Japan’s International Investment, Evolving Treaty Practice and Arbitration Related to Corruption and Illegality

Written by: Luke Nottage and Nobumichi Teramura#

Abstract: This article forthcoming in 55 Journal of Japanese Law (mid-2023), part of an interdisciplinary book project on Corruption, Illegality and Asian Investment Arbitration [including a conference held in Brunei on 29 May 2023 (booklet here) supported by ANJeL and CAPLUS], addresses for Japan the difficult practical and policy question facing arbitration tribunals when a foreign investor claims mistreatment by a host state but the latter alleges that the investment was tainted by corruption or other similar serious illegality. By way of background, Japan emerged from the 1980s as a leading exporter of foreign direct investment (FDI). Yet it has low inbound FDI despite some significant growth since the late 1990s (Part II). This is despite Japan having comparatively very little corruption, which is often problematic for foreign investors (Part III).

To protect and promote outbound FDI after a hesitant start, over the last two decades, Japan has accelerated ratifications of standalone bilateral investment treaties (BITs) as well as investment chapters in free trade agreements (FTAs). Almost all allow foreign investors from the home state to directly initiate investor-state dispute settlement (ISDS) arbitration against host states to get relief from violations of substantive treaty commitments, such as non-discrimination or compensation for expropriation (Part IV.1).

Japan’s investment treaty practice on corruption and illegality is comparatively interesting for two reasons (Part IV.2). First, from around 2007, its treaties have often required host states to take measures against corruption. This should help Japan’s outbound investors, but these obligations are generally weakly phrased. Secondly, Japan’s treaties have been less consistent in expressly limiting their protections to foreign investments made in accordance with host state laws (including against corruption). This may be due to treaty drafters from Japan and counterparty states being less aware of the significance of such express legality provisions, which will often lead tribunals to decline jurisdiction if corruption is established, thus leaving foreign investors without treaty protections. Such outcomes may also incentivise host states to ensure a bribe is taken, to use as a treaty defence if foreign investors ever launch treaty claims, whereas other outcomes for tribunals are possible if there is no express legality provision. Another possibility is that this drafting is deliberate, again to benefit Japanese outbound investors as claimants because the absence of a legality provision renders more difficult defences from host states, which typically have more corruption than in Japan.

Japan may adopt more and clearer legality provisions if it becomes subject to more inbound ISDS arbitration claims, and/or if claims by Japanese outbound investors are mostly against well-governed host states with little scope for corruption. Yet both types of claims remain few (Part V). The shift may therefore come more from other counterparty states pushing for such legality provisions and Japan agreeing in its future treaties to demonstrate its overall commitment to combatting corruption, and to preserve the legitimacy of the ISDS arbitration system (Part VI).


# Respectively: Professor, University of Sydney Law School; Assistant Professor, Institute of Asian Studies, Universiti Brunei Darussalam.

Consumer Protection Administration, Product Safety Regulation and Contracts in Japan: Contemporary Comparisons with Australia and Beyond

Written by: Souichirou Kozuka and Luke Nottage (c) 2023

[On 19 January 2023 I interviewed Gakushuin University Professor Souchirou Kozuka about consumer law and policy developments in Japan (here on Youtube). He has been appointed to the Consumer Safety Investigation Commission within Japan’s Consumer Affairs Agency, and has co-authored papers with me on consumer credit regulation, Civil Code reform and corporate governance as well as sole-authoring several articles on consumer law in the Journal of Japanese Law, and serves as an ANJeL-in-Japan program convenor. We have summarised and expanded somewhat our conversation as below, aiming to develop a joint paper for a law journal (now in draft on SSRN).]

  1. Consumer Administration
    • Since 2009: Consumer Commission (independent members) supervising Consumer Affairs Agency (law reform plus enforcement)
      • Cf Productivity Commission (occasionally requested by federal Treasurer, eg 2008 Inquiry Report recommending harmonisation through ACL from 2010; 2017 Inquiry Report into consumer admin and enforcement, parallel to first five-yearly review into other ACL operations), but mostly Ministers (federal Assistant Treasurer with Treasury officials and state/territory consumer affairs ministers) deciding policy and law reform) ostensibly separated from law enforcement (federal ACCC, plus state/territory consumer affairs regulators) …[1] but latter sometime develop reform proposals for ministers and staff sometimes seconded eg from ACCC to Treasury
      CCA subsumed enforcement of Unjustified Premiums and Misreps Act from JFTC competition regulator, but not enforcement of Anti-Monopoly Law unfair trade practices “abuse of superior market provision”
      • Latter has some similarities with ACL prohibition on unconscionable conduct, former with misleading conduct (and other specific unfair trade practices) prohibitions, all enforced instead by combined ACCC (combining competition and consumer law enforcement from its established in 1970s as Trade Practices Commission – inspired by US law) and state/territory consumer regulatorsPerhaps because JFTC older (Allied Occupation), wouldn’t want to merge with newer, less-resourced CCA?
      CCA and other govt departments: Shares with METI jurisdiction over law reform for Designated Commercial Transactions Act (door-stop selling, distance selling etc: cooling off rights etc), and [see 2. Below] METI retains primary jurisdiction to set mandatory safety standards for types of (industrial) consumer products – like MHW does for foods and medical devices/services, and Transport Ministry does for cars etc
      • Cf Australian consumer affairs ministers/regulators have sole jurisdiction over such unfair trade practices, and minimum safety standards as well as bans/recalls for foods etc although have MoU with sectoral regulators and usually defer to them (but eg no power until recently to order recalls of cars – amended after Takata airbag recall problem[2])Shared or primary jurisdiction for other ministries because they are even older, more resourced (and losing jurisdiction means losing budget!)? Similar to problems with newer regulators in most (SE)Asian countries?[3]
      CCA and other stakeholders: CCA cannot seek injunctions eg to stop misrepresentations or use of unfair terms by suppliers under the Consumer Contracts Act 2000, or bring representative actions (under Brazil inspired two-stage law 2013, amended 2022), instead those via govt certified consumer NGOs (German approach, Singapore too through CASE until injunction power shifted to competition regulator now with consumer protection aspects so renamed SCCC from 2018)
      • Cf ACCC and state/territory regulators have full jurisdiction / powers for injunctions, opt-in representative actions (where individual consumers consent to regulator lawsuit) for damages – but rare, etc. But they (or consumer NGOs) don’t bring opt-out US-style class actions – instead individual/representative plaintiffs, and active law firms including (since 2006) third party litigation funders.
    CCA separate from consumer financial services regulators

Also in Australia, but eg ACCC and federal ASIC (no state laws/regulators for securites/corp law, consumer credit under shared national scheme) exchange some personnel, have some similar substantive laws (eg against unconscionable conduct and unfair terms) and if one gets greater powers/sanctions then the other usually soon asks for them too!

2. Product Safety Regulation

  • CPSA 1973 set limited pre-market controls (eg METI sets mandatory safety standards for manufactured products), but more expansive post-market controls (bans and – albeit like Australia rare – mandatory recalls) that can allow CCA to “encourage” line ministries to set mandatory safety standards.
    • ACCC and (temporarily) state/territory regulators can both ban and advise Minister to set mandatory safety performance or information/warning standards (hence covering more types of products than Japan? Although latter also encourages a voluntary product liability insurance scheme), including eg foods (konjac jelly stacks must not be smaller than 45mm in diameter, to reduce choking risks – no bans or standards set in Japan![4])Australia initiated a consultation on adding an EU-style General Safety Provision (as in EU, then Malaysia, HK, Macau and 2010 Canada, partially Singapore from 2011, and Thailand in 2019) but no progress; no discussion in Japan perhaps because CAA doesn’t even have yet powers to set mandatory safety standards for specific types of consumer goods?[5]
    CPSA amendment in 2006 (inspired by EU) requiring suppliers to report deaths or serious (hospitalised) injuries, as well as some risks (by Regulation: carbon monoxide emissions eg from gas fan heaters, and fires), to regulators; 2007 amendment also required notices to consumers to get some appliances (heaters) checked periodically
    • ACL introduced mandatory accident (but not risks) reporting in ACL 2010, but reports kept confidential to ACCC (and State/territory regulators)[6]
Consumer Safety Act 2009: channel accident reports (to local/central govt consumer centres, other depts, etc) to CAA, recalls etc if products found unsafe and not subject to other department laws (eg konjac jelly snacks!) but not to set mandatory safety standards (instead can eg urge other ministries to seek law changes to expand their jurisdiction and set standards). Also established Consumer Safety Investigation Commission under CAA, to (a) investigate causes of product-related injuries, (b) recommend actions (eg law reforms) but not liability (so like Japan Transport Safety Board)

Similarities of latter Commission with (ad hoc and semi-judicial) coronial inquiries in Australia (eg into Takata airbag deaths, op cit) or even (Royal) Commissions of Inquiry (under parliamentary supervision, so larger-scale problems)?

3. Consumer Contracts

Consumer Contracts Act 2000 inspired by EU: (a) pre-contract rules allowing broader termination rights than under the Civil Code (cf what became the 2005 EU Unfair Commercial Practices Directive – NB includes black list of worse practices), (b) regulations voiding unfair terms – some exclusion clauses, otherwise one-sided contrary to good faith principle (cf 1993 EU Unfair Terms Directive, but that has grey list of possibly unfair terms, unlike 2000 Act). Interestingly, several amendments re (a) specifying quite detailed types of transactions of concern (eg salespeople trying to use romantic infatuations or scaremongering about religion to secure contracts), but not re (b) where statute remains broad. Former maybe because higher profile and obvious or bigger problems (infecting entire contracts), making it easier for consumers / groups / CAA to mobilise, while (especially majority good) businesses prefer clarity.

  • Former NSW CJ Bathurst extra-judicially also noted that having some such guidance re (a) from legislators may also make it easier for courts to intervene to set aside contracts.[7]
    • But instead quite a push to add a new ACL prohibition on unfair practices generally (potentially wider than unconscionable or misleading conduct prohibitions)! Triggered partly by growth of e-commerce and use of “dark patterns” etc digitally[8]
Australian legislators (starting initially with Digital Services inquiries by PC etc) have enacted in 2022 comparatively unique powers of regulators to issue infringement notices and (larger) civil penalties if they think terms are unfair (and extended further 2016 amendment making terms unfair in many B2B transactions) and are consulting now about doing the same for mandatory performance standards in consumer contracts (also applicable to many B2B transactions, perhaps for political reasons), as relying on consumers enforcing ACL rights seems to have been insufficient.
  • Also likely to enact a super-complaints mechanism allowing certified consumer groups to get nominated regulators (eg ACCC, maybe also ASIC) to respond to evidence of serious / emerging consumer problems.[9]
    • Unlikely in Japan as consumer groups mostly smaller / less resources and regulators (even CAA) stronger even than in Australia in maintaining discretion, including over budget / resourcing?

