Luke Nottage – Page 23 – Japanese Law and the Asia-Pacific

Guest blog: “The Tokyo International Military Tribunal: A Reappraisal”

[Below is an overview of an intriguing book with this self-explanatory title, reviewed by my colleague specialising in public international law, A/Prof Ben Saul; and a former Research Assistant at our Sydney Centre for International Law, Naomi Hart. Their Review was published in [2010] Australian International Law Journal 295-9. The full PDF version, including footnote references, is downloadable here.
My own Review of this book co-authored by Professor Neil Boister (University of Canterbury) and Robert Cryer (University of Birmingham), is forthcoming in [2011] New Yearbook of International Law. That Review is written with my father, Richard Nottage, who in the 1960s undertook post-graduate research into pre-WW2 Sino-Japanese political and economic history using primarily the full sets of Tokyo War Crimes Trial documentation donated to the University of Canterbury (by the New Zealand Judge on the tribunal) and to Oxford University. A shorter Review written by Richard alone, published in (November-December 2010) New Zealand International Review 27-28, is already downloadable here.]

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Drafting Arbitration Clauses to Minimise Costs and Delays in International Commercial Arbitration: An Asia-Pacific Perspective

[This is the outline of my presentation at the Chartered Institute of Arbitrators Asia-Pacific Conference 2011, in Sydney over 27-28 May. (A PDF version including full references and hyperlinks can be downloaded here.) It draws on research for the project, ‘Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific‘, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade.]
Concerns about growing delays and (especially) costs in International Commercial Arbitration (ICA) have spread from West to East:
Advantages of ICA over Cross-Border Litigation (‘East’ vs ‘West’)
Response: ‘highly relevant’ or ‘significant’(* Statistically significant at 99% confidence level)
Region of Practice: East (Ali study ‘06) West (CBU ‘94)
Forum’s neutrality 88 (%) 78 (%)
Forum’s expertise 83 76
Results more predictable 36 42
Voluntary compliance* 42 24
Treaties ensure compliance abroad 85 69
Confidential procedure* 76 56
Limited discovery 47 56
No appeal 64 58
Procedure less costly 36 20
Less time consuming* 57 35
More amicable 52 35
This is also a major and longer-standing concern about Japanese corporations, for example, which explains why they still do not contest many ICA cases (even at the JCAA) despite increasingly incorporating arbitration clauses in cross-border contracts. The ICC, which has a growing Asia-Pacific caseload, has produced a useful Report suggesting various means to manage costs and delays. Yet the ICC distinguishes itself as a ‘high-quality, high-cost’ arbitral venue, evidenced eg by the hands-on service provided by its Secretariat and its ‘Court of Arbitration’. My presentation therefore proposes measures that are often more radical, and which may be particularly suited for ICA involving Australian and Asian parties.

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Guest blog: Japan’s regions – could the Tohoku Earthquake lead to local government reform? by Joel Rheuben

[Joel Rheuben, LLB / BA (Hons) Syd, is pursuing postgraduate studies at the University of Tokyo Faculty of Law. We extend our condolences to the victims of the natural disasters and ongoing nuclear power plant emergency in Tohoku.]
On 30 April, the Democratic Party of Japan’s “Reconstruction Vision Team” delivered its preliminary report to Chief Cabinet Secretary Yukio Edano. Its report set out in general terms a range of potential mid- to long-term measures to reinvigorate the local economy and improve food and energy security in Japan’s Tohoku region in the wake of the 3/11 earthquake. Significantly, in addition to proposing options such as the establishment of a special corporate tax-free economic zone, the report urged the reconsideration of the relationship between the national and local governments more generally, including “keeping in sight a future State” for the region.

