Publications and Webinars on Asia-Pacific arbitration and ISDS

On 23 March 2022 Kyoto University awarded Luke Nottage an LLD by publications for his book of selected/updated and some new essays on International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts (Elgar, 2021). In addition, a Transnational Dispute Management report of (Young-OGEMID listserv) Q&A about the book was published in February 2022.

On 2 March 2022 Prof Luke Nottage joined Dr Michael Hwang SC (Singapore), Neil Kaplan CBE QC SBS (Hong Kong), Hafez Virjee (Paris) for a public webinar entitled “Between Theory and Practice”, discussing the development of international arbitration particularly in the Asia-Pacific region and the place of Australian practitioners in this global market: watch the recording here. The webinar also discussed the benefits of pursuing international arbitration as an elective course, in the context of the large range of international arbitration materials made available to Sydney Law School students and staff through the Delos Dispute Resolution platform thanks to a subscription donated by Dr Hwang.

On 25 February Luke Nottage was interviewed for a podcast recording by a Bosnia-based association for arbitration, discussing the hot topic of transparency vs confidentiality particular in investor-state dispute resolution. Below is the outline of key points discussed.

In addition, Luke Nottage spoke on ISDS and investment treaties at the UoW Transnational Law and Policy Centre‘s co-hosted symposium on topics being negotiated in the Australia-India FTA (recording here), focusing on mandatory mediation before investors arbitrate disputes, and was then invited to speak on ISDS reform more generally for a symposium hosted by the Indian government’s Centre for Trade and Investment Law.

Some of Luke Nottage’s related recent publications include an overview chapter for a new book on the Asian Turn in Foreign Investment, an econometric analysis of ISDS-backed treaties on FDI flows, international arbitration and society at large (in the new Cambridge Compendium), professional diversity in international arbitration, and a review forthcoming in the Australian Law Journal of a new book on International and Australian Commercial Arbitration.

* * *

25 February 2022 webinar on Transparency in ISDS:

  • Pros and cons of transparency in international arbitration generally?
    • Fewer costs and delays in procedures and award-writing if procedure limited to the parties/counsel and arbitrators, not wider public
    • vs leads to more info asymetries in this market for services (arbitrators, especially lawyers, even expert witnesses) hence potential costs and delays: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2987674
    • If diminishing net cost savings, even in intl commercial arbitration, less attractive balance from rule of law perspective, undermining legitimacy of international arbitration compared to (more public) litigation – see (Menon CJ article, quoted in my JoIA article on ACICA Rules 2021 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3931086: incidentally, those don’t relax confidentiality but do require disclosure of third-party funders)
    • Especially in investor-state arbitration, given its inherent greater public interests, and growing media attention (and polarisation)
  • Current regime:
    • Already considerable (surprising) transparency in ISA re awards (2/3): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3227401 **
    • ICC Rules (mostly an ICA org, occasionally ISA): no confidentiality imposed on parties
    • ICSID Convention / Rules (2/3 of ISA cases): likewise, but eg „shall promptly“ publish „excerpts of legal reasoning“ in awards, need consent of parties for full award (or leak!)
    • Ad hoc arb UNCITRAL Rules (eg 2010): likewise, can publish awards if parties consent, arbitrator discretion re other transparency (eg Philip Morris v Australia procedural order)
      • Revised 2013 for transparency in all treaty-based arbs, then 2014 Mauritius Convention to extend transparency to pre-2014 treaties (whether UNCITRAL or other Rules)
  • The recent amendments of investment arbitration rules (most notably ICSID) and dispute resolution clauses in IIAs [eg] to allow third-party submissions.
    •  ICSID already in 2006 had amended its Rules for Convention and AF cases to somewhat expand confidentiality – https://icsid.worldbank.org/resources/rules-and-regulations/amendments/about
    • Recently decided further ICSID Rules revisions (since late 2016) align AF Rules (which also now can be adopted even without any party being member of the ICSID Convention) with expansive transparency across all stages as in UNCITRAL Rules; plus for ICSID (Convention states) Arb Rules eg at https://icsid.worldbank.org/resources/rules-amendments
      • [Proposed Rule 62] Automatic publication of award if 60 days pass and no objection lodged by a party (cf earlier debate that such „deemed consent“ too incompatible with Convention, which would need to be then amended but too many member states!)
      • [Rule 63] Publish excerpts of legal reasoning re decisions other than awards, eg on jurisdiction (eg recently under Australia-Egypt BIT: do treaties providing that a host state „shall“ consent to ISA provide advance consent to that procedure? Earlier see my https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2424987)
      • [Rule 64] publish other docs lodged (eg party submission) also if agreed by parties or tribunal discretion / weighing
      • [Rule 65] shall allow non-parties to attend hearings (and publish transcript or recording) unless a party objects
      • [Rule 66] but subject to redaction etc for „confidential information“ (listed types below)
      • [Rule 67] expanded provisions so tribunals MAY allow submissions etc by „non-disputing parties“ eg amicus curiae – text below bolded
      • [Rule 68] provisions so tribunals SHALL allow „non-disputing treaty parties“
  • Tension between the transparency concerns expressed by the States in the context of ISDS and the lack of actual application of the transparency rules in practice. 
    • Yet only 9 ratifications of Mauritius Convention, few of the big players (eg Canada 2016, Switzerland 2017, Australia 2020 alongside review of old BITs – but no public report!): lose control / treaty negotiating leverage? Prefer incorporating tailored regime in treaties, anyway need to do so (Rules options provided, and/or amendments) for post-2014 treaties as Mauritius Convention doesn’t apply to those
    • Some host states have been reticent about too much transparency, including in treaty (re)drafting or UNCITRAL reform deliberations: exposes their (even alleged) poor governance (hence many investors favour transparency, potentially even encouraging settlement: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2065636), impede settlement (only partly empirically justified? ** and see further Ubilava at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3352181), more costs and delays (arguments over exceptions to transparency: Prof Zachary Douglas at https://www.claytonutz.com/ialecture/previous-lectures/2020)
  • Impact of legal tradition and culture on the approach to transparency in ISDS?
    • Less determined by say civil vs common law tradition, more eg socialist law / governance (eg Vietnam etc haven’t even ratified ICSID Convention, Chinese treatise were slow to incorporate much transparency) or developing country status (eg India?)
    • Culture might have some (small) impact: surveys etc show Eastern parties / counsel see confidentiality as advantage over litigation compared to Western, more generally think of eg https://en.wikipedia.org/wiki/The_Farewell_(2019_film) ?
  • Possible solutions to the improvement of transparency, while maintaining the benefits of confidentiality that the parties desire
    • States party should try to agree in treaties in advance
    • or during proceedings (but then host state and investor, and often acrimonious generally)
    • Otherwise, tribunals and counsel need to be aware of the competing interests, pros and cons of transparency (especially for costs and delays) as discussed above, when weighing whether and how to allow disclosures.

New ICSID (Convention) Arbitration Rule 66

Confidential or Protected Information

For the purposes of Rules 62-65, confidential or protected information is information

which is protected from public disclosure:

(a) by the instrument of consent to arbitration;

(b) by the applicable law or applicable rules;

(c) in the case of information of a State party to the dispute, by the law of that State;

(d) in accordance with the orders and decisions of the Tribunal;

(e) by agreement of the parties;

(f) because it constitutes confidential business information or protected personal

information;

(g) because public disclosure would impede law enforcement;

(h) because a State party to the dispute considers that public disclosure would be

contrary to its essential security interests;

(i) because public disclosure would aggravate the dispute between the parties; or

(j) because public disclosure would undermine the integrity of the arbitral process.

Rule 67

Submission of Non-Disputing Parties

(1) Any person or entity that is not a party to the dispute (“non-disputing party”) may

apply for permission to file a written submission in the proceeding. The application

shall be made in the procedural language(s) used in the proceeding.