ACCC latest report on digital platforms recommends they be required to have an external Ombudsman scheme free to consumers but with determinations only binding on the seller and platform[10] (like Banking and financial services or telecoms schemes, cf weaker scheme introduced more recently in Japan) which could also improve internal DR between users and the platforms

Unlikely in Japan but it has meanwhile new laws regulating some aspects of relationship between platforms and retailers, and requiring big platforms to take down products considered unsafe (inspired by laws on liability of platforms for defamation etc, and maybe new EU laws)


[1] https://consumer.gov.au/australian-consumer-law/consumer-policy-australia

[2] https://japaneselaw.sydney.edu.au/2022/05/the-interface-of-inquests-and-consumer-law-and-policy/

[3] Nottage, Luke R., ASEAN Consumer Product Safety Law: Fragmented Regulation and Emergent Product Liability Regimes in Southeast Asia (March 10, 2020). “ASEAN Consumer Law Harmonisation and Cooperation: Achievements and Challenges”, Cambridge University Press (2019), Sydney Law School Research Paper No. 20/13, Available at SSRN: https://ssrn.com/abstract=3551793

[4] Kawawa, Noriko, Jelly Mini-Cups Containing Konjac: Is a Warning Enough to Protect Vulnerable Consumers? (March 4, 2013). Australian Journal of Asian Law, 2013, Vol 13 No 2, Article 2: 135-152, Available at SSRN: https://ssrn.com/abstract=2228461

[5] Nottage, Luke R., Improving the Effectiveness of the Consumer Product Safety System: Australian Law Reform in Asia-Pacific Context (February 3, 2020). Journal of Consumer Policy (2020) 43:829-850, Sydney Law School Research Paper No. 20/05, Available at SSRN: https://ssrn.com/abstract=3530671

[6] Nottage, Luke R., Suppliers’ Duties to Report Product-Related Accidents under the New ‘Australian Consumer Law’: A Comparative Critique (May 4, 2010). Commercial Law Quarterly, Vol. 25, No. 2, pp. 3-14, 2011, Sydney Law School Research Paper No. 10/41, Available at SSRN: https://ssrn.com/abstract=1600502

[7] https://japaneselaw.sydney.edu.au/2019/11/guest-blog-launch-by-bathurst-cj-of-asian-law-books/

[8] See https://www.accc.gov.au/publications/serial-publications/digital-platform-services-inquiry-2020-2025/digital-platform-services-inquiry-september-2022-interim-report-regulatory-reform

[9] https://medium.com/@PhilipCullum/up-up-and-away-what-australia-can-learn-from-two-decades-of-uk-super-complaints-848e4469a748

[10] Ibid at https://www.accc.gov.au/publications/serial-publications/digital-platform-services-inquiry-2020-2025/digital-platform-services-inquiry-september-2022-interim-report-regulatory-reform

“Corporate Environmental Responsibility in Investor-State Dispute Settlement” by Tomoko Ishikawa

[This is my draft review – for the Manchester Journal of International Economic Law – of an excellent new book (Cambridge University Press, 2023, ISBN 978-1-316-51397-2) by one of Japan’s leading international investment law and dispute resolution scholars, Professor Tomoko Ishikawa of Nagoya University’s Graduate School of International Development. She was previously Associate Professor at Tsukuba University and Assistant Professor at Waseda University. Unusually for a Japanese academic, Prof Ishikawa also served as a judge of the Tokyo District Court (2002-5) and working on international law matters in the Ministry of Foreign Affairs (2010-12). She has been appointed to the Panel of Conciliators by the Chairman of ICSID over 2017-23. Her research intersects with my current book project with Nobumichi Teramura and Bruno Jetin on corruption and investor illegality in Asian investment arbitration.]

This thought-provoking, extensively researched and well-argued book combines two hot topics for international economic law experts as well as the general public: corporate environmental responsibility, comprising both hard law and voluntary Corporate Social Responsibility (CSR) and investor-state dispute settlement (ISDS). It is highly recommended for scholars, practitioners and policy-makers, including national delegates, observers and the Secretariat of the United Nations Commission on International Trade Law (UNCITRAL) engaged in ongoing multilateral reform deliberations on ISDS since 2019.

Chapter 1 outlines how ISDS arbitration reinforces substantive protections offered through international investment agreements (IIAs) to foreign investors typically going beyond customary international law, notably against discrimination, uncompensated indirect as well as direct expropriation, and violation of fair and equitable treatment (FET) including denial of justice in national courts and administrative procedures. Yet burgeoning IIAs and ISDS cases have highlighted how foreign investment can adversely impact the environment and often related human rights in host states. The book’s key concern is how the ISDS system, which seems “asymmetrical” in only allowing foreign investors to claim against host states, also does or can significantly allow counterclaims by host states to offer relief against environmental degradation.

Professor Tomoko Ishikawa’s well-structured book (pp17-21) devotes the first part of chapter 2 (pp 24-48) to the challenges of regulating and pursuing the responsibility of transnational corporations (TNCs) in domestic legal orders (including poor governance capacity and access to impartial justice), but also the persistent lack of effective general mechanisms internationally. Ishikawa examines the paucity of customary and treaty-based international law obligations and enforcement mechanisms, recent attempts to expand the international human rights obligations of corporations, and some “soft law” instruments to promote corporate social responsibility (including private initiatives involving CSR). The second part analyses 1000 randomly selected IIAs and Model IIAs (pp 49-55). There is a trend especially over 2010-19 to add express provisions reinforcing the host state’s general “right to regulate” (such as “no lowering of standards” or general exceptions clauses). Yet very few IIAs (39) set express investor obligations (plus six out of 56) Model IIAs), although somewhat more (54) refer to voluntary CSR in the preamble or especially main text (plus 11 Model IIAs), and both types of provisions have also emerged particularly over the last decade or so.

Chapters 3-5 delve into the procedural mechanism of counterclaims potentially under IIAs. Chapter 3 outlines the benefits compared to pursuing investor responsibility under domestic law (pp 60-65). These include problems with the rule of law (such as judicial corruption, mentioning some notable cases) and cross-border enforceability, which I would add are essentially the flipside of problems faced by foreign investors without (especially ISDS-backed) IIAs.

In addition, Ishikawa deals with a fascinating and little-discussed issue, pointing out that in some cases the actual victims of environmental harm may not benefit from the host state proceeding with a counterclaim. A primary conclusion is that ISDS arbitral tribunals should be able to rule it inadmissible based on due process concerns (as a general principle of international law) if allowing the counterclaim “would result in effective deprivation of remedy for the victims” (p84). One factor in this determination will be the host “state’s representation of the interests of its people” (p84), presumed if it has representative democracy but rebutted for example if the host state colluded with the investor in causing the damage. A second suggested factor is doubts about the distribution to victims of compensation potentially awarded. Nonetheless, Ishikawa rightly concludes that in proving such matters, the investor faces “a difficult task. After all, there is a strong presumption that the host state acts on some public purpose, and tribunals would be very reluctant to interfere with internal political affairs by second-guessing the issues of representation and fair distribution” (p85, footnotes omitted).

Chapter 4 first deals with jurisdiction or consent to counterclaims. Again, Ishikawa makes good use of her empirical dataset. She agrees with some other commentators that treaties’ (typical) “absence of reference to the host state’s right to file a counterclaim, which is already responsive to the principal claim, is a logical choice and does not necessarily indicate the parties’ intention to exclude counterclaims” (p97, footnote omitted). She argues this conclusion is buttressed because 706 IIAs out of the 1000 sample contain seemingly narrow locus standi provisions (only expressly mentioning the investor’s right to claim) but 263 go on to provide narrow definitions of investment disputes and claims (pp 98-99). Only the latter subset of treaties, Ishikawa contends, impede tribunals taking jurisdiction over counterclaims because such IIAs allow only for disputes and claims over host state obligations assumed under the treaty. She further argues that a narrow applicable law clause (not expressly referring to domestic law, but only international law: 140 IIAs and 12 Model IIAs) does not imply exclusion of domestic law in ISDS as tribunals “always possess the incidental jurisdiction to apply domestic law to questions that cannot be answered by international law” (p101).

Nonetheless, the second half of Chapter 4 investigates whether tribunals, despite taking jurisdiction under (most) treaties, should rule counterclaims as inadmissible (pp 104-115). Ishikawa argues that there need only be a factual not legal nexus between the principal claims and counterclaims. More complicated is whether a parent’s counterclaim for damage caused by its subsidiary should be inadmissible due to the principle of limited liability. Ishikawa concludes otherwise, noting for example that investment treaties often allow conversely for parent companies to bring claims on behalf of local companies they control or (more controversially nowadays) have shareholdings in. She further concludes that “the question of whether the parent company directly owes a duty of care or is shielded from liability in a particular case must be considered at the merits stage, in accordance with a careful interpretation and application of the relevant domestic law” (p115). This sub-topic, and perhaps the arguments about jurisdiction presented in this Chapter, nonetheless will likely generate some significant divergences among other commentators and tribunals.

Chapter 5 turns to assessing the merits to be considered by tribunals for counterclaims (pp. Ishikawa first elaborates quite compellingly the argument that tribunals generally can and should apply aspects of domestic law, including those imposing responsibility for environmental harm. Concerns about the legitimacy of international adjudicators applying such laws can be addressed by them adopting a “domestic jurisprudence” approach (like the Permanent Court of International Justice), considering a wide range of domestic law sources (pp 128-9) and more use of local legal experts (although very few sampled treaties provide expressly for tribunals to appoint ex curia experts, and only for factual issues: p 131).

The second half instead considers counterclaims based on international law (pp 135-56). An interesting but ambitious argument is that for some instruments imposing liability on TNCs but not expressly providing for remedies or others not yet implemented into national laws, host states might seek to fill that gap through tribunals applying domestic law (as for example in some US case law). Ishikawa also argues that violation of proliferating CSR commitments through treaties (as well as national laws, evolving corporate practices and representations) might generate civil tort claims under at least some domestic laws.

Having considered an investor’s environmental responsibility as a ground for the host state’s counterclaim, Chapter 6 discusses the effects of such responsibility in assessing the investor’s principal claims. Problems usually arise with environmental harm during the performance phase, and Ishikawa argues that misconduct at that stage will usually have only a limited impact on a tribunal’s jurisdiction and even admission of the claim (pp 159-66). However, when considering the merits, host state liability for lack of FET (especially “legitimate expectations”) can arguably be obviated by the investor’s performance-phase misconduct as part of the principle’s balancing exercise and (more controversially) the evolving notion of a corporation’s “social licence to operate” (pp 166-191). More commonly found in investment arbitration and other international law for a is the application of contributory fault to reduce relief awarded, although Ishikawa urges sufficient reasoned explanation over percentages applied by ISDS tribunals (pp 191-98).

Chapter 7 concludes with “implications for reform”. Although the book mainly argues that there is already most scope for counterclaims under many IIAs than most have appreciated, Ishikawa suggests that more explicit rights to counterclaims in treaties would be useful. Substantively, moreover, treaties should expressly provide obligations on investors to comply with host state laws, but if and when extra international standards are set they should be “clearly specified so as to constrain the interpretative discretion of tribunals” (pp 204-5) and provide secondary rules determining consequences for breach (rather than tribunals having to invoke domestic law).

By contrast, a reform option of requiring exhaustion of local remedies before ISDS claims is unclear concerning the extent this “would contribute to advancing the victims’ interests” given “the known cases suggesting corruption and a lack of political independence in the judiciary in the context of TNCs’ misconduct” (p206). Ishikawa also suggests that the most drastic reforms, allowing host states and affected third parties to initiate claims against TNCs (rather than responding with counterclaims) is better pursued outside the IIA regime (eg through the 2019 Hague Rules on Business and Human Rights Arbitration). Otherwise, the regime including its legitimate interests for investors could unwind: “ISDS reform should strike a careful balance between the need to keep its value for the regime’s participants and the need to advance responsible investment” (p208).