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“International Commercial Arbitration: An Asia-Pacific Perspective” – Book Review

International Commercial Arbitration: An Asia-Pacific Perspective, by Simon Greenberg, Christopher Kee & Romesh Weeramantry, Cambridge University Press, Melbourne, 2011, 543pp + xxxvii tables: ISBN 9780521695701. Softcover A$120.
This book provides a comprehensive and in-depth overview of the law and practice of international commercial arbitration. It is the first work written by Australian experts that offers “an Asia-Pacific perspective” on a field that has burgeoned particularly in Asia and world-wide since the 1990s, following significant liberalisation of cross-border trade and investment. The book’s focus is more on “Asia” than the “Pacific”. It concentrates especially on arbitration law and procedural rules in Australia (including, briefly, the July 2010 revisions to the International Arbitration Act), mainland China and Hong Kong, India, Malaysia, New Zealand, the Philippines and Singapore, with reference also to Indonesia, Japan and the Republic of Korea. It also discusses developments in the United States, and to a lesser extent Canada, as well as in traditional “core” venues in Europe for international arbitration such as England and France.
After an “introduction to international arbitration and its place in the Asia-Pacific” (ch1), chapters cover all main areas of law relevant to drafting arbitration agreements, operating arbitration proceedings, and enforcing awards:
• “the law governing the arbitration and role of the seat” (ch2), “applicable substantive law” for the underlying disputes (ch3), formal and substantive requirements for the “arbitration agreement” itself (ch4);
• establishing or challenging “arbitral jurisdiction” (ch5), appointing or challenging “the arbitral tribunal” (ch6), “procedure and evidence” (ch7, including a helpful Table, at pp319-22, comparing approaches typically associated with civil law or common law traditions in civil procedure);
• “the award: content and form” (ch8) and its “challenge and enforcement” (ch9).
The book also adds a succinct introduction to “investment treaty arbitration” or investor-state arbitration (“ISA”: ch10). This is an increasingly important topic in the Asia-Pacific region – including Australia, where in April 2011 the “Gillard Government Trade Policy Statement” proclaimed that Australia would no longer include ISA in its investment treaties or Free Trade Agreements if this offered foreign investors more rights than local investors. This policy Statement reflects a recommendation of the Productivity Commission finalised last December, which I have criticised on this blog as well as on the East Asia Forum.

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Legal Education in Asia: Globalization, Change and Contexts – In Review

Downloadable here is my review essay, for the Journal of Japanese Law, of a recent 16-chapter monograph on legal education in Asia. The monograph on ‘Legal Education in Asia‘ is a fitting commemoration of the teaching, research and formidable networking capacity of the late Professor Malcolm Smith – a leader in developing Asian and Japanese Law studies in Australia, Canada and world-wide. It should be read by academics, practitioners and policy-makers with an interest in legal education, particularly in the Asia-Pacific region.

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Guest blog: “Community and the Law: a critical reassessment of American liberalism and Japanese modernity”

[Dr Trevor Ryan, Assistant Professor of Law at the University of Canberra, reviews this book by Takao Tanase (Elgar, 2010), edited and translated by Luke Nottage and Leon Wolff. His review will be published in 31 Journal of Japanese Law (2011).]
Community and the Law is a collection of seminal essays written by leading Japanese legal sociologist Takao Tanase. But it is also much more than that. With the able assistance of Nottage and Wolff as translators and editors, Tanase has distilled something of a communitarian manifesto from a vast body of work traversing multiple subjects and methodologies. The book is divided into three substantive parts: ‘a critique of American liberalism’, ‘a normative theory of community and the law’, and ‘a re-evaluation of Japanese modernity’. However, the elements of Tanase’s manifesto emerge only from a thorough and holistic reading of this challenging but rewarding book.

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Guest Blog – Enhancing Transparency and Earlier Resolution of Trade Disputes: Australia, Japan and the WTO

[This blog by my colleague Dr Brett Williams is based on his research for our project, ‘Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific‘, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade.]
As part of this project on possible dispute settlement provisions that could be incorporated into an Australia Japan Free Trade Agreement, Dr Brett Williams is working on papers suggesting two innovations that could be incorporated into the provisions for inter-state dispute resolution regarding alleged violations of market access commitments. Both of these innovations would enhance the transparency of the issues at stake in the potential dispute, and potentially promote earlier and more cost-effective dispute resolution.
One important further aspect of both of these possible innovations would be that they would be capable of being incorporated into the WTO dispute settlement procedure. Both Australia and Japan have long traditions of support for the multilateral trading system and both have a keen interest in being active players in enhancing and improving the system. Therefore, in suggesting these innovations for possible incorporation into an Australia Japan FTA, Dr Williams also considers whether Australia and Japan could use the FTA as a way of trialling some procedures which could later be the subject of a joint proposal by Japan and Australia to amend the WTO dispute settlement procedure. Neither of the proposed innovations are particularly contentious in their concept but there could be some contention about the practical aspects of implementing them.

