Japan’s (In)Capacity in International Commercial Arbitration

Written by: Nobumichi Teramura (UNSW PhD candidate) & Luke Nottage (USydney)
[These are the non-footnoted/hyperlinked opening paragraphs of a posting forthcoming on the Kluwer Arbitration Blog, which follows on from our analysis of ‘Australia’s (In)Capacity‘ published on 21 September 2018. The full draft of this posting about Japan will be uploaded after it appears on the Kluwer Arbitration Blog.]
Not long after the ICCA Congress held in Sydney, the Japan International Dispute Resolution Center (JIDRC) was established in Osaka on 1 May 2018, with some fanfare from the Japanese government and local legal circles. ‘JIDRC-Osaka’ does not provide arbitration services but offers specialist facilities for international arbitration hearings and other forms of Alternative Dispute Resolution (ADR). Facilities are reasonably priced as they are housed quite centrally in a modern Ministry of Justice building. Further, on 1 September, the International Arbitration Center in Tokyo (IACT) started operation as the first Asian international arbitration body specialised in intellectual property disputes. Unusually for international arbitration institutions, the IACT’s website highlights a range of former judges agreeable to serving as presiding arbitrators, including Dr Annabelle Bennett SC from Australia.
While these new initiatives are based on the ‘Basic Policy on Economic and Fiscal Management and Reform 2017’ approved by the Cabinet of Japan, it is unclear whether the government will issue something equivalent to the glossy Austrade brochure to try to promote instead Japanese international commercial arbitration (ICA). But the Justice, Sports, Trade and Transportation ministries are reportedly discussing how they should promote Japanese ICA to the world in English. This blog posting already sketches convincing and unconvincing aspects involved in developing Japan as another regional arbitration hub, keeping in mind the points in the Austrade brochure and our previous blog posting regarding Australia.

The full draft of this posting about Japan will be uploaded after it appears on the Kluwer Arbitration Blog, by November.
Meanwhile, here is our earlier full paper examining developments in Japan:
Teramura, Nobumichi and Nottage, Luke R., Arbitration Reform in Japan: Reluctant Legislature and Institutional Challenges (September 20, 2018). Anselmo Reyes and Weixia Gu (eds), ‘The Developing World of Arbitration’ (Hart Publishing, 2018) 83-108.; Sydney Law School Research Paper No. 18/59. Available at SSRN: https://ssrn.com/abstract=3252270
Reforms to the arbitration legal framework in Japan have been managed in various ways by legislative, judicial and arbitration institutions. The principal purpose of these reforms has been to make ‘Japanese’ arbitration more appealing and accessible to the international market, while a secondary aim has been to promote arbitration and alternative dispute resolution (ADR) for Japanese companies. This chapter analyses what these reforms have achieved.
It summarises the current framework of arbitration in Japan, then the recent reforms to Japanese arbitration law and practice. Key features are that law reform for arbitration is basically initiated by academics, the business sector plays a limited and quite diffuse role, and legal practitioners are still not very active either. The chapter proposes further reforms in specific areas of arbitration law and practice in both international and domestic contexts. This manuscript also briefly cites online summaries, by one or both of us, regarding some new Japanese developments in 2018.

Author: Luke Nottage

Prof Luke Nottage (BCA, LLB, PhD VUW, LLM LLD Kyoto) is founding co-director of the Australian Network for Japanese Law (ANJeL), Associate Director (Japan) of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), and Professor of Comparative and Transnational Business Law at Sydney Law School. He specialises in international dispute resolution, foreign investment law, contract and consumer (product safety) law.