in ICA delays and especially costs. More transparency around ISDS, as well as initiatives like “Arbitrator Intelligence” and experiments in reforming Arbitration Rules (eg recently by the ICC), can help reduce information asymmetry for users anyway, while retaining various advantages of confidentiality particularly in ICA.

This chapter elaborates these tensions between confidentiality and transparency in ICA and ISDS, focusing on Australia and Japan in regional context. Both countries still get few ICA cases but are trying to attract more, taking somewhat different approaches to confidentiality in that field, while negotiating investment treaties that increasingly provide transparency around ISDS arbitration.

[vii] Nottage, Luke R. and Ubilava, Ana, Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry (August 6, 2018). International Arbitration Law Review, Vol. 21, Issue 4, 2018; Sydney Law School Research Paper No. 18/46. Available at SSRN: https://ssrn.com/abstract=3227401

[viii] https://japaneselaw.sydney.edu.au/2019/10/new-frontiers-in-international-arbitration-for-the-asia-pacific-region-8-confidentiality-vs-transparency-in-icarb-and-isds/

[ix] Abstract: Investment treaties, and especially ISDS provisions, became a political hot potato from around 2011 when Philip Morris brought the first-ever ISDS claim against Australia under an old bilateral investment treaty (BIT) with Hong Kong. A Labor-Greens Government declared that it would no longer agree to ISDS provisions in future treaties, but when a centre-right Coalition Government regained power from 2013 it reverted to concluding treaties containing ISDS clauses on a case-by-case assessment. Australia therefore agreed to ISDS in FTAs with Korea and China, but not bilaterally with Japan. However ISDS-backed provisions apply between Australia and Japan since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) can into force between them (and five other Asia-Pacific nations so far) from January 2019. Yet the Australian parliament engaged in robust debate about ratification of the CPTPP, with Labor Opposition (and Greens) parliamentarians continuing to voice concerns over ISDS provisions, despite the Philip Morris claim against Australia’s tobacco plain packaging having been rejected on jurisdictional grounds in 2015.

This chapter first elaborates on evidence presented to the Australian parliament favouring ratification of the CPTPP, including empirical findings about concerns raised such as the typical amounts awarded, arbitration costs, time-frames and transparency involved in ISDS proceedings. The chapter next compares the parliamentary committee report in 2018 that agreed that ratification should proceed, with a report in 2019 recommending Australia’s ratification of investment agreements (also including ISDS) with Hong Kong and Indonesia – but also early termination of an old Australia-Indonesia BIT. It shows how these two new agreements generally retain (originally US-style) CPTPP drafting, but add some innovative features (notably a mandatory mediation step that the host state can trigger before arbitration, in the Indonesia-Australia treaty), and show some variance between themselves (including more transparency for ISDS proceedings, in the Hong Kong – Australia treaty). The Labor Opposition parliamentarians have also toned down their declared opposition to ISDS, perhaps due to suffering an unexpected election loss in May 2019. Finally, chapter looks at the parliamentary inquiry into Australia ratifying the Mauritius (“UN ISDS”) Convention, retrofitting extensive transparency provisions on earlier treaties between Australia and other states that might also accede to that framework Convention. We conclude from these new developments that Australia is now better placed to play a more active role in guiding the future path of international investment treaty-making especially in the Asia-Pacific region.

[x] Ali, Shahla F., ICA and ISDS Developments in Hong Kong in the Context of China’s Belt and Road Initiative (September 13, 2019). Available at SSRN: https://ssrn.com/abstract=3453061

[xi] Abstract: This chapter examines the impact of both the Belt and Road Initiative and the UNCITRAL Model Law on International Arbitration (the Model Law) on both international commercial and investor state arbitration practice in Hong Kong. Given the significance of Hong Kong as a gateway to OBOR project financing and logistics, understanding current dispute resolution policy is critical for gaining insights into China’s approach to the resolution of OBOR disputes. Measures taken to modernize the practice of arbitration including training programmes and legislative reforms are examined with a view to gaining insights into challenges and future developments.

