Improving the Effectiveness of the Consumer Product Safety System: Australian Law Reform in Asia-Pacific Context

[This is the original draft blog for The Conversation, related to my ongoing ARC-funded joint research project DP170103136 and a paper this year (manuscript on SSRN.com here). A version will be presented and then discussed in the 1 December 2020 webinar for the International Association of Consumer Law (pre-recording available here).]

The COVID-19 pandemic has heightened our awareness of safety risks, but also the socio-economic costs to reduce them. Public health interventions can also collide with human rights and constitutional principles, and undermine state capacity. Australia’s policy-makers and regulators are still facing many difficult choices.

In consumer law, they and peak NGOs like Choice have been busy grappling with a range of pandemic-related issues. These range from hand sanitiser quality through to refunds for airfares and other travel services. Nonetheless, hopefully policy-makers can now get back to some unfinished business, as we learn to live with COVID-19 while praying for a vaccine or cure.

In October 2019 the Treasury released its Consultation Regulatory Impact Statement (RIS) entitled “Improving the Effectiveness of the Consumer Product Safety System”. This was part of a suite of reform initiatives agreed after the 2016-7 review of the Australian Consumer Law (ACL), which re-harmonised consumer rights and regulatory powers nationally from 2011.

The review’s Final Report and now the RIS considered adding to the ACL an EU-style “general safety provision”. European countries (such as the UK in 1987, then the EU from 1992), as well as Hong Kong, Macau, Malaysia (1999), Canada (2010) and Singapore (2011, partially), have introduced such a GSP. It was discussed in several earlier government inquiries, notably by the Productivity Commission in 2006 and 2008, but the Commission concluded that the ACL should try some other measures first. A GSP would require manufacturers and importers to ensure that they only supply safe consumer products, otherwise risk public law sanctions from regulators.

Choice found that many Australians wrongly assume we already have this requirement. Yet the ACL currently only allows mandatory safety standards to be set pro-actively for specific types of general consumer products (currently around 40). Regulators can also issue bans (around 20) for products found unsafe, but this is a reactive response.

Also only after harm arises, manufacturers indirectly incentivised to supply safe products by harmed consumers potentially bringing strict liability compensation claims. But such ACL product liability claims, requiring individuals to prove a “safety defect”, are diminishing. Even large class action law firms prefer focusing resources on simpler claims by shareholders against companies for misleading conduct.

The Treasury’s draft RIS invited public comment on various reform options and three perceived problems. One problem was misunderstanding about the current ACL regime. A second was its largely reactive nature, impacting on regulatory interventions and supplier behaviour. A third was considerable harm from unsafe consumer products. The ACCC identified 780 deaths and 52000 injuries annually. It also estimated at least a $4.5 billion annual economic cost, assuming around a $200,000 “value of a statistical life year” for premature deaths and disability. There were also costs of $0.5 billion in direct hospital costs for governments, and further costs associated with minor injuries and consequential property loss.

My own Submission and a related peer-reviewed article added comparative empirical data in support of a GSP. First, the OECD Global Recalls portal shows that Australia reported higher per capita voluntary recalls over 2017-9 than Korea, the UK, Japan and the USA. Australia had a rate similar to Canada, but its legislation has a more expansive duty on suppliers to report product accidents to regulators compared to that added to the ACL. A large proportion of our recalls involve child products, mostly from China.

[Table 1: Comparing Australia’s Recalls (2017-9)]

Secondly, annual recalls have been growing in Australia, as pointed out by Catherine Niven et al (co-researchers for our ARC-funded project comparing child product safety) and various submissions by Choice. The uptick is noticeable from around 2012, tracking burgeoning e-commerce and more importers dealing with more manufacturers abroad.

[Figure 1: Australia’s Recalls (1998-2019)]

The USA instead had fewer recalls after introducing third-party conformity assessment for toy exporters after problems around 2008. Niven et al add that Australian recall notices do not need to include some significant information. Many Australian recalls of child products also involve breaches of the mandatory standards that have actually been set. Our regulators could try to sanction local suppliers more for that. But introducing a broader GSP, alongside some of the other RIS options and/or “product safety substantiation” power as discussed in my article, would encourage a “paradigm shift” needed among Australian firms.