The most detailed reform proposal, not really prefigured in the preceding chapters, involving promoting third party participation in investor-state mediation. This more consensus driven dispute resolution procedure has been promoted in recent years by various institutions and commentators due to growing concerns about ISDS arbitration, including its costs and delays.[1] Ishikawa interestingly highlights how some UNCITRAL reform discussions have mentioned that participation by affected third parties through mediation could allow more public interest to be represented, while some scholars support including “non-disputant” stakeholders in mediation (p213). Various suggestions are made to make this process work well for cases involving alleged environmental harms, including appointing co-mediators with relevant expertise, partially lifting confidentiality and reporting and establishing best practices through capacity building and other initiatives.

However, Ishikawa shares scepticism with some other commentators about reforming IIAs by mandating mediation before arbitration – including through a multilateral instrument retrofitting such a step to old treaties, along the lines of the UN’s 2019 Mauritius Convention on transparency (pp 214-5). She notes only a few treaties currently provide a mandatory mediation step, while acknowledging the 2019 Indonesia-Australia FTA (Art 14.23), 2019 Hong Kong – UAE BIT (Art 8), and the Investment Agreement for the COMESA Common Investment Area (Art 26(4) of the 2007 version).[2] Nonetheless, the general argument that mandating mediation goes against its consensual essence is challenged by developments in domestic legal systems (with courts often requiring some initial good faith mediation attempt) and cross-border resolution (with many contracts now committing to mediation before arbitration). Recent empirical research into investment dispute settlement patterns also challenges other concerns often expressed about mediation.[3] Ishikawa’s proposals for mediation, to involve third parties in resolving disputes involving environmental issues, could therefore be bolder on this point. Overall, this book is comprehensive, erudite and balanced, articulating many compelling insights for a variety of legal experts interested in counterclaims and other mechanisms to reassess ISDS and the IIA system. It richly deserves to inform ongoing debates on ISDS reform in UNCITRAL and other fora internationally and domestically, treaty negotiators, future academic research, and investment arbitration practice – even if some of Ishikawa’s more innovative arguments do not prevail among investment tribunals.


[1] See also eg Claxton, James and Nottage, Luke R. and Williams, Brett G. and Williams, Brett G., Mediating Japan-Korea Trade and Investment Tensions (December 3, 2019). in Nottage, Luke; Ali, Shahla; Jetin, Bruno; Teramura, Nobumichi (eds), “New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution”, Wolters Kluwer, (2021), https://ssrn.com/abstract=3497299 (with an earlier version in Journal of World Trade).

[2] The relevant provision in the latter treaty, as revised in 2017, is Art 34(4)). Ishikawa also refers to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Art 9.18) but that does not mandate mediation (emphasis added): “(1) … the claimant and the respondent should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third party procedures, such as good offices, conciliation or mediation”. See further: 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). in Nottage, Luke; Ali, Shahla; Jetin, Bruno; Teramura, Nobumichi (eds), “New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution”, Wolters Kluwer, (2021) https://ssrn.com/abstract=3548358; and (with James Claxton) http://arbitrationblog.kluwerarbitration.com/2020/09/05/pioneering-mandatory-investor-state-conciliation-before-arbitration-in-asia-pacific-treaties-ia-cepa-and-hk-uae-bit/ (updated and elaborated in Volume XIII of the Indian Journal of International Economic Law (2022) via https://ijiel.in/volume-xiii).

[3] Ubilava, Ana, Amicable Settlements in Investor-State Disputes: Empirical Analysis of Patterns and Perceived Problems (March 13, 2019). Journal of World Investment and Trade, Vol. 21, 2020, pp. 528-557, https://ssrn.com/abstract=3352181; incorporated into her PhD thesis based book (2022) https://brill.com/display/title/63844?rskey=uPsqiO&result=6.

Collective Reflections from Team Australia: Second Again in INC Moot!

Guest blog by: Ben Hines, Irene Ma, Damian Young (USyd), Isabella Keith (ANU) and Orian Ibraheim (Monash), with James Fisher (coach, ANU)

Competing in the INC Negotiation and Arbitration Competition in Tokyo was a fantastic experience for us all, substantially developing a variety of our skills in alternative dispute resolution and opening our eyes to the possibilities that exist in Japan.

From the outset, the intense preparation began even before the problem question was released. As members of Team Australia supported by the cross-institutional Australian Network for Japanese Law (ANJeL), we came together from a number of the country’s leading law schools to meet like-minded students and our fantastic coach, James. The intensity of our preparation was never a burden, and the fascinating subject matter and intellectually stimulating training developed our skillsets and collective ability to work effectively as a team unit. In addition to the competition itself, this process was invaluable to us all.

Interestingly, we discovered that INC is more than just a mooting competition: it is unique and a fantastic experience in so many ways. First, unlike other mooting competitions where you sign up for either arbitration or negotiation, INC is a competition that really tests all of your skills. Across the two rounds, both arbitration and negotiation, we were required to train for these two very different skillsets, gaining knowledge and insights that will undoubtedly benefit us all in the future. It is also not a one-off competition, and throughout our experiences with INC alumni we learned that by competing for Team Australia you really do join an extensive and amazing network comprised of teams from years past. Every alum we met was incredibly friendly and happy to give back. The team was lucky enough to visit the offices of several leading international law firms, where Team Australia alums offered their insight and experiences working in Japan and provided their office space for our preparation efforts.

In Japan, we were lucky enough to gain the unique cultural exposure that only venturing to the country itself could bring. James, a verified local after his decade in Tokyo, showed us the sides of Tokyo that might be missed by tourists alone. But our experience didn’t finish there.  Of course, the INC trip to Tokyo is very different from the usual trip of a tourist. Instead of going to Disneyland (despite our year’s question centring around a theme park) or Mount Fuji, we visited different law firm offices, including Herbert Smith Freehills and Linklaters, and the classrooms at Sophia University where we spent our time in intense preparation for the competition.

The competition itself lasted across two days and was conducted in an order that was carefully considered by the competition organisers – arbitration on the first day, and negotiation on the second day. According to the steering committee, this is because they wished to encourage a collaborative and intercollegiate approach to future disputes, and by practicing both forms of resolution the legal minds of the future will be well-equipped. Both rounds ran for approximately 4 hours, though the arbitration round ran even longer given that the process was entirely controlled by the Tribunal. This was a huge test of physical and mental endurance, and if you decide to compete in the future, we will strongly suggest you bring some food so you can recharge during the break!

We were lucky enough to compete against Chuo University and Sophia University across our two hard-fought yet collegial rounds. The quality of the competition was exceptionally high, which put our skills to the test in order to achieve the best results we could. Thankfully, given our extensive preparation efforts, we were able to face any challenge thrown at us. After our round, both opposing teams were incredibly kind, and we made new friends that we are excited to stay in contact with!

Sitting in the final closing ceremony, we were happy to learn our hard work had paid off, and not only had we won the Best English Negotiation and second in English Arbitration by a mere one point but had come second overall in the competition (by a similarly minor margin)!

We will never forget the experience, and we encourage anybody interested to apply – you certainly won’t regret it.

Postscript by James Fisher (Lecturer @ ANU, ANJeL co-convenor for teaching and learning):

As the team’s coach, it was a pleasure and privilege to witness their skills develop and watch their stunning performances at the competition in Tokyo. They definitely demonstrated the high quality of the emerging jurists at Australia’s top law schools. Their personal success, the growing and supportive alumni community they have joined, and the lessons they will apply to their future studies and careers prove the enduring value of the collaborative inter-varsity project that is INC Team Australia, supported by the Australian Network for Japanese Law. I hope Ben, Irene, Damian (USyd), Isabella (ANU) and Orian (Monash) are as proud of themselves as we are of them!

Australia’s (Dis)Engagement with Investor-State Arbitration: A Sequel

A seminar held on 10 November 2022 during the Australian Arbitration Week, organised by the UNCITRAL National Coordination Committee for Australia (UNCCA) and hosted by Allens in Melbourne, discussed “Australia’s engagement in the ISDS [investor-state dispute settlement] reform process”. My presentation divided successive governments’ approach into three significant eras over the last decade or so: anti-ISDS (2011-13), case-by-case ISDS (2014-21), and uncertainty (2022-).

Some of the uncertainty in this current third era has dissipated since the seminar. On 14 November Australia’s current Trade Minister Dan Farrell declared that the new Labor Government “will not include ISDS in any new trade agreements” and would attempt to reduce their impact in existing agreements. On the latter point, he stated that “when opportunities arise, we will actively engage in processes to reform existing ISDS mechanisms to enhance transparency, consistency and ensure adequate scope to allow the Government to regulate in the public interest”. The announcement has already generated concern from commentators from the Business Council of Australia and legal practice, including Dr Sam Luttrell (who also presented at the UNCCA seminar). Below I locate the Trade Minister’s announcement in context and sketch some implications, drawing partly on my 2021 book of selected essays on investor-state and commercial arbitration, focusing on Australia and Japan in regional and global contexts. 

Before this sequel, in the first era beginning in 2011, the centre-left (Labor/Greens) Gillard Government had declared that Australia would no longer agree to any form of ISDS in future bilateral investment treaties (BITs) or FTA investment chapters. That stance derived partly from the Productivity Commission’s recommendation (by majority) in its 2010 report into international trade policy more generally, which favoured more unilateral liberalisation measures and was skeptical about proliferating FTAs from a more laissez faire perspective. On ISDS provisions, the draft and then final reports asserted that there was no good evidence that offering them led to more FDI flows, Australian investors did not invoke investor-state arbitration, and ISDS could lead to “regulatory chill”. Additionally, the Gillard Government anti-ISDS policy from 2011 was driven by concerns from the political left about investment and trade liberalisation generally. It was probably also influenced by Philip Morris Asia initiating the first-ever ISDS dispute against Australia around this time, challenging Australia’s tobacco plain packaging legislation under the (then) BIT with Hong Kong. The anti-ISDS policy delayed conclusion of major FTAs with China, Korea and Japan, large exporters of capital to Australia which pressed for such provisions.

However, after the centre-right Coalition government won the election in late 2013, it reverted to the pre-2011 approach of agreeing to ISDS provisions on a case-by-case assessment. FTAs were soon concluded with China and Korea, including ISDS. The FTA concluded with Japan did omit ISDS, but probably because it did not offer Australia sufficient extra export market access or other benefits, at a time when the Coalition Government had difficulties passing legislation through the upper house of Parliament. Japan’s longer positive experience of investing in Australia also meant it could play the long game and seek ISDS-backed protections through other treaties, which it eventually achieved in fact through both countries ratifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership mega-regional FTA (CPTPP, in force for both states from 2019). The Labor Opposition voted with the Government to pass tariff-reduction legislation needed to ratify these ISDS-backed treaties, unlike the Greens, declaring the Labor Party’s continued opposition to ISDS but assessing the FTAs as overall in the national interest.

Additionally over this second era, the Coalition Government omitted ISDS in the PACER-Plus FTA with Pacific Island micro-states, given their limited inbound investment prospects and capacity as host states to defend ISDS claims; and in the Regional Comprehensive Economic Partnership (RCEP) ASEAN+5 FTA, probably because almost all pairs of its 15 member states have at least one ISDS-backed treaty among themselves anyway. The Coalition Government also renegotiated a few early FTAs and BITs (eg with Singapore, Uruguay and Hong Kong), replacing them with CPTPP-like provisions to clarify provisions or make them somewhat more pro-host-state in light of emerging investment treaty case law. It also solicited public submissions to inform a review of older treaties, although the Government did not then publish a report (let alone any Model BIT) formalising its evolving negotiating preferences. Australia further ratified the Mauritius Convention in 2020 to help retrofit transparency provisions on older treaties, although this will bite primarily only if other states also ratify the Convention and so far few have done so.