(2) In determining whether to permit a non-disputing party submission, the Tribunal

shall consider all relevant circumstances, including:

(a) whether the submission would address a matter within the scope of the dispute;

(b) how the submission would assist the Tribunal to determine a factual or legal

issue related to the proceeding by bringing a perspective, particular knowledge

or insight that is different from that of the parties;

(c) whether the non-disputing party has a significant interest in the proceeding;

(d) the identity, activities, organization and ownership of the non-disputing party,

including any direct or indirect affiliation between the non-disputing party, a

party or a non-disputing Treaty Party; and

(e) whether any person or entity will provide the non-disputing party with financial

or other assistance to file the submission.

(3) The parties shall have the right to make observations on whether a non-disputing

party should be permitted to file a written submission in the proceeding and on any

conditions for filing such a submission.

(4) The Tribunal shall ensure that non-disputing party participation does not disrupt the

proceeding or unduly burden or unfairly prejudice either party. To this end, the

Tribunal may impose conditions on the non-disputing party, including with respect

to the format, length, scope or publication of the written submission and the time

limit to file the submission.

(5) The Tribunal shall issue a reasoned decision on whether to permit a non-disputing

party submission within 30 days after the last written submission on the application.

(6) The Tribunal shall provide the non-disputing party with relevant documents filed in

the proceeding, unless either party objects.

(7) If the Tribunal permits a non-disputing party to file a written submission, the parties

shall have the right to make observations on the submission.

** “… around 85% of cases where either the investor or the state have won are fully Public, and almost all the rest are only Partly Confidential. For settled cases, as italicised, 41% are Public or Partly Confidential.  This suggests that minimising costs and delays through early settlement may often be facilitated by keeping the outcome at least partly private, but not necessarily in all situations.”

“International and Australian Commercial Arbitration” – Book Review

[Update: this review was published in 96 Australian Law Journal 369-71 (2022).]

This [new book analysing a field also important to Japan and other Asia-Pacific jurisdictions (LexisNexis, 2022, xii +735pp: ISBN 9780409353075, Paperback $185.)] is an authoritative and comprehensive 640-page commentary on both international and domestic arbitration law in Australia, from two eminent former full-time judges (Clyde Croft and Marilyn Warren) and one early-career academic (Drossos Stamboulakis) all now affiliated with Monash University. It is supplemented first by the text of the International Arbitration Act (IAA)and its first two Schedules, the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (NYC) and the 2006 revised United Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (ML). The book also adds the text of the UNCITRAL Arbitration Rules, devised for ad hoc arbitrations but also forming the core of some institutional arbitration rules, as for the Australian Centre for International Commercial Arbitration,[1] whose first edition Rules Croft helped draft (before judicial appointment) drawing on his detailed knowledge of the UNCITRAL Rules.[2] Although these international instruments and legislation are freely available online, it is helpful to have their text appended in this volume, although it must add somewhat to the cost of the paperback or hardback versions.

The volume fills a significant gap in the literature on the comparatively small but lively field of arbitration in Australia. On the last page, as “related LexisNexis titles”, the publisher lists the commentary by Croft and others focused on domestic arbitration,[3] and another by Malcolm Holmes and Chester Brown on the IAA.[4] The present volume is more discursive and principles-based, rather than a section-by-section commentary, and covers domestic and international arbitration in Australia – both centred on the ML regime since 2010. There also exists an edited collection of essays on various aspects of international arbitration law and practice in Australia, including two chapters co-authored by Croft.[5] However, those analyses date back to 2010 (when the most significant amendments were made to the IAA) and include some more normative material (such as suggestions for further reform to legislation and arbitration rules). A more recent new book of selected (mostly updated) essays examines Australia but also compares developments particularly in Japan.[6] That also includes an analysis of investment treaty arbitration, a hybrid field of growing importance in Australia and worldwide, but not covered in the volume presently under review.[7] In short, this important new volume should fill a gap on the bookshelves (or eBook readers) of all those interested in domestic and international commercial arbitration in Australia.

It will be useful for practitioners seeking a clear overview of key principles enacted and applied by courts particularly in the Australian context, as well as university teachers and students of international commercial arbitration. The volume is written in a somewhat hybrid style. Although it is primarily a textbook, it includes sometimes quite lengthy extracts from judgments, making the volume also somewhat like “cases and materials”. These extracts are mainly from Australian case law (sometimes generated by two of the three authors when still serving on the Supreme Court of Victoria, particularly by Croft as he was charged with its Arbitration List), but also from case law particularly in Singapore and Hong Kong. That is very appropriate given the ML core and wider common law tradition shared with both those jurisdictions, and hence their influence on case law and some legislative reform in Australia.[8] Those jurisdictions also attract many more international arbitrations, hence court challenges generating case law on topics that Australian courts have not yet had to canvas or in as much detail. However, the present authors also refer to further crucial resources for correctly interpreting the international instruments and principles in contemporary arbitration. These include especially UNCITRAL documentation, including its Case Law Digest summarising key judgments worldwide, UNCITRAL’s Explanatory Note to ML (eg at pp 76-9).[9]

In coverage, after a Foreword by Robert French (former Chief Justice of the High Court of Australia), chapter 1 (pp 1-26) first introduces the “Nature of Arbitration and its Historical Development”. This includes its development in Europe, in England (including Derek Roebuck’s interesting argument that there was no less arbitration activity there in the 18th than early 20th century, undermining somewhat the view that English judges were quite wary and hence interventionist about arbitration from the 19th century), and in colonial Australia. The commentary then contrasts arbitration with other forms of dispute resolution (although the volume barely covers the hot topic of “Arb-Med” or arbitrators actively encouraging settlement), followed by the advantages and disadvantages of arbitration (highlighting advantages, but acknowledging the problem of cost – and, one might add, delays). Chapter 1 ends with a short analysis of “the bases of arbitral and judicial power”, emphasising the centrality of party agreement for arbitration as illustrated in a (quite lengthy) extract from High Court judgment unanimously rejecting a constitutional challenge to the ML regime for enforcing awards.[10] However, the commentary briefly mentions that “arbitral and judicial power may be affected by an exercise of the general sovereign power of the state, although such circumstances are exceptional” (p 26).[11]

Chapter 2 (pp 27-96) turns to the “Australian Approach to Arbitration”, tracking the evolution of arbitration statutes. This included the initiative from Queensland law reformers to update legislation in the early 1970s, prompted by the more pro-arbitration English Arbitration Act 1950, as it seemed “at this time that the Australian courts entertained suspicion, if not a dislike, of arbitration and treated it as an inferior jurisdiction that needed close supervision” (p 29). It was quite surprising to learn of this early intiative, at least for this reviewer immigrating to Australia from 2001, given that other State and federal legislators and courts have arguably been more influential in promoting arbitration in recent decades across Australia.[12] Generally, however, case law developments along with legislative enactments particularly since 2010 do indeed seem to have reduced inconsistencies and some possible “perception that Australian courts hindered effective commercial arbitration by being unduly interventionist in a number of ways” (p 92), not necessarily in accordance with the uniform approach to supporting arbitration promoted by the NYC and ML regimes.[13] Nonetheless, the commentary notes that “[c]ourt rules have tended not to keep pace with the legislative developments facilitating international and domestic arbitration in recent years” (p 93).