[xii] Gu, Weixia, China’s Belt and Road Development and a New International Commercial Arbitration Initiative in Asia (2018). Vanderbilt Journal of Transnational Law, Vol. 51, No. 5, 2018; University of Hong Kong Faculty of Law Research Paper No. 2019/012. Available at SSRN: https://ssrn.com/abstract=3346924

[xiii] Abstract: The policy centerpiece of President Xi Jinping’s foreign strategy, China’s Belt and Road Initiative (BRI), ambitiously aspires towards expanding regional markets and facilitating regional cooperation. In context of a rising volume of cross-border transactions generated by the BRI, a robust legal framework on dispute resolution is required to forge investor confidence and enable BRI’s integral goal of economic integration. In light of the substantial levels of harmonization among arbitration laws, arbitration is argued to constitute a primary vehicle of international commercial dispute resolution in an economically integrated Asia under the BRI. It is against this backdrop that the chapter argues that the BRI provides a unique opportunity to contemplate the possibility of regional harmonization, as within the Asian economies along the BRI, of the public policy exception to arbitral enforcement. Such an arbitration initiative in Asia, in which China is anticipated to take a proactive role, holds a wealth of potential to project renewed momentum on China as an engine of not only economic power, but also soft power transformation in pioneering international legal norms.

[xiv] Abstract: This chapter will outline the latest developments in the People’s Republic of China as it promotes itself as a regional hub for international dispute resolution, especially in the context of the Belt and Road Initiative, including the establishing of an International Commercial Court.

[xv] Abstract: This chapter reviews Malaysia’s involvement in international dispute resolution. This includes actual involvement in cases in the WTO and investor-state dispute settlement, and as a venue for international dispute resolution especially through the recently rebranded Asian International Arbitration Centre (AIAC). This chapter also extends to Malaysia’s potential involvement in dispute resolution of international business disputes. This part includes the challenges of enforcing foreign judgments in Malaysia and enforcing domestic judgments abroad, as well as questions around international dispute resolution clauses in Malaysia’s trade agreements. This chapter therefore highlights how Malaysia has been involved in international dispute resolution and the continuing significance of this for Malaysia, against the backdrop of significant domestic political changes in recent years.

[xvi] Claxton, James M. and Nottage, Luke R. and Teramura, Nobumichi, Developing Japan as a Regional Hub for International Dispute Resolution: Dream Come True or Daydream? (December 11, 2018). Journal of Japanese Law, Issue 47, 2019 (Forthcoming); Sydney Law School Research Paper No. 19/01. Available at SSRN: https://ssrn.com/abstract=3299097

[xvii] Abstract: The Japanese government, supported by various stakeholders, has recently been attempting to develop Japan as another regional hub for international business dispute resolution services. Tracking this development is important for both theoretical and practical reasons. How it unfolds should reveal which of various theories for explaining Japanese law-related behaviour have more traction nowadays. Assessing the new initiatives is also important for legal practitioners and others interested in the practical question of where to arbitrate or mediate cross-border business disputes. This chapter therefore reports on current attempts to promote existing and new international arbitration centres in Japan as well as the recent establishment of the Japan International Mediation – Kyoto, in the context of intensifying competition from other regional venues for dispute resolution services.