Australia’s renewed nuanced approach towards ISDS over 2014-21 may have been influenced by some (but not very strong) evidence, in Asia and more widely, that ISDS provisions do in fact have significant positive impacts on FDI flows. Also, ratifying investment treaties globally certainly impacted FDI, meaning that a minority of states increasingly holding out against all ISDS would have instead reduced ratifications and therefore FDI flows. Other empirical research, highlighted by Dr Sam Luttrell at the recent UNCCA seminar, adds that ISDS-backed treaties reduce the cost of syndicated loan finance for cross-border investors.

Luttrell’s presentation further reinforced how Australian investors (particularly in long-term resources projects) not only take into account ISDS protections but also started commencing outbound investor-state arbitrations under Australian treaties (or contracts) alleging host states have violated their substantive commitments. This is especially so since the successful White Industries v India award in 2010, which the Productivity Commission seems to have been been unaware of. Concerns about “regulatory chill” also seem to have declined as Australia defeated Philip Morris Asia on jurisdiction in 2015 (and Uruguay later defeated the parent company on the merits regarding its own tobacco packaging measures), and as no further inbound ISDS arbitrations were commenced against Australia. Nonetheless, perhaps because ISDS remained a live issue in parliamentary treaty ratification hearings and successive Coalition Governments did not control the upper House, Australia does not seem to have been particularly vocal in multilateral ISDS reform discussions in UNCITRAL or ICSID, although it has participated.

After Labor won the general election in May 2022, the new Government had not publically declared its policy approach towards ISDS, until the Trade Minister’s announcement on 14 November. At the UNCCA seminar the week before, I noted that the foreign ministry’s website still stated that Australia assesses ISDS on a case-by-case assessment. However, setting policy going into the election, the Labor Party’s 2021 National Platform had reiterated that “Labor will not enter into agreements that include ISDS provisions” (p9 para 45). In addition, it stated (p94, paras 33-34):


“Labor in government will review ISDS provisions in existing trade and investment agreements and seek to work with Australia’s trading partners to remove these provisions. While this process is underway, Labor will work with the international community to reform ISDS tribunals so they remove perceived conflicts of interest by temporary appointed judges, adhere to precedents and include appeal mechanisms.

Labor will set up a full time negotiating team within the Department of Foreign Affairs and Trade whose sole job will be to negotiate the removal of ISDS clauses …”

Until 14 November 2022, there had been no public announcement about any such initiatives.

* * *

Accordingly, at the UNCCA seminar, I pointed out that Australia’s major ongoing FTA negotiations involving investment were with India (with a provisional agreement reached only on trade related matters) and the European Union. India unilaterally terminated its BIT with Australia in 2017, as part of its broader policy of winding back protections for foreign investors since the White Industries award and successive claims against India under other older treaties. Although India’s new Model BIT from 2016 retains ISDS, it provides a narrow window and its substantive protections are heavily circumscribed, and India has been able to only conclude a few new investment treaties from this negotiating position. Even maintaining the second era’s case-by-case assessment policy, I therefore considered it quite possible that Australia and India could end up agreeing on a parallel investment treaty that leaves only inter-state arbitration, especially if India offered significant preferential market access to Australian investors.

Omitting ISDS is now the only possibility, under the newly announced Labor Government stance, but India now may not offer as much market access or other benefits to Australia. A better compromise, given problems encountered by foreign investors in India as well as JNU Prof Jaivir Singh’s empirical evidence that ISDS-backed treaties cumulatively have had positive impact on FDI inflows for India, could have been a CPTPP-like investment treaty with some further innovations. Those might include a mandatory mediation step before arbitration, as Australia agreed upon (unusually) with Indonesia in 2019 but not with Hong Kong.

Australia is also still negotiating an FTA with the EU. Since 2015, as a partly political compromise internally, the EU offers only an “investment court” alternative to traditional ISDS, on a take it or leave it basis. Singapore took this option, for example, but Japan did not (preferring to stick with pre-existing BIT with EU member states with traditional ISDS, and watching longer term multilateral reform discussions). Australia should probably take the investment court option, to secure an overall better FTA deal, as I have argued (with Prof Amokura Kawharu) also for New Zealand after it too from 2018 mimicked Australia’s first anti-ISDS policy. Arguably, this option is not “ISDS” so it would not conflict with the Labor Party’s 2021 platform and now the 14 November 2022 Labor Government’s anti-ISDS position. Although the EU’s investment court model allows foreign investors the right to directly commence arbitration, they cannot nominate arbitrators; they instead are pre-selected only by the home and host states, and then randomly assigned to hear the claim (and any appeal). If Australia adopts this interpretation of its stance eschewing ISDS, to conclude a deal with the EU, this would also signal to other regional players and UNCITRAL delegates that there is scope to be flexible in investment treaty negotiations.

However, one wild card for Australia has been that a right-wing politician and mining magnate (Clive Palmer) escalated complaints in 2020 by formally seeking consultations with the federal Government and then notifying a dispute through his Singaporean company (Zeph), after unsuccessful constitutional and other domestic law challenges. They allege expropriation and breach of fair and equitable treaty (denial of justice) related to Western Australian state legislation impacting on iron ore rights and related past domestic arbitration awards. Given his high public profile, and rights originally held by his Australian company being transferred to Zeph in Singapore, if and when an ISDS arbitration is commenced (potentially from early 2023) under one of Singapore’s multiple treaties with Australia, this risks another Philip Morris Asia moment. An arbitration filing would certainly rekindle media and political interest in ISDS, which peaked in Australia over 2010-16.

In addition, concerns were reportedly being raised last week about potential ISDS claims brought by Asian and other investors and in Australian gas resources under the Labor Government’s plans to deal with the global energy crisis. Announcing now a renewed anti-ISDS policy may help pre-empt public criticisms in this respect as well. However, any such claims would be preserved under existing treaties, while substantive commitments made under Australia’s treaties (especially FTAs) anyway give the host state considerable scope to introduce emergency measures.

Whatever the impact of these potential claims on its policy-makers, Australia’s renewed anti-ISDS posture will make it even more difficult for RCEP to add ISDS protections, unless the Labor Government backtracks or loses the next elections in 2025. ISDS must be discussed again among member states within 2 years of RCEP coming into force, with a decision then on whether and how to add ISDS to be reached within another 3 years (Art 10.18). Any implications for Australia’s recently concluded review of its FTA with New Zealand and Australia have yet to be spelled out. In addition, the new Labor Government policy will probably have further ripple-on effects particularly across the Asia-Pacific region. It could also potentially impact on wider multilateral discussions about ISDS in UNCITRAL, and even on the “modernisation” of or withdrawal from the ISDS-backed Energy Charter Treaty (which Australia signed in 1994 but never ratified), especially if the Australian government can articulate more specifically the arguments and evidence for adopting this renewed anti-ISDS position.

“Crisis as an Opportunity for Development of Japanese Law”

Following on the inaugural ANJeL-in-Europe symposium organised by Prof Giorgio Colombo for UPavia in late 2019, Dr Wered Ben-Sade and other attendees or associates are participating online in this law-related session on the first day of the Sixth Bi-Annual International Conference of the Israeli Association for Japanese Studies (15-17 November 2022).

Chair: Wered Ben-Sade Bar-Ilan University, Israel

CRISIS AS AN OPPORTUNITY FOR DEVELOPMENT OF JAPANESE LAW
Chair: Wered Ben-Sade
Crises create new opportunities for development, particularly when traditional perceptions and customs (or habits) are questioned and reexamined. Similarly as “Necessity is the mother of invention” (Plato), crises push us out of our comfort zone while simultaneously lowering the risks of change, thus motivating us to operate differently in order to solve them or improve our response. This is true both at the micro, personal level, and at the macro level of society. Understanding this mechanism at the macro level can facilitate us when we encounter a personal crisis and inspire us to search for the opportunity that is encapsulated within.
Five presentations will examine how crises serve as an opportunity for the development of Japanese law, both in the past (from the second half of the 19th century) and now. Some of the most debated challenges that Japan and the world are currently facing, such as inclusiveness of women, legal education, Covid19 impact and sustainability (in the context of corporate governance), will be discussed.

Béatrice Jaluzot Lyon Institute for Political Sciences & Lyon Institute for East Asian Studies
Crisis as an opportunity for development from a historical perspective: The choice of a positivist legal system following the signature of the Unequal Treaties
In the second half of the 19th century, Japan experienced the collapse of a thousand-year-old culture based on the Chinese model and the emergence of a society inspired by Western models. The disappearance of the old regime, caused by the imperialist movements of the time, gave way to a country that was profoundly renewed in all its fundamental structures. Among them, the country’s legal system was one of the essential novelties and one of the main achievements of the new leaders. They were thus able to set up institutions that are still largely those of today. The aim is to present how this legal system is the result of this brutal overthrow of the regime, but also to understand how the accelerated transition from which it emerged took place. This rupture gave rise to the powerful and efficient structures we know today.

Makoto Messersmith University of Hawaii at Manoa, USA
Insights on the possibility of inclusiveness of women in law studies of Japan
When we look at the status quo and history of female law professors in the U.S. and Japan, it shows that unlike the U.S., Japan has not experienced great improvement regarding inclusiveness of women into law studies, yet. Although it seems that Japan has made some efforts to encourage more women to enter the field of law, women in law studies are still facing unique challenges. For instance, in many universities, female law professors are still less than 20%. In my talk, I will explore their challenges and discuss how we can encourage more women to be included in law studies.

Luke Nottage University of Sydney, Australia and Ken’ichi Yoneda, Kagoshima University, Japan
Introducing ICT into Japanese Legal Education:
The Postgraduate Law School Movement and Covid-19 as Cornerstones
This report explains the evolution of online legal education in Japan, particularly in its universities. Three phases can be discerned: before and after the introduction from 2004 of a new postgraduate Law School system to improve and expand core legal professionals, as part of a wider justice system reform program, and a more dramatic expansion prompted by the COVID-19 pandemic since 2020. The Law School reforms had trickled down somewhat to undergraduate legal education, building on and linking to wider nationwide and university-sector initiatives in Information and Communications Technology. This fortunately positioned Japanese legal education quite well for pandemic-related challenges, although the transitions have not been easy.


Ying Hsin Tsai College of Law, National Taiwan University
The Development of Shareholder Activism following the COVID-19 Pandemic
The development of shareholder activism in Japan, thanks to the COVID-19 pandemic, creates new opportunities. The Japanese company law designs assorted ways by which shareholders can participate in shareholders’ meeting, even if they cannot attend in person (e.g. proxy, written voting and electronic voting). Due to the pandemic, the shareholders’ meeting could not be held in-person, and instead these other ways were gradually put to use. In this presentation I will discuss the practical merits and legal drawbacks surrounding these ways. The overall picture that emerges is that while providing a variety of ways for shareholders to participate in the shareholders’ meeting itself can certainly enhance the practice of shareholder activism, how to design these ways in a manner which overcomes the legal issues remains a challenge.