The remaining Chapters 3-11 cover the standard “life cycle” of a commercial arbitration filing, proceeding and award enforcement or challenge. Key principles, provisions and case law are clearly set out. Some of the longer extracts from judgments could benefit from paraphrasing or further contextualisation, and could mean that future editions of the book may be needed quite soon. Vexed issues in Australian arbitration law are almost all touched on, although sometimes without much detail or normative assessment of what the law should be. An example is the interaction with the Australian Consumer Law, impacting on many business-to-business transactions, which is gaining in importance for public policy (and hence potential challenge for arbitration agreements and especially awards) as law reformers now suggest adding pecuniary penalties for unfair contract terms and violating mandatory consumer guarantees.[14] In addition, keen readers may like to match up this book’s treatment of vexed issues with recent proposals for further law reform (underpinned by local or foreign case law, ML-based statutes and commentary),[15] assisted by the helpful index (pp 719-35) and Overview of sub-topics at the start of each chapter.

In sum, this book is very much recommended for practitioners, the academic community, and those considering amending rules and legislation around arbitration in Australia.


# Professor of Comparative and Transnational Business Law, University of Sydney Law School; Special Counsel, Williams Trade Law.

[1] Nottage, Luke R. and Dreosti, Julia and Tang, Robert, The ACICA Arbitration Rules 2021: Advancing Australia’s Pro-Arbitration Culture (September 26, 2021). Journal of International Arbitration, 38:6, 2021 (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3931086

[2] https://www.cambridge.org/core/books/guide-to-the-uncitral-arbitration-rules/DE8790A3707F69031D72729CF6885104

[3] https://store.lexisnexis.com.au/products/australian-commercial-arbitration-2nd-edition-skuaustralian_commercial_arbitration_2nd_edition

[4] https://store.lexisnexis.com.au/categories/practice-area/dispute-resolution-amp-civil-procedure-790/the-international-arbitration-act-1974-a-commentary-3rd-edition-sku9780409348132/details

[5] Chapters 5 (pp103-21) and 7 (pp 137-48) in Nottage and Garnett (eds) International Arbitration in Australia https://catalogue.nla.gov.au/Record/4975990 (Federation Press, 2010)

[6] https://japaneselaw.sydney.edu.au/2020/08/book-in-press-with-elgar/

[7] Compare also the introduction to the procedural and substantive law principles in investment treaties in a commentary by three Australian authors, https://www.booktopia.com.au/international-commercial-arbitration-simon-greenberg/book/9780521695701.html?source=pla&gclid=Cj0KCQiA9OiPBhCOARIsAI0y71CxTtzSq5mzZYT7CAGcHwJpXlNGUoO2smpLT_3rixw1uEDsMTCb3qUaAnvqEALw_wcB. A new edition of that book is forthcoming from Kluwer, along with national reports on key topics including eg Luke Nottage and Nathan Eastwood, International Commercial Arbitration: An Asia Pacific Perspective – 2021 Australia Report via https://www.wolterskluwer.com/en/solutions/kluwerarbitration

[8] Dean Lewis, ‘The Interpretation and Uniformity of the UNCITRAL Model Law on International Commercial Arbitration: Focusing on Australia, Hong Kong and Singapore’ (Kluwer Law International, 2016); Nottage, Luke R., Deference of Seat or Foreign Courts to International Commercial Arbitration Tribunals Concerning Procedural Issues: Australia in Regional and Global Contexts (January 21, 2022). Available at SSRN: https://ssrn.com/abstract=4013970

[9] With that Note extensively cited in the extract from Subway Systems Australia Pty Ltd v Ireland (2014) 46 VR at 52-6.

[10] TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at 566-8.

[11] Citing Minerology Pty Ltd v Western Australia [2021] HCA and Palmer v Western Australia [2021] HCA 31. These disputes involving State legislation nullifying commercial arbitration awards may lead to an international treaty arbitration claim: see Luke Nottage, https://theconversation.com/clive-palmer-versus-western-australia-he-could-survive-a-high-court-loss-if-his-company-is-found-to-be-foreign-145334

[12] For example, Queensland was the second-last jurisdiction in Australia to enact the new uniform Commercial Arbitration Act based instead on the ML (in 2013), and has had some case law on international arbitration attracting criticism from commentators and other courts: see eg Cargill International SA v Peabody Australia Mining Ltd [2010] NSWSC 887.

[13] For more detail on this transition, first in Hong Kong then Singapore, see also Lewis (n 8).

[14] See Treasury, “Strengthening protections against unfair contract terms” at <https://treasury.gov.au/consultation/c2021-201582> and “Improving consumer guarantees and supplier indemnification provisions under the Australian Consumer Law” at <https://treasury.gov.au/consultation/c2021-224294>.

[15] See eg Nottage (2021 Elgar = n 6) pp129-75, updating https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2393232; Monichino, Albert and Teramura, Nobumichi, New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country’ (December 2020). New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country,’ in Luke Nottage, Shahla Ali, Bruno Jetin and Nobumichi Teramura (eds), New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution. Wolters Kluwer (2020), Available at SSRN: https://ssrn.com/abstract=3946073

Asia-Pacific Online Legal Education Before and After the COVID-19 Pandemic

[Update: video recording on Youtube – click here.]

This 1 February 2022 noon-1.30pm (AEDT) webinar at Sydney Law School discusses how online (university or other) legal education interacts with each jurisdiction’s legal profession, university system, and ICT infrastructure, as well as how online legal education has developed both before and after the COVID-19 pandemic, across several Asia-Pacific jurisdictions: Australia, Japan, Canada, Brunei/Malaysia/Singapore, Macau and Hong Kong. It draws on draft National Reports for an International Academy of Comparative Law conference hosted over 23-28 October 2022 in Asuncion (Paraguay), comparing over 20 jurisdictions worldwide, for a volume to be published by Intersentia co-edited by Professors Luke Nottage and Makoto Ibusuki.

Find out more about the project, including links to several draft reports.

Speakers:
Registration – gratis:

Please click here to register online.

Please click here to register in-person. (There are limited places available to attend this event in-person.)

This event is hosted by the Centre for Asian and Pacific Law at Sydney Law School, Australian Network for Japanese Law (ANJeL) and the Transnational Law and Policy Centre at the University of Wollongong.

ANJeL Team Australia runners-up again in Tokyo moot competition!

The cross-institutional Team Australia has put in a great effort to come 2nd overall again at the 20th Intercollegiate Negotiation Competition held (remotely) “in” Tokyo. Pipped by the National University of Singapore, but ahead of the University of Tokyo. Well done also to Chulalongkorn University, where USydney also has close links, for coming fifth overall.

Congratulations to our law students Hasan Mohammad (who also won the ANJeL Akira Kawamura Prize for the Sydney Law School Japanese Law course last semester) and Sarah Tang (completing our International Commercial Arbitration course this semester)!

The teams from Japan and abroad hone and display skills in arbitrating disputes applying the UNIDROIT Principles of International Commercial Contracts, as well as negotiating and documenting a complex cross-border joint venture agreement. Team Australia won the Squire Patton Boggs prize for the best performance in the English-language round (also in 2018, when the Team came first), and won the ANJeL Prize for Teamwork (also won in 2019, when runners-up overall – as in 2020).

Terrific achievement given the extra stresses of lockdowns and other challenges for this year’s Team Australia students, mainly from USydney and ANU, as well as the difficult end-of-year timing. Unlike last year, Team Australia students were unable to meet in Canberra for a training weekend.

Many thanks for support from past mooters / graduates including our Stephen Ke, CAPLUS associate and former SLS RA / tutor Dr Nobumichi Teramura (now Assistant Professor at UBrunei), and especially coach and ANJeL advisor Prof Veronica Taylor from ANU. DFAT has also committed “New Colombo Plan” travel funding that we hope will become available next year so our students can compete in person in Tokyo.

More information can be found at https://www.teamaustralia-inc.net/ and https://www.negocom.jp/eng/.