[xviii] Claxton, James M. and Nottage, Luke R. and Williams, Brett G., Mediating Japan-Korea Trade and Investment Tensions (December 3, 2019). Sydney Law School Research Paper No. 19/73. Available at SSRN: https://ssrn.com/abstract=3497299 (shorter version forthcoming in Journal of World Trade, August 2021)

[xix] Abstract: This chapter first describes the trade tensions between Korea and Japan that escalated from mid-2019. It assesses Korea’s prospects in a formal claim now brought before the World Trade Organization, noting difficulties with substantive law, but especially procedure given the general breakdown in the WTO’s usual two-tier inter-state dispute resolution process. The chapter then outlines the possibility of Japan bringing claims under a 1965 Treaty that purported to settle claims resulting from Japan’s colonisation of Korea, or under two investment treaties, regarding Korean courts recently ordering Japanese companies to pay compensation to war-time Korean labourers. Yet such claims also face procedural and/or substantive law difficulties. The chapter also elaborates the possibility of affected Japanese companies instead or in parallel bringing investor-state dispute settlement claims against Korea, similarly alleging denial of justice in Korean court proceedings, under the two treaties. We conclude that these extra complications bolster the attraction of a formal mediation to bring both countries and the affected companies together in order to achieve an overall negotiated settlement.

[xx] Abstract: This chapter provides a perspective on investment treaty practice from India, which lies at the periphery of what is traditionally associated with the Asia Pacific region. While seemingly on the periphery of this collection of countries, India has signed investment and trade treaties with many of them. It has also recently become involved in disputes under them, and so has started to terminate many bilateral investment treaties. Indians now seeks to renegotiate fresh treaties using a template provided by a new model treaty that is oriented towards privileging state rights. The chapter will look at the narrative led to this point, touching on key cases as well as drawing on some path-breaking (econometric) empirical evidence of the impact of India’s investment treaties on foreign investment. This discussion is aimed to lead to assessing the implications of this emerging configuration for the future of investment law and practice in the wider region.

[xxi] Huang, Jie Jeanne and Hu, Jiaxiang, Can Free Trade Agreements Enhance MARPOL 73/78 Compliance? (October 3, 2018). Tulane Maritime Law Journal, Vol. 43. 2018, pp. 59-91; Sydney Law School Research Paper No. 18/62. Available at SSRN: https://ssrn.com/abstract=3259734

[xxii] Abstract: Whether Free Trade Agreements can effectively encourage states to comply with the International Convention for the Prevention of Pollution from Ships and its Protocols. This question has not been well researched, although the latter has been incorporated into the former since the 2006 US-Peru FTA and most recently in the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This chapter explores the CPTPP’s achievements and deficiencies to enhance marine environment protection from four aspects: flags of convenience, the vague role of coastal states, affecting trade or investment, and dispute resolution. It adds proposals to address the deficiencies. It concludes by assessing the broader potential for using FTA dispute resolution processes to assist in ensuring compliance with inter-linked treaties, especially for the Asia-Pacific region.

[xxiii] Strong, S.I., The Role of Empirical Research and Dispute System Design in Proposing and Developing International Treaties: A Case Study of the Singapore Convention on Mediation (February 11, 2019). 20 Cardozo Journal of Conflict Resolution __ (anticipated 2019). Available at SSRN: https://ssrn.com/abstract=3332503

[xxiv] Abstract: This chapter seeks to provide insights into the “black box” of early treaty-making processes by undertaking a case study of the development of the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention on Mediation). The discussion focuses on several issues that have seldom been discussed in the legal literature, including the way in which a proposal for an international treaty makes its way to the relevant decision-makers and how those decision-makers determine which of the various alternatives to pursue. In so doing, the article focuses particularly on the role that dispute system design (DSD) and empirical research played in the early development of the Singapore Convention on Mediation. The analysis also considers how interested individuals can assist the treaty-proposing process, particularly if they are not NGO members. The chapter concludes with implications for international dispute resolution policy development and treaty-making, including for the Asia-Pacific region.