Kozuka Soichiro Faculty of Law, Gakushuin University, Japan
Introducing Sustainability into the Japanese Corporate Governance
Japan’s corporate governance practice is making rapid developments towards engaging with sustainability. Japan has already the largest number of companies in the world, which have announced support for the TCFD (Taskforce on Climate-related Financial Disclosures) framework. The development towards sustainability will probably continue, induced by the external global crisis of the need for sustainability, and by the internal pressure of the institutional investors. In this presentation I will evaluate the current and expected developments. The Japanese nuances in both regulation and practice of corporate governance will also be discussed.

Guest Blog: ‘Exporting Japanese Legal Ideas to the Mekong Subregion of ASEAN’

Written by: Asst Prof Nobumichi Teramura (for MPI Hamburg Festchrift conference, 1-2 September 2022) [for the full paper, not just Part I below, you may try checking his webpages or contacting him]

[Abstract] Japan has long been a successful importer of western legal systems. The country has also exported its law to the rest of Asia for many years. Japan’s national ODA agency – the Japan International Cooperation Agency (JICA) – has been offering legal technical assistance projects since the 1990s. These initiatives have impacted the development of legal systems in Central and Southeast Asian countries. In particular, the outcome of the projects in the countries along the Mekong River is allegedly outstanding in terms of their comprehensive influence on the private laws of Vietnam, Cambodia and Laos. The projects have arguably helped these host countries establish and reform a significant number of private law frameworks. Nevertheless, the extensive work by Japanese legal experts has been struggling with a low profile and a lack of international recognition, most likely due to a lag in anglophone scholarship that delivers a sufficiently detailed examination of the current private laws of those host countries and their operation in practice. This paper intends to address the gap by providing a critical (albeit preliminary and succinct) evaluation of how Japan’s legal technical assistance has led Japanese legal ideas to form part of the legal pluralism in the Mekong Subregion of ASEAN. It also encourages Japanese and local law experts to undertake further actions to re-assess the influence of Japanese law in these countries.

Part I. Introduction: Exporting Japanese Law to the Rest of Asia

Japan has long been perceived as a successful example of legal transplantation based on western models such as the legal systems of Germany, France and the US.[1] However, Japanese law has rarely treated as a source of legal ideas that are applicable outside Japan.[2] When it comes to Japan as a source of legal influence, commentators tend to focus on the country’s role in disseminating a modern German-style legal system to its neighbouring countries, but not on how Japanese law itself has influenced legal thinking in those countries.[3] Moreover, little attention is paid to how these countries are inspired by specific aspects of Japan’s success in importing western legal concepts because commentators are inclined to attribute the success to the specific institutions, culture and environment of Japan, perceiving Japan’s experience as inapplicable to other countries.[4] Those commentators writing in English appear to confine Japanese law and its legal institutions to Japan’s domestic domain.

However, Japanese law has extended its reach to Southeast Asia, as pointed out by several scholars in the last few decades. For instance, Tamura refers to Dr Tokichi Masao’s significant contribution to the codification of modern civil laws in Thailand during his tenure as the General Legal Adviser to the Kingdom of Siam in the early 20th century.[5] Tamura also reminds us that Thai commissioners adopted the (old) Japanese Civil Code as the foundation for their reception of the German Civil Code into the 1925 Revised Civil and Commercial Code of the Kingdom of Siam.[6] Moreover, Taylor highlights the importance of reviewing Japan’s legal technical assistance since the 1990s in the Association of Southeast Asian Nations (ASEAN) and beyond, suggesting that it reveals ‘ongoing tension between a western/globalized vision of rule-of-law assistance and the political imperatives at the national/local level’.[7] Along with Taylor’s thesis, this paper advocates for the need to examine the impact of Japanese positive law through the technical assistance in a recent hotspot for the global economy and comparative legal studies – the Mekong Subregion of ASEAN.[8]

These days, countries along the Mekong River, such as Vietnam, Cambodia and Laos, have been gaining new economic prominence and increased global attention because of geopolitical tensions brought about by the COVID-19 pandemic and the US-China trade war.[9] Many multinationals have been relocating their factories from China to those countries in the Mekong Subregion for cost reduction and risk aversion,[10] being attracted to the competitive labour costs, liberal economic policies, trade openness, social stability and growth potential of those countries.[11] Those foreign investors and experts working on the field of international business are so interested in the legal environments of the host states that much has been written about the legal and judicial systems of the countries along the Mekong River.[12]

Japan’s national ODA agency, the Japan International Cooperation Agency (JICA),[13] has since the 1990s been committing to the modernisation of law in the Mekong Subregion (and other countries) through its legal technical assistance projects.[14] Especially, Japanese legal advice provided through the assistance projects have heavily influenced the private laws of Vietnam, Cambodia and Laos, according to Japanese commentators[15] and mainstream media.[16] Nevertheless, we can rarely find corresponding observations or relevant discussions in anglophone scholarships or official documents issued by the governments of English speaking countries.[17] Thus, this paper critically and succinctly evaluates how Japanese legal ideas have shaped part of the legal pluralism in Vietnam, Cambodia and Laos, calling for further research to assess the influence of Japanese private law in these jurisdictions. It also discusses whether and how such research may help Japanese legal studies and local legal practice overcome challenges they have faced.


* Assistant Professor of ASEAN and Asia-Wide Integration, Universiti Brunei Darussalam; Affiliate, Centre for Asian and Pacific Law in the University of Sydney (CAPLUS); ANJeL-in-ASEAN Convenor, Australian Network for Japanese Law. The author acknowledges […]. Note that this paper is based on the following articles written by this author: Nobumichi Teramura, ‘Japan as a Source of Legal Ideas: A View from the Mekong Subregion of ASEAN’ (2021) 13 New Voices in Japanese Studies 19; and Nobumichi Teramura, ‘JICA and Regional Soft Power: Japan’s Legal and Judicial Development Project in Vietnam, Cambodia and Laos since 1996’ (2022) IAS Working Paper Series <https://ias.ubd.edu.bn/wp-content/uploads/2022/05/working_paper_series_69.pdf> .

[1] Michele Graziadei, ‘Comparative Law, Transplants, and Receptions’ in Mathias Reimann and Reinhard Zimmermann (eds), Comparative Law, Transplants, and Receptions (Oxford University Press 2019) 449; Mathias Siems, ‘The Power of Comparative Law: What Types of Units Can Comparative Law Compare’ (2019) 67 American Journal of Comparative Law 861, 865.

[2] Veronica Taylor, ‘Spectres of Comparison: Japanese Law through Multiple Lenses’ (2001) 6 Journal of Japanese Law 11.

[3] Chen Lei, ‘Contextualising Legal Transplant: China and Hong Kong’ in Pier Giuseppe Monateri (ed), Methods of Comparative Law (Edward Elgar Publishing 2012); Uwe Kischel, Comparative Law (Oxford University Press 2019) 55, 689, 699, 728–35; Graziadei, ‘Comparative Law, Transplants, and Receptions’ 450.

[4] Stephen Givens, ‘The Vagaries of Vagueness: An Essay on “Cultural” vs. “Institutional” Approaches to Japanese Law’ (2013) 22 Michigan State International Law Review 839; Giorgio Fabio Colombo, ‘Japan as a Victim of Comparative Law’ (2014) 22 Michigan State International Law Review 731.

[5] Shiori Tamura, ‘The Role of the Japanese Civil Code in the Codification in the Kingdom of Siam’ in Yuka Kaneko (ed), Civil Law Reforms in Post-Colonial Asia: Beyond Western Capitalism (Springer 2019) 54-55.

[6] Ibid 57ff.

[7] Veronica L Taylor, ‘Rule-of-law Assistance Discourse and Practice: Japanese Inflections’ in Amanda Perry Kessaris (ed), Law in the Pursuit of Development Principles into Practice? (Routledge-Cavendish 2009) 164.

[8] The Mekong Subregion consists of Vietnam, Cambodia, Laos, Myanmar and Thailand: Shawn Ho and Kaewkamol Pitakdumrongkit, ‘Can ASEAN Play a Greater Role in the Mekong Subregion?’, (The Diplomat, 20 January 2019) <https://thediplomat.com/2019/01/can-asean-play-a-greater-role-in-the-mekong-subregion/>.

[9] Nobumichi Teramura, Shahla F Ali and Anselmo Reyes, ‘Expanding Asia-Pacific Frontiers for International Dispute Resolution: Conclusions and Recommendations’ in Luke Nottage and others (eds), New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (Wolters Kluwer 2021) 356.

[10] John Boudreau and Nguyen Dieu Tu Uyen, ‘Rural Vietnam Booms With Jobs From Apple-Led Move in Supply Chains’, (Bloomberg, 26 October 2020) <https://www.bloomberg.com/news/newsletters/2020-10-26/supply-chains-latest-apple-shift-means-boom-in-rural-vietnam>; John Reed, ‘Vietnam Prepares for Supply Chain Shift from China’, (Financial Times, 28 December 2020) <https://www.ft.com/content/e855b706-e431-4fc5-9b0a-05d93ba1bcbe>

[11] See, eg, Swiss Re Institute, ‘De-risking Global Supply Chains: Rebalancing to Strengthen Resilience’ (2020) <https://www.swissre.com/institute/research/sigma-research/sigma-2020-06.html> ; OECD, ‘Trends in Foreign Investment and Trade in Lao PDR’ in OECD (ed), OECD Investment Policy Reviews: Lao PDR (OECD Publishing 2017).

[12] See generally The MLS Academic Research Service, ‘Southeast Asian Region Countries’ Law’ (Melbourne Law School, 2022)  <https://unimelb.libguides.com/asianlaw> accessed 29 June 2022.

[13] JICA is an independent administrative institution under the Ministry of Foreign Affairs (MOFA) of Japan.

[14] Luke Nottage, ‘The Development of Comparative Law in Japan’ in Mathias Reimann and Reinhard Zimmermann (eds), The Oxford Handbook of Comparative Law (2nd edn, Oxford University Press 2019) 204-207; Zentaro Kitagawa, ‘Development of Comparative Law in East Asia’ in Mathias Reimann and Reinhard Zimmermann (eds), The Oxford Handbook of Comparative Law (Oxford University Press 2006) 254-256; MOJ, ‘Legal Technical Assistance Activities by the International Cooperation Department ~Contributing to the World Is Japan’s Strength!~’ (n.d.)  <https://www.moj.go.jp/EN/housouken/houso_lta_lta.html> accessed 29 June 2022.

[15] Yuka Kaneko, ‘Japan’s Civil Code Drafting Support for Socialist Reform Countries: Diversity of Normative Choice’ in Yuka Kaneko (ed), Civil Law Reforms in Post-Colonial Asia: Beyond Western Capitalism (Springer 2019) 155.

[16] Shuichiro Sese, ‘Japan’s Judicial Diplomacy at Crossroads as Laos Enacts Civil Code’, (Nikkei Asia, 21 May 2020) <https://asia.nikkei.com/Politics/International-relations/Japan-s-judicial-diplomacy-at-crossroads-as-Laos-enacts-civil-code> (noting that ‘Laos became the third country in Southeast Asia, after Vietnam and Cambodia, to introduce a civil code with Japanese support’).

[17] See Section 4 below.