Guest Blog: The Role of Independent Directors in Contemporary Asia

Written by: Joseph Black (CAPLUS law student intern, 2021)

On 26 October 2021 the Contemporary Asia International Forum Series coordinated a timely panel event entitled ‘The Role of Independent Directors in Contemporary Asia’. The panel was moderated by Dr Edith I Tzu Su, Associate Professor at the National Chung Hsing University in Taiwan, the host institution. The event was supported by the Centre for Asian and Pacific Law at the University of Sydney. Panelists were Dr Indraijt Dube, Professor of Intellectual Property Law at the Indian Institute of Technology Kharagpur; Dr Anil Hargovan, Associate Professor at the University of New South Wales; Dr Luke Nottage, Professor of Comparative and Transnational Business Law at the University of Sydney; and Dr Chun-Ren Chen, Professor at the National Cheng Kung University in Taiwan. We had the opportunity to explore key and original themes: the roles of independent directors in India; the roles of independent directors in Southeast Asia; and more. A few major questions reverberated throughout the session: are independent directors (although not executives or employees) de facto part of a wider managerial team; what are the implications of transplanting non-Asian laws and norms into Asian contexts (with a stronger blockholder tradition even in listed companies) and how are Asian companies distinguished from non-Asian companies? What made the webinar particularly interesting is that speakers had diverse insights and answers to these very topical and pressing questions.

After Dr Su commenced the session and introduced speakers, and Dean Chang Yen Li of the National Chung Hsing University delivered a cordial welcome, Dr Nottage commenced the discussion on corporate governance and independent directors, sketching the growth of sharemarkets in ASEAN and other parts of Asia, focusing on Malaysia and more briefly Cambodia. He proposed comparisons focusing on why and when independent director requirements are introduced, how this happens, what they are, and where they actually or potentially have impacts. Dr Nottage noted that Malaysia presents interesting data on independent directors given its peculiar history. Amid and after the Asian financial crisis in 1997, the World Bank and IMF encouraged (without requiring) changes and new corporate governance regulations in Malaysia. Notably, Malaysia was an early leader calling for independent directors (implementing requirements before Australia), but commentators have wondered wonders if this was ‘window dressing’ to lure back foreign investors (and regain foreign investors who had fled after the financial crisis). While they may have tried to introduce independent director requirements, it is critical to consider that there are always problems with legal transplants. Malaysia developed (like Thailand[1]) a three-tiered system of mandatory listing rules, ‘comply or explain’ Corporate Governance Code higher standards, and even higher independent director requirements that listed companies can voluntary disclose (but for which they do not need to explain non-compliance). A particular innovation – somewhat paralleling Indian corporate law reforms in 2013 – is is to require a two-tier vote (including a majority of the minority) for directors serving more than 12 years.

By contrast, Cambodia has a much newer and smaller sharemarket, with a less well-resourced regulator, so relies just on mandatory minimum standards. Those exclude from independent directors any individuals serving in competing firms, as in Thailand, perhaps reflecting the weakness of competition law and enforcement.[2] It will be interesting to observe how the country changes and independent director requirements start to be tightened in an effort to make them more functional. Following Dr Nottage, Dr Dube’s discussion largely focused on the role of independent directors in contemporary India. Dr Dube posed interesting questions – such as whether Indian corporate governance needs to be ‘Indianised’ – and explored the emergence of diverse laws in tandem with growing conceptualisations of independent directors in the Indian context. Dr Dube seemed to use a very interesting word – calibrating – to define continuity and change in this area in India in recent years. Dr Dube discussed the mandatory appointment of women independent directors; declaration of independence; auditing independence; the theory that independent directors played significant roles in raising market size, profitability, and sustainability; and evidence-based research finding a positive correlation between influences of independent directors and companies’ policies on health, safety, and environmental audits. Dr Dube noted the Tata Group Supreme Court case in 2016 (regarding the removal of then chairman Cyrus Mistry from office and later the company’s board) and implications (i.e., normalising independent directors in this context?).

Later, Dr Hargovan and Dr Chen posed as commenters and critically appraised Dr Nottage and Dr Dube. Dr Chen particularly analysed the concept of novel law on independent directors as window dressing to attract foreign investment, whether independent directors are supposed to serve as managers or a check against managers, tensions in boardrooms, incumbent directors refusing independent directors access to certain corporate data in Taiwan, seemingly inevitable conflicts between majority and minority shareholders, and implications of declaring independence (i.e., is it just a declaration?). Dr Hargovan referred to minority interests in family-dominated companies in Asia, independence from whom and for what (definitional issues), the perils of the legal transplant, optimal board composition (taking into account local conditions and cultures), characteristics of Asian companies (tangential to varieties of capitalism), the Kotak Committee Report in India (2017), and indicia of independence (interestingly similar between say Australia and India). Dr Hargovan noted that listed companies in Asia are more likely to be controlled by promoters than in Australia, where ownership is typically more diffused and the participation of institutional investors in corporate ownership follows a different pattern. Dr Hargovan closed by noting that the Anglo-Australian model is not guaranteed to be successfully transplanted to Asian countries; a lot depends on the economy and other factors, as illustrated by his recent article on Indian developments.[3]

Dr Nottage and Dr Dube closed with a few short words in response, although time was limited. To view the recording and for further Contemporary Asia International Forum Series events, please contact Dr Edith I Tzu Su at edithsu@nchu.edu.tw.

***

Joseph Black is a Juris Doctor student at the University of Sydney and anticipates commencing his Masters of International Law program from February 2022. Joseph is an intern with the CAPLUS and is interested in Japanese Law, Chinese Law, Indonesian Law, East Asian Studies, and other fields.


[1] Nottage, Luke R., Independent Directors and Corporate Governance in Thailand: A New Frontier (May 13, 2020). Journal of Transnational Law and Policy, 31 (Forthcoming, early 2022), Sydney Law School Research Paper No. 20/26, Available at SSRN: https://ssrn.com/abstract=3599705

[2] Nottage, Luke R., Fledgling Corporate Governance and Independent Directors in Cambodia’s Securities Market (November 14, 2019). Australian Journal of Corporate Law, 35, 2020, pp. 208-234, Sydney Law School Research Paper No. 19/60, Available at SSRN: https://ssrn.com/abstract=3459361

[3] Hanrahan P; Hargovan A, 2020, ‘Legislating the concept of the independent company director: Recent Indian reforms seen through Australian eyes’, Oxford University Commonwealth Law Journal, vol. 20, pp. 86 – 114, http://dx.doi.org/10.1080/14729342.2020.1773018

Japanese and Asia-Pacific Dispute Resolution events over October 2021

Over this month I am pleased to contribute to three events regarding Asia-Pacific arbitration and dispute resolution. On 1 October, I am moderating a session on International Commercial Arbitration in Japan and Germany, at the comparative ADR conference hosted by Institute of Japanese Law at the FernUniversität in Hagen to commemorate the 30th anniversary of its online courses in Japanese law. The speakers are well-known lawyers Ms Yoshimi Ohara (Nagashima Ohno & Tsumematsu) and Dr Christian Strasser (HEUKING KÜHN LÜER WOJTEK). Other sessions compare investment treaty arbitration as well as mediation.

On 20 October I present two classes in a new postgraduate law course on international commercial arbitration developed for the University of Chile by Santiago-based lawyer and former USydney LLM student Ricardo Vasquez Urra, which we hope will be offered annually. This too draws on my recently published book on international commercial and investor-state arbitration, and parallels my co-teaching (with barrister Dr Anna Kirk) the LLM course on international commercial arbitration at the University of Auckland late last year and in 2022.

On 2 October, I present the module on consumer redress and access to justice for a new postgraduate intensive course on consumer protection developed by the University of Malaya. I highlight law and policy developments mostly by comparing Australia, Japan and Southeast Asia, building on books including ASEAN Consumer Law Cooperation and Harmonisation (CUP 2019) and Contract Law in Japan (Wolters Kluwer 2019, 2nd ed 2022), as well as other recent publications including Studies in the Contract Laws of Asia (especially Volume III, all reviewed here for the Journal of Japanese Law). We explore some law and practice around courts and tribunals, Ombudsman and related arbitration-like processes, mediation, and other processes for consumer redress.