Guest Blog: Adj Prof Robertson @ ‘Contract Law in Japan’ Launch

[Ed: These are remarks kindly added by Sydney Law School Adj Prof Donald Robertson (and former HSF partner), after those from Chief Justice Bathurst, at the 27 November 2019 CAPLUS seminar and launch of two Asian Law books hosted by Herbert Smith Freehills, focusing on: Hiroo Sono, Luke Nottage, Kenji Saigusa and Andrew Pardieck, Contract Law in Japan (Wolters Kluwer 2019)]

Introductions

  • It is my pleasure this evening to assist in the launch of this fine book, Contract Law in Japan.
  • To do so, and hopefully to stimulate some questions and debate, I want in the short time available to me to raise 2 issues:
    1. Why do we study foreign law at all? After all, as some say – ‘we do not cite foreign laws – we have our own laws’. I will give 2 reasons why that attitude is wrong.
    1. What can we learn from a study of foreign law? I will give 2 examples of areas which require some further study, from a comparative perspective.
  • The book we launch today provides a helpful summary of the background and sources of Japanese contract law, the first English-language commentary on the Japanese Civil Code of 2017 coming into force on the inauspicious date of 1 April 2020. The introductory chapter teaches us much about the background which is relevant to the examples I raise.

The background to Japanese Contract Law

  • There has been a strong influence on Japanese law of Chinese, German and American law, and more recently European Union law. (1-3, 5)[1] Codifications have been central in the development of Japanese law and hence legislation is a primary source of law.  (7)
  • Japanese law is more open to ‘substantive reasoning’ compared to Anglo-Australian common law. Like US law, it is open to moral, economic, and political reasoning. (6)                                                                                                                     
  • The 2017 reforms are intended to make the Civil Code more ‘modern’ and ‘transparent’ and to align contract law with that of ‘influential jurisdictions’ and international instruments like the UN Convention on International Sales of Goods (CISG) and the UNIDROIT Principles of International Commercial Contracts (UNIDROIT Principles). (4)
  • Japanese contract law has some particular characteristics worth noting:
    • There is an emphasis on continuity in long-term or relational contracting. (8)
    • There is no doctrine of stare decisis. There is a large and growing influence of case law due to the career judiciary system and a shared vision of the rule of law that emphasises uniformity and predictability of outcomes. (8-12)
    • There is no strong distinction between public and private contracts. (13-16)
    • There is a role for secondary ordering of outcomes based on Japanese analogues to equity or reasonableness. (28-33)

Why study foreign law

  • Given these differences in the way that contract law is perceived in practice, why should Australian lawyers or judges care about Japanese law – or any foreign law at all?

First reason

  • The first reason, of course, is that Japan is an important trading partner of Australia. Japan is our second largest destination for exports of manufactured goods, and ninth largest in services. It is our third largest importer of goods and fifth largest in services.
  • We have deep and important bilateral and multilateral trade relationships, importantly:
    • The 2015 Japan Economic Partnership Agreement.
    • Both Japan and Australia played a critical role in implementing the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP).
    • The agreed but not yet signed Regional Comprehensive Economic Partnership (RCEP).
  • The mega-regional agreements are hugely significant. The CPTPP covers 14.4% of world trade and has a market size of $10.6 trillion. There is a standing invitation for the US to return to the original TPP. RCEP is more than twice that size, with a market of $27.3 trillion. And it includes China! They will transform our place in the global economic community.