Japan’s Influence in Comparative Law: An Australian Perspective

The Max Planck Institute for Comparative and International Private Law in Hamburg is hosting a Festschrift conference for longstanding ANJeL advisor and personal friend, Prof Harald Baum, over 1-2 September 2022 on the theme of “Comparing and Transferring Law and Legal Expertise: The Role of Japan”. My presentation and essay honouring Prof Harald Baum begins by locating Australia’s burgeoning Japanese law engagement since the 1980s amidst multiple “worlds” or genres of Japanese legal studies worldwide, and the ambivalence of hitching Japanese legal studies to the wider rising star of “Asian law” engagement (Part I [reproduced below]). It focuses on the unique cross-institutional Australian Network for Japanese Law (ANJeL) that has promoted comparisons with, and understanding of, Japanese law since its establishment in 2002, including sustained support from Harald Baum (Part II). The essay surveys achievements and challenges in research, funded projects and publications in Japanese law (Part III), teaching and learning initiatives about Japanese law (Part IV) and wider community engagement (especially between the legal professions in Japan and Australia) also facilitated by ANJeL (Part V). It concludes that Japanese law engagement has remained surprisingly strong, despite the attraction of diversifying into Asian law more widely, although both fields are facing challenges nurturing the “next generation” of experts in Australia. 

I. Introduction: Consolidating Japanese Law in Australia

Japan has long been an attractive subject for comparative law. It first provided a rich case study of successfully “importing” law – first on Chinese, then Western models – interacting with indigenous norms and institutions. Japan then attracted interest for “exporting” law – in parts of Asia in the colonial era, to the West since its economic heyday in the 1980s, and to Asia and elsewhere over the last few decades as part of Japan’s overseas development aid programs. Japan has also been central to developing, and often empirically testing, theories as to how law interacts with society.[1] As is now well known, the main contenders are that “the Japanese don’t like law” (the culturalist theory), “they can’t like law” (the institutional barriers theory), “they are made not to like law” (the elite management theory), “they like predictable law” (the economic rationalist theory, implying instead that the legal system works well), or some hybrid approach.[2]

The world of Japanese law scholarship, however, has divided into several sub-worlds.[3] First, “Japanese law” comprises studies published in English, mainly by those versed in the Anglo-American legal tradition. The US sub-tradition – led by its elite law schools – favours analyses that engage big theoretical issues, often influenced by disciplines other than law (such as cultural studies, politics or economics), and related empirical work. Topics for analysis also tend to be quite wide-ranging. The English sub-tradition favours more black-letter analyses, with more focus on practical issues particularly in business law. Secondly, the German-language scholarship comparing Japanese law, “Japanisches Recht”, is likewise often quite black-letter in its approach but also covers quite a wide range of topics, thanks to a shared legal history. Thirdly, we have studies of “nihon-ho” written in Japanese, mostly by Japanese scholars for a Japanese audience, which of course cover all topics in Japanese law. The analyses tend to be mostly black-letter law but alongside a rich tradition of legal theory and sociology, sometimes impacting on legal analysis directly, and sometimes impacting indirectly as some Japanese scholars spend time in or with US law schools.

Australia generally follows the English sub-tradition, and its related variant of the common law based on more formal reasoning patterns and supporting legal institutions.[4] Yet by the 1980s, when Japanese law scholarship started to take off in Australia, it had already come under more influence generally from US approaches to legal analysis. (Scholarship in England itself was also developing more emphasis on “law in context” and substantive reasoning.) From the outset, therefore, Japanese law studies in Australia tended to combine both black-letter and contextualist analyses – albeit arguably with more theoretical ecumenicalism than say than in the US.[5] For practical reasons, namely burgeoning trade and investment relations, the focus did tend to be on business law topics. However, as bilateral relations broadened (including more geopolitical links and shared involvement in international treaty regimes), and as the numbers of Japanese law scholars and publications gradually grew, a wider array of Japanese law topics were researched and taught. This broadening and accretion arguably generated more influence from Japanese law for students, legal professionals, and makers of law and policy in Australia.

However, Australia engaged in, and was more impacted by, Japanese law scholarship from the 1980s, during the same period as Australia also ramped up its studies of Asian legal systems more generally. This was a double-edged sword. On the one hand, it allowed scholars to get university appointments and research grants by invoking the broader, and therefore more appealing, category of “Asian law”. Sometimes there were good methodological reasons for emphasising the wider category, given the historical or structural links between Japanese and other Asian legal systems, but there were also practical advantages for securing resources to pursue the study of Japan “within Asia”. As can happen with new fields of law, history or other fields of scholarship,[6] some commentary emphasised how “Asian law” was distinct from the field of comparative law. However, other work argued that the latter had become more interdisciplinary in approach as well, certainly by the turn of the 20th century.[7]

On the other hand, hitching Japanese law scholarship to the rising star of “Asian law” also had potential downsides. Research and publications could end up being directed at Asian legal systems, “hollowing out” Japanese law scholarship and teaching. Coupling Japanese with Asian law also risked undermining a Japan focus and commitment by Australian law schools if and when they reduced their enthusiasm for Asian law. Indeed, a recent short survey of Asian law scholarship for the Asian Studies Association of Australia suggests that that day is already nigh, arguably reflecting a reduction in government and other support across universities for Asia-focused initiatives more generally. Nonetheless, that analysis acknowledges that Asian law expertise remains underpinned by university centres or other institutional arrangements, which are difficult to unwind, thus making its impact more sustainable even if individual scholars find fewer appointments, research grants or teaching opportunities.[8] Even if the focus on Asian law does diminish in Australia, therefore, the institutional entrenchment of Japanese law may shield it from diminishing relevance and influence.

This essay therefore concentrates on a key organisation that has promoted comparisons with, and understanding of, Japanese law over the last two decades, catching the Asian law wave and hopefully riding it out reasonably well if and when that wave fades away. Supported from the outset by Harald Baum, the Australian Network for Japanese Law (ANJeL) has hopefully created sufficient critical mass to ensure that Japanese law continues to have widespread impact not just across academic research in Australia, but also to a significant extent within the legal profession and even some aspects of the wider community. Maintaining a solid base for the “export” of Japanese law into these sectors in Australia, in turn, should allow Japanese counterparts to productively “re-import” elements of Australian law and practice.


[1] L. Nottage, The Development of Comparative Law in Japan, in: M. Reimann and R. Zimmerman (eds.) The Oxford Handbook of Comparative Law (2019) 201, with a manuscript version at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3276469.

[2] M. Abe and L. Nottage, Japanese Law, in: J. Smits (ed.) Encyclopedia of Comparative Law (2020) (forthcoming), with a manuscript version of this contribution for a third edition at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3672112.

[3] L. Nottage, Japanisches Recht, Japanese Law and Nihon-ho: Towards New Transnational Collaboration in Research and Teaching, Journal of Japanese Law 2001, 12, 17; T. Ginsburg, L. Nottage and H. Sono (eds.), The Multiple Worlds of Japanese Law: Disjunctions and Conjunctions (Victoria, Canada 2001). Compare also H. Baum, Teaching and Researching Japanese Law: A German Perspective, in: S. Steele and K. Taylor (eds.) Legal Education in Asia: Globalization, Change and Contexts (2011) 89

[4] See generally L. Nottage, Form, Substance and Neo-Proceduralism in Comparative Contract Law: The Law in Books and the Law in Action in England, New Zealand, Japan and the U.S. (Ph.D in Law thesis, Victoria University of Wellington, 2002), available via http://hdl.handle.net/10063/778.

[5] M. Smith, Australian Perspectives on Asian Law: Directions for the Next Decade, in: V. Taylor (ed.) Asian Laws Through Australian Eyes (2007) 3. As an example of more black-letter Japanese law works led by Australia-based scholars, Veronica Taylor took over editing and writing for the CCH Japan Business Law Guide loose-leaf series from 2000-2006, followed by Luke Nottage until 2009. A volume comprising four of its chapters was also spun off as CCH Business Law in Japan, Volume 1 (2008, Singapore/Tokyo: CCH, ISBN 978-4-915845-08-6).

[6] Examples include how the leaders of the Enlightenment distinguished the preceding supposed “Dark Ages”, or how promoters of mediation differentiated that process as more purely consensual and hence more genuine “alternative dispute resolution” compared to arbitration: L. Nottage, Is (International) Commercial Arbitration ADR?, The Arbitrator and Mediator 2002, 20, 83, also at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=838044.

[7] Compare V. Taylor, Beyond Legal Orientalism, in: V. Taylor (ed.) Asian Laws Through Australian Eyes (2007) 47 with L. Nottage, Comparative Law, Asian Law, and Japanese Law, Journal of Japanese Law 2003, 8, 41 also at https://ssrn.com/abstract=837964.

[8]  M. Crouch, ‘Asian Law in Australian Universities: Research centres as critical institutional commitments’, Asian Studies (Blog Post, 21 April 2020) https://asaa.asn.au/asian-law-in-australian-universities-research-centres-as-critical-institutional-commitments/.

Commercial Dispute Resolution and Arbitration in Japan

Written by: Luke Nottage and Nobumichi Teramura (unfootnoted draft for Sarah Biddulph and Kathryn Taylor (eds) Elgar Concise Encyclopedia of Asian Law, Elgar, forthcoming)

 “Commercial Dispute Resolution and Arbitration in Japan”

For: Elgar Concise Encyclopedia of Asian Law

Luke Nottage and Nobumichi Teramura

1. Civil Procedure and Litigation

The Civil Procedure Code, enacted as the framework for civil litigation in the late 19th century as Japan adopted a modern Western legal system, derived mainly from German law. The Code  experienced significant reforms after WW2 (adopting the more “adversarial principle”) and 1998 (based partly on some emerging court practices, to streamline identification of legal issues and related evidence-taking, as well as new small claims procedures and other provisions to reduce delays).[1] The 1999-2001 Justice System Reform Council Recommendations resulted in introducing expert commissioners to advise judges in complex cases, an advance notice of suit option, and other “micro”-level reforms, but also expanded numbers of bengoshi lawyers and judges aiming for “macro”-level impact.[2] Those Recommendations sought mainly to reduce perceived “structural barriers” to initiate lawsuits, which arguably underpin a comparatively low civil litigation rate in Japan especially over the 1950s-70s. However, some instead argue that this low propensity to sue is related to “cultural” factors like preferences to avoid confrontation and fear of “losing face” (although this may be related to risk-averseness especially in larger organisations), or a rational avoidance of litigation costs by settling in the shadow of comparatively predictable substantive law in Japan.[3]

Japan’s still predominantly civil law tradition means that civil litigation maintains various features not usually found in common law systems. These include limited pre-trial discovery (although some analogues[4]), non-continuous trials (though delays decreased from 2000s), no juries (only for some serious criminal cases, reintroduced from 2009), active case management by judges (including right not duty to “clarify” the law especially for self-represented litigants, and encouragement of settlement), three career judges hearing complex civil cases at first instance, and no dissenting opinions published (other than in the highest Supreme Court).[5]

2. Mediation

In Japan, mediation is mostly court-annexed, with tradition going back to the pre-WW2 era (eg farm tenancy disputes,[6] although such disputes were often settled through direct and informal negotiations between land owners and tenants). Parties may choose between two main types of mediation. One is conducted by the judge(s) assigned the case, although in larger courts like Tokyo and Osaka, the case may be referred to a division where mediation is attempted by other judges, and then returned to the original judge(s) if settlement fails. The second type is mediation under the 1951 Civil Conciliation Act, mandated by the court or more typically agreed by parties: a conciliation committee consisting of a judge and two non-judges having expert knowledge and experience lead the mediation settlements. In both scenarios, it is quite common among the judicial mediators to caucus separately with each party (unlike eg Germany, where judges encourage settlement in open court).[7]