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WikiLeaks and “A Whale of A Story”

[This is based on research for the project, ‘Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific‘, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade. An edited version was published on Australia Day by the East Asia Forum blog.]
My Sydney Law School colleague Dr Tim Stephens convincingly criticises the Sydney Morning Herald and others recently for over-sensationalising Australia’s alleged “Secret Dealing on Whale Hunts”, in reporting drawing on documents released by WikiLeaks. He also analyses reports indicating some opposition with the Australian government about the proceedings it has now initiated against Japan before the International Court of Justice (ICJ). A lively debate has emerged on the ABC’s website in response to Dr Stephens’ article entitled “A Whale of a Story”, with many more excellent points made on both sides of the whaling debate. Here is my own two yen’s worth.

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Australia’s Productivity Commission Still Opposes Investor-State Arbitration

[This is based on research for the project, ‘Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific‘, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade.]
The Australian Government’s Productivity Commission (PC) released on 13 December its Research Report on Bilateral and Regional Trade Agreements (BRTAs). Recommendation 5 of the Draft Report in July had suggested that BRTAs (including International Investment Agreements or IAAs) should include Investor-State Dispute Resolution (ISDS) only if Australia’s counterpart country has a relatively underdeveloped legal system, and more generally only if foreign investors did not obtain more expansive protections than domestic investors. Following criticism of some factual errors and various arguments included in the Draft Report, the PC convened a policy workshop for officials, academics (including myself) and other stakeholders. Some views expressed there are partly reflected in the longer and somewhat better-argued section on ISDS now found in the final Report (at Part 14.2, pp265-77). Unfortunately, however, there remain serious problems with the analysis, which includes the following Findings by the PC:

‘1. There does not appear to be an underlying economic problem that necessitates the inclusion of ISDS provisions within agreements. Available evidence does not suggest that ISDS provisions have a significant impact on investment flows.
2. Experience in other countries demonstrates that there are considerable policy and financial risks arising from ISDS provisions.’

Below I focus on the implications of this approach. They are particularly acute for Australia’s present negotiations for a Free Trade Agreement (FTA) with Japan, for accession to the Trans-Pacific Partnership Agreement (TPP, which Japan is also interested in joining), and for developments more generally within APEC and at the multilateral level

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Good for the Goose, Not Good for the Gander? Australian versus Japanese Approaches Towards Investor-State Arbitration

[This is based on research for the project, “Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific”, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade. An edited and updated version is also on the East Asia Forum.]
The Productivity Commission (PC) released on 16 July a Draft Report for its Review of Bilateral and Regional Trade Agreements, commissioned by the Assistant Treasurer to reconsider the Australian Government’s policy in negotiating Free Trade Agreements (FTAs). It acknowledges the inefficiencies of preferential agreements compared to multilateral approaches. However, given the persistent impasse in WTO negotiations, the Report pragmatically suggests various means to maximise benefits in the short-term, which may also lead to longer-term multilateral solutions. Unfortunately, that ideal is unlikely to be achieved – risking perverse implications throughout the Asia-Pacific, where Australia has concentrated its FTA activity – if the PC’s Final Report ends up including all these suggestions in its Draft Recommendation 5:
1. “Where the legal systems of partner countries are relatively underdeveloped, it may be appropriate to refer cases to third party dispute settlement mechanisms.
2. However, such process should not afford foreign investors in Australia or partner countries with legal protections not available to residents.
3. Investor-state dispute settlement procedures should be subject to regular review to take into account changing international best practice and the evolving legal systems in partner countries.”
As explained in my Submission to the PC (reproduced here), I have no great difficulty with the last point, although I suggest that one way to achieve that goal would be for Australia to develop and update a Model Bilateral Investment Treaty (BIT). I have much more difficulty with the PC’s second recommendation, but I focus now on problems with the first as it is particularly relevant to Australia’s policy position in regard to the Asia-Pacific, and especially now Japan.

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