P.S. On 26 October I also present on “Corporate Governance and Independent Directors in Southeast Asia” (focusing on Thailand and somewhat Malaysia) for a webinar on the Role of Independent Directors in Contemporary Asia, part of the Contemporary Asia International Forum Series 2021 at National (National Chung Hsing University) hosted by Professor I-Tzu (Edith) Su.

P.P.S. This marks the 250th posting on this Japanese Law and the Asia-Pacific blog, over more than a decade. Many thanks to occasional guest bloggers and all readers!

Studies in the Contract Laws of Asia (Volumes I-III of VI)

My review essay [longer manuscript here on SSRN, shorter version forthcoming in Journal of Japanese Law (end-2021)] assesses the detailed, authoritative and thought-provoking first three of six proposed volumes in the series on “Studies in the Contract Laws of Asia” published by Oxford University Press. Lead-edited by Mindy Chen-Wishart, these excellent volumes span remedies for breach (2016), formation of contract and third-party beneficiaries (2018), and contents of contracts and unfair terms (2020, thus extending to an important area of consumer law). The respective editors argue quite compellingly for significant functional convergence even among Asian legal systems from quite divergent legal traditions. However, such convergence arguably becomes less obvious especially by the third volume. The functional analysis also focuses primarily on what decisions would be rendered by courts in stylised fact scenarios rather than whether and how such outcomes are reflected in contracting practices or law reform processes. Closer examination of these aspects may make future volumes even more valuable for researchers, practitioners and policy-makers.

Asia ADR Week 2021 session on roles of in-house counsel [& ‘errors of law in arbitration’]

[Updates: A. Also in August 2021, I chaired a presentation via Monash University on “Errors of Law in Arbitration – Revisited”, with a recording here. Dr Benjamin Hayward argued that a tribunal’s application of a substantive law different from that expressly chosen by the parties, or not applying the conflict of law provisions of the seat (and any chosen Rules) where such substantive law is not expressly chosen, could constitute an error of applicable procedure and thus a ground for challenging the consequent arbitral award.

B. My co-authored article on the new ACICA Rules (mentioned at 7 below), including comparative references to Japan and other Asian jurisdictions, is available in manuscript form: Nottage, Luke R. and Dreosti, Julia and Tang, Robert, The ACICA Arbitration Rules 2021: Advancing Australia’s Pro-Arbitration Culture (September 26, 2021). Journal of International Arbitration, 38:6, 2021 (Forthcoming), Available at SSRN: https://ssrn.com/abstract=3931086

C. My co-authored article empirically examining the “formalisation” of international arbitration, and the diminishing influence of non-lawyers (or even in-house counsel) across key nodes of influence, is available in manuscript here (and shortened for a forthcoming Elgar book co-edited by Shahla Ali, Giorgio Colombo et al on “Sustainable Diversity in International Arbitration”): Nottage, Luke R. and Teramura, Nobumichi and Tanna, James, Lawyers and Non-Lawyers in International Arbitration: Discovering Diminishing Diversity (September 20, 2021). Available at SSRN: https://ssrn.com/abstract=3926914]

As part of the “Asia ADR Week” of events for 2021, coordinated by the Asian International Arbitration Centre based in Kuala Lumpur, as session was scheduled for the first day of the main conference – Thursday 19 August 4-5pm AEST (2-3pm KL time) – on the topic of “Starting In-House: The Role of General Counsel of Multinational Corporations in ADR”. [A recording is available on request for my USydney students.] Agreed session contributors were myself as moderator and:

  1. Ms Debolina Partap (Wockhardt Limited, general counsel based in Mumbai)
  1. Ms Esther Chow (Kone Elavator (M) Sdn Bhd, general counsel based in KL)
  1. Mr Nick Longley (Holman Fenwick Willan, based in Melbourne; formerly in a law office in Hong Kong as well as in-house for four years with a Japanese civil engineering company and now significant engagement with Korean firms)
  1. Mr Cameron Ford (Squire Patton Boggs, based in Singapore, and formerly in-house for over a decade)
  2. Mr Raymond Goh (China Tourism Group Corp Ltd, Group general counsel – International, in Hong Kong / China).

The assigned description was: “The role of an in-house counsel in shifting the focal point on dispute resolution from the traditional standpoint of litigation to the innovative vigor of ADR has resulted in the majority of Fortune 1000 companies preferring to use ADR as a means of resolving both international and domestic disputes. This session focuses on the multi-faceted role of in-house counsel in spearheading ADR as a principal means of resolving disputes.” The focus therefore was on evolving in-house counsel perceptions around Asia regarding alternatives to litigation (arbitration, mediation, other Alternative Dispute Resolution) to resolve cross-border disputes. Part of the backdrop is resurgent delays and especially costs in international commercial arbitration despite its continued spread east from the traditional (European then US) venues.

The first part of the session asked some general questions focused on our panelists currently or having worked extensively as in-house counsel [Ms Chow, Ms Partap, Mr Goh, Mr Ford]:

1. How do or should in-house counsel teams nowadays decide generally whether to provide for and/or engage in arbitration, mediation, expert determination or other ADR rather than cross-border litigation?

2. Does or should the approach change if the disputes involve commercial and government parties?

The second part of the session posed some more specific questions:

3. The latest QMUL international arbitration survey (with more than usual Asia-Pacific respondents) confirms the continued popularity of multi-tiered DR clauses, which commit parties contractually to try eg mediation before arbitration (rather than having waiting for the dispute to arise, and then try to achieve agreement to try other ADR before proceeding to pre-agreed arbitration). Yet are such multi-tiered clauses equally negotiated and invoked among companies and legal advisors in the Asian region? See http://www.arbitration.qmul.ac.uk/research/2021-international-arbitration-survey/ [cf eg Japan, Korea (Mr Longley), Malaysia (Ms Chow)]

4. Especially in the region, are there difficulties in enforcing say the mediation step (as a jurisdictional requirement say before being able to proceed to arbitration), and issues in determining the law applicable to that question? Cf eg this US report / chapter for a book / project by Profs Gu and Reyes: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3601337, and recent case law in Hong Kong etc (https://pulse.kwm.com/hong-kong/multi-tiered-dispute-resolution-clauses-what-happens-if-you-dont-comply/) [Mr Longley]

5. What prospects are there for more establishment and use of dedicated centres for mediation, especially in the Asian region (eg already Singapore / SIMC, but also recently Japan / JIMC and Vietnam / VMC)? See eg https://www.jimc-kyoto.jp/. Would it be easier for in-house counsel to promote cross-border mediation if institutional, rather than ad hoc?

6. Why is the 2019 Singapore Mediation Convention, aimed at facilitating enforcement of settlement agreements along the lines of the NYC, attracting many signatures (but not eg from Japan or Australia) but few ratifications? See https://uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements/status. What have been experiences in enforcing settlement agreements cross-border in Asia even without this new Convention?