The government also provides mediation service. For instance, some formal government-supported mediation is available, eg for environmental pollution or neighbourhood disputes (eg noise),[8] or recently for financial institutions.[9] Informal government-supported mediation schemes are available too for consumer disputes, through Consumer Lifestyle Centre. The government also promoted criteria (such as independence of formal mediators from any industry associations) for Product Liability (PL) ADR Centres, created from the mid-1990s.[10]

Due to very high public trust in the court-annexed and government-supported schemes, government financial support for them and perhaps still comparatively fewer disputes, Japan has less privately-supplied mediation services. The Justice Reform Council perceived this as another structural barrier, so the 2004 Act on Promotion of Use of Alternative Dispute Resolution encouraged private mediation through government certification to build trust and visibility, allowing such organisations to make limitation periods tolled during their mediations (unlike non-certified mediation suppliers).[11] Many got certified, both some old institutions (like Bar Associations providing mediation services) and quite a few new ones (such as Japan Sport Arbitration Agency),[12] but caseloads have not increased much especially for commercial dispute resolution.[13]

3. Arbitration

Arbitration legislation was also initially also derived originally from Germany: the arbitration section in its Civil Procedure Code also from the late 19th century. This legislation remained basically unchanged in Japan’s 1998 civil procedure reform, despite an earlier push from academics to adopt the 1985 UNCITRAL Model Law template that was starting to spread especially around the Asia-Pacific region. Arbitration was seen as less important compared to improving the civil litigation and mediation environment because it was little used domestically (except eg a scheme for disputes between construction companies and the government).[14] For international transactions, Japanese commercial parties seemed quite content to agree to arbitration in foreign seats, perhaps in exchange for other benefits received in contract negotiations. Part of the thinking may also have been they were unlikely to get involved in (expensive) formal dispute resolution and, in particular, to initiate claims. Hence some Japanese parties and their legal advisors established the comparatively unusual practice of “finger-pointing clauses” in arbitration agreements, designating the defendant’s domicile as the seat of arbitration.

Accordingly, the caseloads of the Japan Commercial Arbitration Association (JCAA) and Tokyo Maritime Arbitration Commission (TOMAC), as well as other international arbitrations with seat in Japan (eg under the ICC Arbitration Rules or ad hoc UNCITRAL Arbitration Rules), remained few even over 2000s, while Asian centres in Singapore, China and HK recorded large increases in arbitration cases. Nevertheless, more foreign counsel and arbitrators joined the arbitration market especially after the 2003 reform of the Act on Special Measures Concerning the Handling of Legal Services by Foreign Lawyers (the Foreign Lawyers Act) that allowed full profit sharing with international firms established in Japan. There also remained a salient practice of Arb-Med, with arbitral tribunals actively encouraging settlement, especially when Japanese parties, counsel and/or arbitrators were involved.[15]

As part of Justice System Reform Council Recommendations, however, the 2003 Arbitration Act was enacted based on the 1985 UNCITRAL Model Law. Some tweaks to that template included extending it from international to domestic arbitration cases (hence, allowing no appeals for errors of law), adding criminal sanctions for corrupt arbitrators (to build trust in arbitration), and requiring express written consent from parties for Arb-Med (given natural justice concerns). Case law has been generally pro-arbitration, enforcing most foreign arbitral agreements and awards in accordance with the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.[16] However, not many judgments, including those related to international arbitration, are translated into English. Few judges give speeches promoting Japan as a seat for arbitration or go on to become arbitrators after retirement — instead, most have been professors and (increasingly) local or foreign lawyers —  unlike in common law jurisdictions like Singapore or Australia where (former) judges play more active roles in promoting arbitration generally. JCAA and TOMAC did amend their Rules around the time of the 2003 Act and subsequently from time to time. However, they continued to mostly administer cases involving at least one Japanese party, without marketing their centres aggressively to see large increases in caseloads.[17]

Since 2018, nonetheless, we have witnessed an elevated political push for Japan to catch up with international competitors and become more of an international dispute resolution hub regionally. Along with the Japan International Mediation Centre (JIMC) Kyoto (an earlier academic / law society joint venture), the Japan International Dispute Resolution Centre (JIDRC) was established with government-supported facilities in Osaka and then Tokyo, with quite intense marketing despite the pandemic. A new Tokyo-based institution, International Arbitration Centre in Tokyo (IACT), focuses on intellectual property arbitration. These governmental initiatives prompted JCAA to enact three sets of new Rules from 2019. Amendments to allow more foreign law representation in foreign-related arbitrations seated in Japan.[18] Moreover, formal consultation was launched in 2020, albeit belatedly by Asia-Pacific standards, to revise the 2003 Arbitration Act along more of the lines of the 2006 UNCITRAL Model Law amendments especially on tribunal-issued interim measures.[19]  This is important especially for marketing Japan as a seat, although the 2003 Act had already anticipated a few provisions on interim measures that were being discussed in UNCITRAL and incorporated into their 2006 Model Law amendments.[20]

Those new public and private initiatives should help further reduce structural barriers to arbitrating in Japan, but it is still unlikely that arbitration will ever become popular for domestic dispute resolution. Moreover, it is too early to tell whether these efforts will make Japan a significantly more popular seat for international arbitrations.


[1] Yasuhei Taniguchi, ‘The 1996 Code of Civil Procedure of Japan-A Procedure for the Coming Century?’ (1997) 45 The American Journal of Comparative Law 767.

[2] Translated at https://japan.kantei.go.jp/policy/sihou/singikai/990612_e.html; Luke Nottage, ‘Civil Procedure Reforms in Japan: The Latest Round’ (2005) 22 Ritsumeikan Law Review 81,  available at SSRN: https://ssrn.com/abstract=837864.

[3] Masaki Abe and Luke Nottage, ‘Japanese Law’ in Jan Smits (ed), Elgar Encyclopedia of Comparative Law (3rd edn, Edward Elgar Publishing 2022), available at SSRN: https://ssrn.com/abstract=3672112 or http://dx.doi.org/10.2139/ssrn.3672112 .

[4] Andrew M. Pardieck, ‘Discovery in Japan’ (2021) 31 Indiana International & Comparative Law Review 61.

[5] See generally eg Shusuke Kakiuchi, ‘Access to justice in Japan’ (2007) Japanese Law Resources <http://www.asianlii.org/jp/other/JPLRes/2007/1.html> .

[6] Dimitri Vanoverbeke, Community and State in the Japanese Farm Village: Farm Tenancy Conciliation, 1924-1938 (Leuven University Press 2004). “

[7] Yasunobu Sato, Commercial Dispute Processing and Japan (Kluwer Academic Publishing 2001); Harald Baum, ‘Mediation in Japan. Development, Forms, Regulation and Practice of Out-of-Court Dispute Resolution’ in Klaus J. Hopt and Felix Steffek (eds), Mediation: Principles and Regulation in Comparative Perspective (Oxford University Press 2012).

[8] Mark D. West, ‘The Resolution of Karaoke Disputes: The Calculus of Institutions and Social Capital’ (2002) 28 The Journal of Japanese Studies 301 (demonstrating the success of the Internal Affairs Ministry’s Pollution Complaint Counsellor in dealing with noise complaints); Shiro Kawashima, ‘A Survey of Environmental Law and Policy in Japan’ (1994) 20 North Carolina Journal of International Law and Commercial Regulation 231; Luke Nottage, ‘The Cultural (Re)Turn in Japanese Law Studies’ (2009) 39 Victoria University of Wellington Law Review 755.

[9] Tomohiko Maeda and Andrew M. Pardieck, ‘ADR In Japan’s Financial Markets & the Rule of Law’ (2018) 10 Northeastern University Law Review 400.

[10] Luke Nottage and Yoshitaka Wada, ‘Japan’s New Product Liability ADR Centers: Bureaucratic, Industry, or Consumer Informalism?’ (1998) 3 Journal of Japanese Law 40.

[11] Aya Yamada, ‘ADR in Japan: Does The New Law Liberalize ADR From Historical Shackles or Legalize It?’ (2009) 2 Contemporary Asia Arbitration Journal 1.

[12] As of 9 April 2022, there are 163 certified organisations: Ministry of Justice, ‘The List of Certified ADR Providers [in Japanese]’ (n.d.)  <https://www.moj.go.jp/KANBOU/ADR/jigyousya/ninsyou-index.html> accessed 9 April 2022.

[13] James Claxton, Luke Nottage and Nobumichi Teramura, ‘Disruption as a Catalyst for International Dispute Services in Japan: No Longer Business as Usual?’ in Luke Nottage and others (eds), New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (Wolters Kluwer 2021).

[14] Tatsuya Nakamura and Luke Nottage, ‘Arbitration in Japan’ in Shahla F. Ali and Tom Ginsburg (eds), International Commercial Arbitration in Asia (3rd edn, Juris 2013).

[15] Luke Nottage, International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts (Edward Elgar Publishing 2021), Chapter 4.

[16] Yasuhei Taniguchi and Tatsuya Nakamura, National Report for Japan (2019 through 2022), in Lise Bosman (ed), ICCA International Handbook on Commercial Arbitration (ICCA & Kluwer Law International 2020, Supplement No. 120, February 2022) at 36-39.

[17] Nobumichi Teramura and Luke Nottage, ‘Arbitration Reform in Japan: Reluctant Legislature and Institutional Challenges’ in Weixia Gu and Anselmo Reyes (eds), Arbitration Reform in Asia (Hart Publishing 2018).

[18] Junya Naito and Ryo Otobe, ‘The Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers —Recent Developments toward Internationalization’ (2020) 1 Japan Commercial Arbitration Journal 34.

[19] WeiJian Teo and Yusuke Iwata, ‘The Rise of Japan Arbitration: A Balance to the Common Law Forces of International Arbitration in Asia?’, (Kluwer Arbitration Blog, 6 July 2021) <http://arbitrationblog.kluwerarbitration.com/2021/07/06/the-rise-of-japan-arbitration-a-balance-to-the-common-law-forces-of-international-arbitration-in-asia/>.

[20] James Claxton, Luke Nottage and Nobumichi Teramura, ‘Developing Japan as a Regional Hub for International Dispute Resolution: Dream Come True or Daydream?’ (2019) 47 Journal of Japanese Law 109.