Second reason

  • The mega-regional agreements (CPTPP and RCEP) highlight the second reason why we should be interested in the legal system of Japan and other regional powers. We live in a globalised economy, but one where the form of globalisation takes a radical new form.
  • The previous forces of globalisation (largely, a reduction in transport costs) lead to increased bilateral trade. The new forces (modern information and communications technology) lead to a new paradigm of competition and trade in which it is possible to perform economic functions at long-range:
    • The old paradigm of global competition was trade in goods made in factories in different nations. The new paradigm of global competition is trade in tasks, with competition occurring between workers performing the same task in different countries.
    • Economists[DR1]  call this ‘vertical disintegration’ leading to global value chains (GVCs)[2] in which production occurs in many production stages in different countries.
    • The pattern of trade shows that production occurs in clusters[3]. The Asia-Pacific region is one of those clusters – hence the economic logic of the CPTPP and RCEP. They are not so much free trade agreements as a constitution for the governance of transnational markets, covering topics such as: e-commerce, IP, State-Owned Enterprises, competition rules, and investment protections allowing international arbitration.
  • All of this means economies (and legal issues) are inextricably linked and intertwined:
    • Foreign laws and international law are inherently interesting in every economic transaction that has a transnational characteristic. We need to understand the legal regimes (contract laws and regulations generally) of our trading and production partners, for their regime (often multiple regimes) will often apply directly and, if not, indirectly.
    • The distinction between private and public international law breaks down – international law is part of modern commercial practice. Private international law (conflict of laws) is a central topic in modern commercial practice. The issue of the coherence of laws and regulations also becomes central. Hence the mega-regional agreements have chapters on regulatory best practice.
    • This is also why we have seen the new generation of international instruments – adding to the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. This new generation of documents (treaties and statements of principles of law) encourages a global mindset and will transform the international disputes landscape:
      • Convention of 30 June 2005 on Choice of Court Agreements;
      • 2015 Principles on Choice of Law in International Commercial Contracts, allowing, subject to conditions, the use of ‘rules of law’ (soft law) as a valid choice of law;
      • 2018 UN Convention on International Settlement Agreements; and most recently,
      • Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters
  • Within this changing economic and legal environment, a number of concepts compete for attention:
    • Codification (even in Australia – 2012, but still-born);
    • Harmonisation;
    • Restatements (the US Restatement, Second, Contracts; Burrows; Andrews);
    • Statements of general principles of law for international commercial contracts (UNIDROIT Principles, Trans-Lex).
  • Of course, private international law – now reinforced by the 2015 Hague Principles on Choice of Law in International Commercial Contracts – keeps whispering: ‘You are autonomous. Choose your own law. Think about rules of law as a valid alternative’.
  • The Japanese Civil Code has continued in its tradition of codification, even though that course may (in my view) actually undermine the ability of law to respond to modern complex, transnational issues. The uncertainty and obscurity of sources of law is overstated. But law reform may still be needed. I will mention 2 areas where we could think of more deeply about law reform.

Two areas that could benefit from reform

First area – Good Faith

  • There is a long-standing (and somewhat sterile) discussion of the role of good faith. Even the English courts are introducing the concepts in a more nuanced way, especially in long-term, relational contracts[4].
  • We know that good faith pervades all of contract law rules. If the debate about implied terms of good faith was sterile, it was because of a failure to see what ‘contract’ is. Contracts are not just pieces of paper and an agreement about terms. ‘Contract’ is an institution. Wim Decock[5], reminds us that the foundational principles of contract law were about maintaining relationships. Contract law was Trinitarian in nature and good faith was about maintaining a relationship with God and with each other (a vertical and horizontal dimension).
  • It is interesting to see, therefore, the observation in this book (6) that Japanese law puts greater emphasis on maintaining contractual relationships (62-65), in line with more long-term or relational contracting in business practice, and that therefore good faith plays a major role in Japanese law, more like German law. (64)
  • It would be helpful to Australian contract law to perceive contract as an institution and articulate rules about good faith for the support and protection of that institution, particularly as it weathers the greater volatility that we see in global commercial practice.