7. Is there declining interest and practice of Arb-Med across Asia (except perhaps in mainland China and to a lesser extent Japan), linked perhaps to more use of separate mediation as part of multi-tiered DR clauses, and/or a sense that Arb-Med is not “global practice” which arbitration institutions and practitioners feel increasingly required to follow? Cf ACICA (for which Mr Longley and I served on the Rules drafting committee) which decided not to proceed with an Arb-Med provision in its 2021 Rules, although modelled on legislative provisions for domestic arbitrations: http://arbitrationblog.kluwerarbitration.com/2021/05/01/is-arb-med-un-australian/ [Mr. Goh]

8. Are there already or likely to be changes towards more use of mediation (either separate, or in Arb-Med) due to the pandemic, or eg has the enforced move to remote hearings etc created enough time, cost and arbitrator availability benefits to maintain adequate attractiveness for international arbitration? Is the recent rise of Expert Determination in Australian domestic dispute resolution driven by arbitration costs and delays in arbitration and litigation, thus likely to carry over into cross-border dispute resolution and beyond the pandemic? [Mr Longley, compared with say Malaysia – Ms Chow, and experiences from Singapore – Mr Ford]

Australasian Consumer Law Roundtable: 1 December @ USydney

Sydney Law School, with support especially from its Ross Parsons Centre, is pleased to host this year’s Roundtable, in hybrid format on 1 December 2021, to discuss recent or emerging research and topics in consumer law and policy. In an informal interactive format, for the last fifteen years the Roundtables invite together experts in consumer law mainly from universities across Australia and New Zealand, but sometimes more widely including from Japan and other parts of Asia or even further afield, as well as some consumer regulators or peak NGO representatives. The event is open to other staff and HDR students from USydney, as the host, and any consumer law academics from Australian, NZ or Asian universities are also welcome to seek permission to attend by emailing luke.nottage@sydney.edu.au

Short presentations for discussion at this year’s Roundtable include the following [not necessarily in the order listed below]. Several involved recent or forthcoming publications that may be made available to the wider public already or after the event.