“Declining Professional Diversity in International Arbitration”

By: Dr Nobumichi Teramura (Assistant Professor, Universiti Brunei Darussalam; Affiliate, Centre for Asian and Pacific Law at the University of Sydney), Dr Luke Nottage (Professor of Law, University of Sydney; Special Counsel, Williams Trade Law) and Mr James Tanna (Research Assistant, University of Sydney)[1]

[Update: a version of this posting was published by Kluwer Arbitration Blog on 3 April 2022, associated presentations were then made eg at the ASLI conference in Tokyo and Lawasia conference in Sydney in 2022, and our chapter on which it is based has now been published in Shahla Ali et al (eds) Diversity in International Arbitration (Elgar, 2022)]

On 20 June 2016, the Australian Centre for International Arbitration (ACICA) signed the Equal Representation in Arbitration Pledge, to improve the profile and representation of women in arbitration.[2] Since then, we have witnessed the international arbitration (IA) community’s significant collective progress towards greater diversity, especially over the last few years. These initiatives include Racial Equality for Arbitration Lawyers (REAL), the Rising Arbitrators Initiative (RAI) and the appointment of first woman President of the ICC International Court of Arbitration. We should certainly celebrate this advancement of equality in race, age and gender, although the main beneficiaries of the diminishing gender gap are reportedly white women based in Europe or North America.[3]

In addition, we should be aware that the burgeoning debate seems to leave out discussion of a further area where diversity is lacking in the IA community – an analysis of professional diversity. While the key groups and publication outlets for IA are dominated nowadays by those practising primarily as full-time lawyers, there is hardly any awareness or sustained discussion about the limitations of overlooking diversity of professional backgrounds, perhaps partly because arbitration rules usually do not require arbitrators to have any specific experience, training or qualifications. Nonetheless, for example, the ACICA Guidance Note on the Appointment of Arbitrators prompts parties to consider ‘diversity and issues of equal representation, such as gender, age, geography, culture, ethnicity, and professional background of the arbitrator’.[4]

Involving more non-lawyer practitioners (NLPs, such as engineers, architects, accountants) or those who are primarily academics could significantly reduce the persistent formalisation in IA.[5] Expanding professional diversity could also lead to other benefits, including indeed more gender diversity, given that academia does not have the same non-linear remuneration structures for lawyers that disadvantage career progression for many women.[6] These and other issues associated with professional diversity are outlined in our recent research article entitled “Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity”.[7] That research article also empirically analyses the ways legal practitioners have come to prevail across the key nodes of influence within the IA sector. The rest of this blog post introduces our key empirical findings.[8]

Associations and Institutions Promoting Arbitration

First, we examined key groups that promote IA but do not themselves administer arbitration cases. The influential groups examined were the International Council for Commercial Arbitration (ICCA), the Chartered Institute of Arbitrators (CIArb) and the International Bar Association (IBA).

The ICCA Board as of September 2021 largely comprised individuals falling primarily in the category of practising “Lawyer” (84%), executives of “International or Arbitral Organisations” (IAOs, typically leaders within arbitral institutions) (5%), “Mixed” (typically those having multiple professional engagements) (5%) and “Academic” (4%, essentially full-time). We also examined the composition of ICCA Taskforces for all years: Lawyer (61%), IAOs (18%), lawyers and NLPs working in Litigation Finance (7%), Mixed (7%) and Academic (6%). Authors of entries in the Young ICCA Blog between 19 October 2010 and 17 February 2021 fell into the categories of Lawyer (86%), Academic (10%) and Mixed (2%). Analysis of presentations in ICCA Congresses and related chapters in the ICCA Congress Series over the last 30 years also indicated the growing prevalence of Lawyers (60% over the entire period) within ICCA publications, and in parallel reflecting only small proportions of IAOs (14%), Academic (12%) and Mixed (9%).

The lack of diversity in professional backgrounds was also salient in the other groups. For example, the vast majority of CIArb Board Members in 2021 were from the Lawyer category (78%), in contrast to NLPs making up 15% of the Board (despite the earlier influence of NLPs in CIArb until around the 1990s) and no members falling into the Academic category. Speakers in CIArb Webinars from July 2020 to March 2021 comprised Lawyers (75%), Academic (12%), NLPs (9%) and IAOs (2%).

Meanwhile, the data is comparable at the IBA. As for the committee membership for proliferating IBA instruments, such as the Evidence-Taking Rules, there was an even heavier prevalence of Lawyers (95%) although this was less surprising given that the IBA is essentially a global federation of lawyers’ associations. Similarly, for IBA webinars, mostly from 2020 but also some from 2021, 94% of the key participants were Lawyer; only 4% could be coded as IAOs, while 2% were Academic.

Arbitration Institutions and Their Leaders

Next, we analysed the international and regional arbitration institutions having high caseloads and/or those deemed reasonably representative of civil or common law traditions and geographical diversity. These were ACICA, the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), the Swiss Arbitration Centre, the International Centre for Dispute Resolution (ICDR), the Singapore International Arbitration Centre (SIAC), the Hong Kong International Arbitration Centre (HKAIC), the China International Economic and Trade Arbitration Commission (CIETAC), the Asian International Arbitration Centre (AIAC), the Japan Commercial Arbitration Association (JCAA), the Korean Commercial Arbitration Board (KCAB), the Thai Arbitration Institute (TAI) and the newer Thai Arbitration Centre (THAC).

To discern professional diversity within the leadership of these arbitration centres, we looked overall at the membership of various Boards, Councils, Committees, Taskforces and Courts as of 2021. The combined analysis confirmed Lawyers’ predominance (76%), as well as the comparatively small ratios of NLPs (11%), Academics (6%) and IAOs (1%).[9] We further investigated speakers and moderators at webinars and conferences organised by those arbitration centres in 2020 and the first half of 2021: Lawyers (80% in 2020 and 83% in 2021), IAOs (8% and 4% respectively), Academics (5% and 6%) and NLPs (4% and 5%).   

Indicative Journals, Books and Blogs

We also considered major journals for international arbitration, complementing an earlier analysis of periodicals and other publications.[10] These were Arbitration International (associated with the LCIA), Arbitration: The International Journal of Arbitration, Mediation and Dispute Management (CIArb), Asian International Arbitration Journal (SIAC) and the Journal of International Arbitration (published by Wolters Kluwer). Again, the overall extent of Lawyer involvement was striking. Editors of these four journals as of September 2021 were mostly Lawyer (75%), although there were somewhat more Academic (22%) than say for the leadership of the arbitration institutions as examined above. Then, we examined all the discernible articles (other than book reviews) published in the four journals from the late 1980s, when three were being published and some debate emerged about the role of NLPs in arbitration.[11] Sampling the journals essentially at five-yearly intervals (in 1989, 1994, 1999, 2004, 2009, 2014 and 2019-21) gave the following proportions for authors: Lawyer (71%), Academic (19%), IAOs (2%), NLPs (4%) and Mixed (3%). Analysing authorship categories over time found that absolute numbers and proportions of articles written by Lawyers had grown, especially over 2000-2010.

We further studied editors and authors of influential books and blogs. For books, for example, we investigated the International Arbitration Law Library Series published by Wolters Kluwer, with 59 titles since 1993 when the first volume of the Series was published. Coding editors and authors of these volumes and individual chapters demonstrated the dominance of Lawyer (50%) although a significant minority were from Academic (39%). Other professions such as IAOs, NLPs and Mixed occupied relatively small proportions (3%, 2% and 6%, respectively). On blogs, our analysis concentrated on Kluwer Arbitration Blog (KAB), as one of the most well established and widely read arbitration-related blogs. Comparing the KAB’s editorial team for August 2021 and 2018 (the latest year for which the Wayback Machine online allowed us to access a snapshot of the list of all editors), 80% were Lawyers and 20% were Academics. In addition, we studied backgrounds of blog authors in February, June and November in 2009, 2014 and 2019-21. The sampling found a similar prevalence of postings by Lawyer (79%), some by Academic (16%) and very occasionally by authors from an IAO (2%).

Concluding Remarks

The phenomena confirmed by our empirical research are clear: the entrenchment of lawyers through the world of IA, and the corresponding decline in involvement and influence of full-time academics and especially other NLPs. This growing lack of diversity in professional backgrounds contrasts with gender diversity, which has experienced some statistical improvements in appointments of arbitrators or other leadership positions in some arbitration centres.[12] One response to that ongoing “diversity deficit” might be to encourage more involvement of academics and NLPs in the leadership and activities of the significant arbitration associations and centres, as well as leading publication venues.[13] Such a response will help the IA sector develop diversity of perspectives because, as Joshua Karton suggests, such diversity may be enhanced by arbitrators with varied experiences who may think differently from the arbitration mainstream.[14] At least, we need more discussion and ongoing debate about the remarkable and continuing decline in professional diversity within IA.


[1] This article is a version of Nobumichi Teramura, Luke Nottage and James Tanna, ‘Declining Professional Diversity in International Arbitration’, Kluwer Arbitration Blog (Blog Post, 3 April 2022) <http://arbitrationblog.kluwerarbitration.com/2022/04/03/declining-professional-diversity-in-international-arbitration/>,

[2] ACICA, ‘Media Release: Australian Centre for International Commercial Arbitration Signs Equal Representation in Arbitration Pledge’ (20 June 2016) <https://acica.org.au/wp-content/uploads/2016/06/Media-Release-Equal-Representation-in-Arbitration-Pledge.pdf>.

[3] Kiran Nasir Gore, ‘2021 In Review: Continued Strides in Favor of Diversity and Sustainable Development in International Arbitration’, Kluwer Arbitration Blog (Blog Post, 27 February 2022) < http://arbitrationblog.kluwerarbitration.com/2022/02/27/2021-in-review-continued-strides-in-favor-of-diversity-and-sustainable-development-in-international-arbitration/>.

[4] See <https://acica.org.au/wp-content/uploads/2022/01/ACICA-Guidance-Note-on-the-Appointment-of-Arbitrators-FF1.pdf> (emphasis added), available via <https://acica.org.au/acica-practice-procedures-toolkit/>.

[5] Nobumichi Teramura, Ex Aequo et Bono as a Response to the ‘Over-Judicialisation’ of International Commercial Arbitration (Wolters Kluwer, 2020).

[6] Claudia Goldin, Career and Family: Women’s Century-Long Journey toward Equity (Princeton University Press, 2021).

[7] Luke Nottage, Nobumichi Teramura and James Tanna, ‘Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity’ (September 2021) manuscript at <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3926914>. A shorter version of that paper is also forthcoming in Shahla Ali, Filip Balcerzak, Giorgio Fabio Colombo and Joshua Karton (eds), Diversity in International Arbitration: Why It Matters and How to Sustain It (Elgar, 2022).

[8] As elaborated in the research article, including the methodological Appendix, we basically categorised all individuals in accordance with their primary profession at the time they were a member of the relevant arbitral organisation, the relevant publication was written, or the relevant presentation was given.

[9] The proportion for ACICA was higher in 2021: see Luke Nottage, Nobumichi Teramura and James Tanna, ‘Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity’ (n 7) 24. Tracking its Board size and composition over time, see also Luke Nottage and Richard Garnett, “The Australian Centre for International Commercial Arbitration” in Helene Ruiz Fabri (gen ed) Max Planck Encyclopedia of International Procedural Law(Oxford University Press, 2019) via https://www.mpi.lu/mpeipro/.

[10] Luke Nottage, ‘International Arbitration and Society at Large’ in Andrea Bjorklund, Franco Ferrari and Stefan Kroll (eds), Cambridge Compendium of International Commercial and Investment Arbitration (Cambridge University Press, forthcoming 2022), manuscript at <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3116528>.

[11] The Asian International Arbitration Journal was published from 2005.

[12] ICCA, Report of the Cross-Institutional Task Force on Gender Diversity in Arbitral Appointments and Proceedings (The ICCA Reports No 8, 2020).

[13] Andrea K Bjorklund et al, ‘The Diversity Deficit in International Investment Arbitration’ (2020) 21(2-3) The Journal of World Investment & Trade 410.

[14] Joshua Karton, ‘Diversity in Four Dimensions: Conceptualizing Diversity in International Arbitration’ (March 2022) <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4054031>.