Second area – Change of Circumstances

  • The doctrine of frustration is notoriously unsatisfactory in Anglo-Australian common law. It is far from an obsolete doctrine but deals with the problems of the everchanging transnational commercial world. Brexit (or not) is just one of the current issues giving rise to the question of what should happen when circumstances radically change.[6]
  • Putting to one side the issue of what exactly is a sufficiently radical event to call frustration into play, the seriously deficient Anglo-Australian response (termination as a matter of law without recourse to either party) seems hardly satisfactory in a modern commercial contracting environment of Global Value Chains and relational contracts.
  • The judgments in the High Court in Codelfa Construction Pty Ltd v State Rail Authority of NSW [7] give hints of a broader approach. Both in this and the leading English case of Davis Contractors Ltd v Fareham UDC[8], the parties proceeded with the work and claimed a restitutionary remedy for the different work done after the frustrating ‘event’. As Jane Swanton has noted[9], the continued performance and restitutionary remedy was in effect a variation of the contract. This was appropriate given the subject matter of the contract in Codelfa was with a government entity concerning important public infrastructure.
  • The UNIDROIT Principles (see Art 6.2 Hardship and Art 7.1.7 Force Majeure) and before them the Contract Code drafted by Harvey McGregor for the English Law Commission[10], suggests another, more direct, way of achieving a just result: a legal requirement (or, at least, a precondition of relief) to negotiate in good faith to restore the ‘equilibrium’ of the contract, failing which there is a possibility of a tribunal intervening to itself adapt the contract to the new circumstances.
  • Japanese law, like German law, recognises a right of adjustment. (426-431) Although drawing back from a full adoption of the UNIDROIT Principles in the 2017 Civil Code, the issues surrounding changed circumstances are informed by the greater predilection of Japanese courts to keep the contract alive. A generalised duty to renegotiate in good faith is still being debated. (431)
  • Australian lawyers would do well to participate in this debate, given the importance in modern commercial practice of long-term, relational contracts. It would help inform an Australian attitude to radical changes of circumstances, which changes are more and more likely in a volatile global economy.

Concluding remarks

  • In the context of where it fits in a world community, there is a long and sometimes acrimonious debate in the United States (and sometimes Australia too – although we are much more used to citing foreign case law[11]) as to the permissibility of citing and relying on foreign law[12].
  • A study of this work shows that much can be learnt about the suitability of our own legal system by studying foreign laws and applying the comparative method. The articulation of laws and their reform is part of the art of statecraft, as Justinian describes in his opening paragraphs to his monumental Digest[13]. More attention should be paid to this important public task.
  • Books like the one we launch today are valuable guides along the way. I commend it to your reading.

Donald Robertson
Adjunct Professor of Law, University of Sydney


[1]             References are to paragraph, not page, numbers.

[2]             Paul R Krugman, Maurice Obstfeld and Marc J Melitz, International Economics: Theory and Policy (Pearson, Harlow, 11th ed, 2018), 46; Pol Antràs, Global Production: Firms, Contracts, and Trade Structure (Princeton University Press, Princeton, 2016).

[3]             Richard Baldwin, The Great Convergence: Information Technology and the New Globalization (Harvard University Press, Cambridge, Mass., 2016).

[4]             Sir George Leggatt, ‘Negotiation in Good Faith: Adapting to Changing Circumstances in Contracts and English Contract Law’ [2019] Journal of Business Law 104.

[5]             Theologians and Contract Law: The Moral Transformation of the Ius Commune (ca 1500-1650 (Martinus Nijhoff, Leiden, 2013), 608.

[6]             Canary Wharf (Bp4) T1 Ltd. v European Medicines Agency [2019] EWHC 335 (Ch).

[7]             (1982) 149 CLR 337.

[8]             [1956] AC 696.

[9]             ‘Discharge of Contract by Frustration: Codelfa Construction Pty Ltd v State Rail Authority of NSW’ 57 Australian Law Journal 201 at 213, 217.

[10]           §595, Contract Code: Drawn Up on Behalf of the English Law Commission (1966, – the first project of the then new English Law Commission, but published only in 1993 by an Italian publishing house).

[11]           Jeremy Waldron, “Partly Laws Common to All Mankind”: Foreign Law in American Courts (Yale University Press, New Haven, 2012).

[12]           Stephen Breyer, The Court and the World: American Law and the New Global Realities (Knopf, NY, 2015).

[13]           Digest of Justinian, 533 AD (English translation edited by A Watson, University of Pennsylvania Press, Philadelphia, 1985), p xlvii.