Samuel Becher (VUW)“Dark Contracts” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3911528)Firms design non-transparent consumer contracts. This article documents the multiple non-transparent contractual mechanisms and practices that firms employ in their consumer contracts. Specifically, it delineates how firms use non-transparent tools in almost every possible contractual juncture: from the contract’s nature, scope, and language to contract performance, dispute resolution, change, and termination. The article first documents this non-transparency. Thereafter, it argues that the sum of these non-transparent components is greater than its parts. The aggregated impact of these non-transparency practices undermines fundamental contract law notions and leaves consumers disinformed and disempowered. While firms have a profit incentive to employ non-transparent contracts, bounded ethicality makes it even more unlikely that firms fully realize the harmful consequences of their contracts. Against this backdrop, the article dubs these highly non-transparent consumer contracts “Dark Contracts.” To better tackle the problem of Dark Contracts, the article proposes introducing transparency-related instruments to the law of consumer contracts to tackle this thorny challenge. It further argues that policymakers should design such concepts to (1) allow better scrutiny over firms’ practices and (2) empower consumers to make better-informed decisions.
Jason Harris (Sydney Law School)“Liability for ACL Breaches Within Corporate Groups and Franchise Systems”An emerging issue in corporate law concerns contribution orders for underpaid workers whereby the court can deem several entities to be within a ‘contribution order group’ and make another company liable for the unpaid entitlements where they have received the benefit of the work. There are broader contribution order regimes (not just for employee entitlements) in NZ, Ireland and Germany. I wonder whether ACL compensation orders had given rise to problems with corporate groups (i.e. assetless shell companies misleading, while the parent company benefits) and whether accessorial liability under ACL s236 is sufficient to address this? In other words, could contribution orders within corporate groups (loosely defined to include franchise systems) benefit consumers and are they worth looking at? I’ve done a bit of work within corporate law looking at veil piercing doctrines, and there is at least 1 TPA case on making a parent co liable for misleading conduct that was argued on veil piercing grounds (which I argued should have been decided on accessorial liability under the TPA instead). 
Jeanne Huang (Sydney Law School)“The Latest Generation of SEZs: Consumer-Oriented Unilateralism in China’s E-commerce Trade” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3875223)WTO multilateralism is driven by manufacturers. However, in China, Cross-border E-commerce Retail Import (‘CERI’) has spurred a new, consumer-oriented trade unilateralism. CERI prospers within China’s National Cross-Border E-commerce Pilot Cities, which are Special Economic Zones aimed at using unilateral trade liberalization to meet consumers’ growing demands for high-quality foreign products. CERI enhances consumer benefits beyond reducing customer formalities and tax rates and lowering product prices. It re-conceptualizes consumer protection by treating consumers as diverse individuals rather than as a homothetic group. It also empowers consumers by making them ‘importers’ to minimize behind-the-border trade barriers. CERI warrants a rethinking of WTO multilateralism from its initial focus on corporations and capital owners to a revised focus on consumers.
Mary Keyes and Therese Wilson (Griffith U)“Protecting Consumers in International Disputes: Arbitration and Jurisdiction Agreements in Australian Law”The globalisation of markets for consumer goods and services means consumers regularly purchase goods and services from international suppliers.  These agreements typically stipulate that consumers must litigate or arbitrate, if a dispute arises, in the suppliers’ home jurisdiction.  As in other common law jurisdictions, in Australia there are no rules that deal specifically with the effect of arbitration and jurisdiction clauses in consumer contracts; their effect falls to be determined under the general principles that have been developed in the context of commercial transactions.  This article investigates the use of arbitration and jurisdiction agreements involving Australian consumers through an empirical study and evaluates the Australian laws which regulate these agreements.  It demonstrates that, while aspects of the current legal regime may have the capacity to protect consumers, such protections will not necessarily be applied. We review a number of recent cases that demonstrate this problem and suggest that changes to the Australian law are required to more explicitly protect consumers.  
Benjamin Hayward (Monash Business School)“‘Free Your Mind’: Using ‘The Matrix’ to Explain the Interaction Between the Australian Consumer Law and the CISG” For those of a certain age, the conflict between the characters Neo and Agent Smith depicted in ‘The Matrix’ trilogy of movies is well-known and is one of the great rivalries of cinema history.  What is not well-understood in the Australian legal context, including amongst lawyers who would be familiar with this Neo/Smith conflict, is the way in which the Australian Consumer Law interacts with the United Nations Convention on Contracts for the International Sale of Goods (the ‘CISG’). Though the CISG excludes consumer transactions from its scope, the fact that it defines those excluded transactions differently to the way in which the Australian Consumer Law defines consumer supplies provides scope for the CISG to displace the otherwise-mandatory ACL consumer guarantees.  Analogy with ‘The Matrix’ trilogy provides an excellent basis for explaining this interaction, and ensuring that its implications are understood by the legal profession. Young lawyers and law students are today provided more means than ever to acquaint themselves with the CISG, and to understand its place in Australian law.  Anecdotal evidence suggests that a knowledge gap still exists, however, amongst older lawyers – including those who may have grown up watching Neo and Smith’s conflict play out on the silver screen.  This presentation is directed at helping address this knowledge gap, and in turns, seeks to contribute to a better professional understanding of the interaction under analysis.
Victoria Stace (VUW)“Bills, bills, bills. What recent research has revealed about debt collection practices in New Zealand and how the law might respond” (Powerpoints here)Recent research conducted by Victoria University of Wellington has given insight into the experiences of debtors who find themselves facing debt collection. Financial mentors across the country, who see clients daily in unmanageable debt situations,  were asked questions around the conduct of debt collectors, the addition of fees and interest, and use of attachment orders. Particular issue emerged such as the use of intimidation, and use of attachment orders to benefits to collect old debts. This paper discusses the findings of that research and considers how the law can assist to improve standards of behaviour.
Vivien Chen (Monash Business School) with
Lucinda O’Brien, Ian Ramsay and Paul Ali
“An Impending “Avalanche”: Debt Collection and Consumer Harm After COVID-19” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3917247)Debt collection activity is expected to rise significantly in 2021, as financial hardship becomes more prevalent due to the economic impact of the COVID-19 pandemic. Consumer advocates have warned of an impending “avalanche in debt collection” and have called for better enforcement of laws designed to protect consumers from harassment as well as unfair, misleading and deceptive conduct by debt collectors. Women’s groups have also pointed to a rise in economic abuse, and resulting indebtedness, in the context of a general escalation in family violence during the pandemic. This article examines the legal framework governing the Australian debt collection industry. Drawing on recent case law and a series of focus groups conducted by the authors, it outlines law reform and enforcement measures that would better protect consumers from harmful debt collection practices. These include specific measures to address the financial, social and psychological impacts of family violence and economic abuse
Sagi Peari (UWA)“Consumer Protection Law, Judge Made Law and the Concept of Coherence: Can They Co-Exist?”Consumer protection law intervenes into the traditional doctrines, principles and concepts of the backbone categories of private law: contract and tort. For instance, consumer law challenges the longstanding limited scope of “unconscionability” and the “implied terms” doctrines of contract law. Within the tort law category, consumer law reconceptualises the fundamental elements of the law of negligence. While significant parts of private law categories remain to be subject to the domain of the judge-made law, the consumer laws operate through legislation. The paper tackles the following two interrelated aspects of the interplay between consumer law legislation and the traditional private law categories: (1) the impact of consumer law legislation on the judge made law; (2) the relation of this legislation to a key philosophical concept of private law- “coherence”.
Catherine Niven (QUT)“Proposals to Modernise the EU’s General Product Safety Directive: A Blueprint for Australian Reform” [pre-recording of presentation here]There has been little progress on Australian product safety reforms since the 2019 public consultation on the regulatory impact assessment of introducing a General Safety Provision (GSP). Since this time, the global COVID pandemic has accelerated growth in online shopping, exacerbating the key weakness of the Australian regime: its lack of a GSP. The European Commission (EC) has identified that the growth of e-commerce has decreased the effectiveness of its General Product Safety Directive due to its lack of specificity to online selling and applicability to new e-commerce actors in the product supply chain. In June 2021, the EC commenced public consultation on significant reform proposals aimed at modernising its framework. These include dedicated reforms for online marketplaces with obligations focussed on their place in the product supply chain, specific provisions related to online sales, widening the mandatory incident reporting obligation and using new technologies to conduct product safety recalls. There appears to be significant momentum behind these reforms to be delivered under the New Consumer Agenda of 2020. Could the developments in Europe be an opportunity for Australia to build on the last decade of reform discussion by incorporating key European reform proposals to its product safety regime to elevate the level of consumer protection and create a fairer playing field for Australian businesses?    
Geraint Howells (Galway) [Keynote]“Consumer Product Safety and Online Platform Liability” (Powerpoints here)Platforms play an increasingly important role in e-commerce. This paper highlights different approaches to making them responsible and potentially liable for dangerous goods. Voluntary, regulatory and civil liability are all potential options being explored in Australia, the EU and US. This paper hopes to prompt discussion about the appropriate way forward.
Jeannie Paterson and Yvette Maker (UMelbourne)
“The Role of Consumer Protection Law in Responding to the Risks of ‘Intelligent’ Consumer Products”Intelligent consumer products like voice-activated digital assistants potentially offer tremendous benefits to many consumers. They are labour-saving devices that create opportunities to free consumers from mundane tasks and assist them to make more informed and rational decisions. They have also been promoted for their potential to facilitate the activities of daily living for older people and people with disability. Yet while intelligent consumer products may offer convenience and enhanced accessibility, they also carry risks of harm to consumers in relation to violation of privacy, bias and discrimination and interference with decision-making autonomy. This presentation will explore the role of consumer protection law in responding to these risks, with a particular focus on issues of accessibility and equity. It will also consider the role of codes of AI ethics, and the complementary contribution of other fields of law and policy, in addressing matters on which consumer protection law has less to say.
Nicola Howell (QUT) and Jeannie Paterson (Melbourne)“Remedies for emotional harm in Australian consumer credit law”Emotional harm is a highly foreseeable outcome of financial stress – whether this arises from borrowing more than is manageable (unsuitable credit), difficulties in repaying credit arising from unforeseen life contingencies (hardship) or not being able to access credit (financial exclusion). Together with co-regulation (AFCA) and self-regulation (eg, Banking Code of Practice), the National Consumer Credit Protection Act now provides an extensive regulatory framework that should help to prevent or reduce financial stress for Australian credit consumers, however, the extent to which this framework can facilitate remedies for emotional harm (and not just financial harm) has not yet been subject to academic consideration. In this paper, we seek to address this gap by examining the current and potential scope for remedies for emotional harm arising from credit law contraventions. We begin by considering the emotional harms which may arise from over indebtedness. We then identify the key statutory provisions specifically aimed at alleviating the effects of unsuitable credit and financial hardship, and the associated remedies for breach. We argue that given the purpose of these regimes it should be open to courts to award remedies aimed at responding to emotional harm. We consider the role of regulators and AFCA in remedial relief responding to emotional harm. We scrutinise the value to consumers of such responses before turning the final part to consider remedies for failure by lenders to engage with the hardship regime and the gaps in this regime in providing real obligations and remedies/redress for breach.
Zofia Bednarz (UNSW)“Using Consumers’ Data to Determine the Target Market for Financial Products: The Difficult Marriage between Financial Law and Data Protection”Digitalisation has had a profound impact on financial services, with increasingly precise data profiling of consumers being one of the drivers of profit for the industry in the digital age. However, data profiling may also result in consumer harm that could range from data breaches to unfair pricing, digital manipulation, discrimination, and exclusion of vulnerable consumers. This can be particularly problematic in financial services context due to the consequences it has on consumers’ access to financial products. In this paper I focus on the requirement to determine the target market for financial products and its interplay with privacy and data protection rules. I argue that financial product governance rules requiring target market determination for products will further incentivise data profiling of consumers by financial services providers. I analyse ways in which financial firms may collect and use consumers’ data for the purpose of constructing the target market and confirming that clients who receive offers of products are within this target market. There is a real risk that financial law and data protection frameworks have failed to strike a balance between (surprisingly) competing interests of consumer protection regarding the provision of appropriate financial products and the use of consumers’ data in digital profiling. This means that the new rules on financial products governance may backfire, resulting in unintended consumer harms.
Kate Tokeley (VUW)“The Power of the ‘Internet of Things’ to Mislead and Manipulate Consumers: A Regulatory Challenge”
(https://ndlsjet.com/the-power-of-the-internet-of-things-to-mislead-and-manipulate-consumers-a-regulatory-challenge/)
The “Internet of Things” revolution is on its way, and with it comes an unprecedented risk of unregulated misleading marketing, and a dramatic increase in the power of personalized manipulative marketing. IoT is a term that refers to a growing network of internet-connected physical “smart” objects accumulating in our homes and cities. These include “smart” versions of traditional objects such as refrigerators, thermostats, watches, toys, light bulbs, cars, and Alexa-style digital assistants. The corporations who develop IoT are able to utilize a far greater depth of data than is possible from merely tracking our web browsing in regular online environments. They will be able to constantly collect and share real-time data from inbuilt IoT sensors and trackers such as microphones, cameras, GPS sensors, and temperature sensors. Artificial intelligence (AI) can be used to analyze this raw data in order to gain insights into consumer preferences and behavior, and deliver individualized marketing messages via our IoT devices. The persuasiveness of these marketing messages is likely to be further enhanced if future IoT household assistants are developed to have human-like mannerisms and appearances. This article explains how current laws that prohibit businesses from misleading and deceiving consumers will struggle to operate effectively in an IoT marketing landscape, where questions of who can be held liable, who should be held liable, what communication should be prohibited, and how to ensure enforcement, all become more complicated. It argues that current legal frameworks will need to be re-formulated in order to maintain the ability to prevent deceptive and misleading communication. It also tackles the wider question of whether legal frameworks should be re-formulated so as to add in protections against excessively manipulative marketing. The article points to several potential ways to achieve such re-formulations. Redesigning legal regimes to effectively protect consumers in a new IoT marketing landscape will no doubt be a challenge. The starting point is to confront the fact that there are genuinely difficult problems for which existing regulatory toolkits are ill-equipped to handle.
Kayleen Manwaring (UNSW)“Enforcement-in-a-box: Computational Implementation of Private Rights”The rise in use of smart devices and cyber-physical systems has also seen a rise in attempts at technological implementation of methods of enforcement of private rights (such as contract or copyright) by suppliers of services and software supporting those devices and systems. Many of these devices and systems are hybrids of physical object, software, hardware, data and services, and often are capable of being remotely disabled or modified by the software or service provider. This capacity for remote disablement or modification has the potential to be a potent tool for service and software suppliers to regulate an individual’s use of smart devices and cyber-physical systems. These methods may be used to enforce penalties against alleged breaches of private rights without recourse to a judicial or other dispute resolution process.  This presentation will report on a work-in-progress project intended to examine these issues. Brownsword has warned that ‘full-scale technological management’ by regulators of prohibited conduct (eg a regulator technologically limiting the speed of a car or disabling it) is the ‘thick end of the wedge’ in relation to ‘destabilising’ the rule of law and degrading the importance of human ‘agency and autonomy’.  Pasquale has additionally cautioned that even in circumstances where automated enforcement is efficient, ‘critically important publicly legal values risk being lost or marginalised when dispute settlement is automated.’  This project will examine if this conceptual analysis can be extended to business entities utilising technological management to directly enforce private rights, discussing research questions along the following lines: (1) What harms to individuals, and consequently what detrimental effects on public legal values (such as protection of consumers from abuse of corporate power), might arise from technological implementation in smart devices of private law enforcement methods, such as enforcement of debts, contractual conditions or intellectual property rights? (2) To what extent do existing laws in Australia regulate these harms and detrimental effects? (3) Do legal problems arise in relation to these existing laws? That is, are any of these laws under- or over-inclusive or uncertain? Are there any new harms or detrimental effects arising that are completely unregulated by existing law? (4) How can these harms and detrimental effects be mitigated from a legal (and potentially technological) point of view? 
May Fong Cheong (ACU)“Remedies for Purchasers of Forged Art: The Potential in Section 18 ACL on Misleading Conduct”Art is acquired for its aesthetic value, for the beauty of that art piece as communicated by the artist. However, art is also increasingly acquired for the authorship of the art – buyers desiring not only art, but the work of a recognised “artist”. The authorship value of well-known artists has seen art pieces fetching skyrocketing prices transforming art as objects of aesthetic expression to art as an investment tool. The ‘commodification’ and ‘financialisation’ of art provide opportunities and economic incentives to produce counterfeits and forgeries posing unseen risk to purchasers of art. Both the art enthusiast and the art investor who pays a price for a work of art are entitled to enjoy, and obtain, that which they were led to believe – that the work is authored by the artist who painted that landscape, that object on the framed canvas piece he or she had paid for. They are entitled to the goods as described, to the attribution given of the art piece and to statements warranting the authorship and authenticity of the art. However, art authentication is a complex process: at the intrinsic level to search the truth to determine its cultural and historic value and at a practical level to protect the economic value of art and the functioning of the art market. The purchaser’s challenge to acquire authentic art pieces is further compounded by the intricacies and anomalies in the art industry; one concerning aspect is the questionable practices of auction houses. As a result, art purchasers find themselves in the precarious position of not knowing if the art pieces hanging in their walls are forged. This paper first considers two legal avenues that a disgruntled art purchaser might pursue: (i) implied conditions of goods corresponding to description in the Sale of Goods legislation; and (ii) consumer guarantees of acceptable quality, and of goods as described, under the Consumer Guarantee Law. It then considers how certificates of authenticity of authorship have been decided under the Uniform Commercial Code and under the New York Arts and Cultural Affairs Law. Finally, the paper investigates recourse to art buyers under the misleading conduct provision in section 18 of the Australian Consumer Law and argues that despite some limitations, this avenue offers the best potential for success for purchasers of forged art. 
Luke Nottage (USydney), Jeannie Paterson (UMelbourne) & Erin Turner (Choice)“Post-Pandemic Rights to Repair and Other Remedies Under the Australian Consumer Law” (PDF of Powerpoints here)
Recent survey evidence from Australia’s peak consumer NGO, for a current inquiry by the Productivity Commission into rights to repair, confirms anecdotal accounts of considerable problems faced by individuals in obtaining Australian Consumer Law remedies for suppliers’ violations of mandatory consumer guarantees (eg of “acceptable quality”, including reasonable durability). Over the last decade, suppliers may have learned not to expressly disclaim ACL obligations (risking enforcement action and fines), but also that consumers need to prove a product defect, and may be particularly prone therefore not to provide remedies since the lockdowns and other impediments to accessing justice since 2020. Our presentation looks at the extent and types of problems experienced, analyses the current ACL regime, and proposes various substantive and procedural reforms to generate better consumer redress and therefore supplier behaviour.

ANJeL-in-Europe 2021 Workshop: “Japanese Law: Connections and Interactions”

ANJeL was pleased to host this informal research webinar on 10 July, aimed at members in or closely connected with Europe, hosted by Prof Giorgio Colombo (Nagoya U) and Luca Siliquini-Cinelli (Dundee). It follows the successful inaugural symposium held at the University of Pavia in late 2019 (thankfully just before the pandemic), hosted by Giorgio as ANJeL-in-Europe coordinator. Six presentations and some linked materials are set out below. After the lively webinar, Giorgio hosted an even livelier “virtual izakaya” (nijikai) via the free Spatial Chat platform – a first for most of us and certainly for ANJeL!

Opening Remarks – Giorgio F. COLOMBO, Luca Siliquini-Cinelli1.

1. Japan’s Earliest Women Pioneers in Law Teaching — Brief Introductions of their Stories – Mark LEVIN  

[click here for Powerpoints and here for his Youtube video presentation on the wider project and paper on “Presence and Voice: The History and Status Quo of Women Law Professors in Japan“]

2. Revisiting Ramseyer: The Chicago School of Law and Economics Comes to Japan – Luke NOTTAGE  (with Craig FREEDMAN)

[Click above for paper, see below * for Abstract, and click here for Powerpoints]

3. Japan’s Low Litigation Rate: Lessons from the Labor Tribunal System – Wered BEN-SADE

4. The Japanese Unequal Treaties: From their Signing Until Their Renegotiation – Béatrice JALUZOT

5. IP-related rights and Free Trade Agreements (FTAs): A Japanese Approach – Matteo DRAGONI

6. Japan, the European Union and Global Governance – Dimitri VANOVERBEKE [click here for Powerpoints and here for his related new co-edited book]

* Freedman, Craig and Nottage, Luke R., Revisiting Ramseyer: The Chicago School of Law and Economics Comes to Japan (June 17, 2021). Available at SSRN: https://ssrn.com/abstract=3868698

Abstract: Mark Ramseyer has been a leading force in bringing to bear the methods of Law and Economics to an increasingly ambitious analysis of the Japanese legal and economic systems. He has deliberately assumed an iconoclastic position in debunking a number of widely-held beliefs about Japan. More recently he has engendered a bitter degree of controversy by idiosyncratically analysing Korean “comfort women” and residents in Tokyo before and during World War II. In this paper we examine Ramseyer’s long contribution to Japanese studies and conclude that he has too frequently let ideological objectives, paralleling three key tenets of the Chicago School of economics, interfere with what should be cool-headed analysis. While asking many of the right questions, prompting often helpful responses and further research, he unfortunately has let a priori assumptions determine his answers. Ramseyer has proven reluctant to review his assessments or implications, largely dismissing contrary evidence.

Keywords: comparative law, Asian law, corporate governance, consumer law and policy, Japanese studies, economic history, market fundamentalism, rational choice theory, social science methodology