Suppliers would need to think more carefully about (and document) safety assessments before putting consumer products on the market. This is more efficient and safer than releasing products and then trying to recall them after problems start to be reported, hoping not too many consumers get harmed. It would also encourage Australian firms to “trade up”, like counterparts overseas, to the standards expected in many of our trading partners.

[Luke Nottage receives funding from the Australian Research Council: DP170103136, “Evaluating consumer product regulatory responses to improve child safety”. He provides occasional pro bono advice to Choice regarding consumer law and policy reform, and acknowledges assistance from them in compiling what is reproduced here as Figure 1.]

UNCCA conference (video) presentation: “Australia’s investment treaties and reviews”

Written by: Prof Luke Nottage & Ana Ubilava

[This posting and linked video presentation, reproduced from Erga Omnes, relates also to my book in press with Elgar comparing international arbitration in Australia and Japan in regional and global contexts.]

The UNCITRAL Coordination Committee for Australia (UNCCA) and the Commercial Law Association (CLA) is holding an online seminar on Monday 26 October 2020 partly to celebrate the fortieth anniversary on the CISG (UN Convention on Contracts for the International Sale of Goods). The live, interactive seminar will be supplemented by a full conference package including pre-recorded presentations. A longer (30-minute) version of a pre-recording by UNCCA Fellow Dr Luke Nottage (Professor of Comparative and Transnational Business Law) and Ana Ubilava (PhD student at Sydney Law School and ANJeL Executive Coordinator) can be viewed here. Our presentation is entitled “Australia’s recent investment treaty ratifications and reviews: The UN Transparency Convention and investor-state mediation”. It is based on Ana’s recent postings on investor-state mediation (her PhD thesis topic) for the Kluwer Mediation Blog (reproduced here) and for the Kluwer Arbitration Blog with Luke and Prof James Claxton, as well as her lead-authored chapter with Luke for his co-edited book on Asia-Pacific international business dispute resolution due out from Kluwer by end-2020:

Ubilava, Ana and Nottage, Luke R., Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS Policy: The CPTPP, Hong Kong, Indonesia and Mauritius Transparency Treaties (March 4, 2020). in Nottage, Luke; Ali, Shahla; Jetin, Bruno; Teramura, Nobumichi (eds), “New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution”, Wolters Kluwer, (Forthcoming) , Sydney Law School Research Paper No. 20/12, Available at SSRN: https://ssrn.com/abstract=3548358 or http://dx.doi.org/10.2139/ssrn.3548358

Our presentation updates for recent developments including DFAT’s public consultation to review Australia’s remaining BITs, with Luke’s Submission here and a related thought-provoking Clayton Utz / University of Sydney International Arbitration Lecture this year by Prof Zachary Douglas; but a summary of our original chapter manuscript is as follows.

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

This paper examines how (US-style) CPTPP drafting compares with two important recent investment agreements subsequently signed by Australia over 2019, namely with Indonesia as part of a wider free trade agreement (IA-CEPA), and with Hong Kong (AHKIA, alongside a bilateral FTA covering non-investment matters). AHKIA came into force from 17 January 2020, while IA-CEPA has been ratified by Australia but not yet by Indonesia. IA-CEPA adds a provision unique in the universe of over 3000 investment agreements world-wide, probably proposed by the Indonesian side: a compulsory mediation step prior to arbitration, if the host state requests mediation after the foreign investor initiates ISDS. The paper also highlights other features of both treaties that may help reduce delays and hence costs in ISDS. The paper summarises empirical data about delays and costs, as well as transparency around ISDS as another growing public concern, including some of our own empirical data provided as evidence to an Australian parliamentary inquiry into ratifying the CPTPP.

We also examine the 2019 parliamentary inquiry that agreed with the submission that Australia should ratify the Mauritius (“UN ISDS”) Convention, thereby retrofitting extensive transparency provisions on pre-2014 treaties between Australia and other states that might also accede to that framework Convention. Even if Mauritius Convention ratifications proliferate, however, it will not retrofit extra transparency provisions to treaties concluded even after 1 April 2014 even among those states (say between Australia and Indonesia, where the investor chooses the ICSID Rules rather than UNCITRAL Rules option for arbitration). Accordingly, states ratifying the Mauritius Convention will still need to agree bilaterally to expand any still-limited transparency provisions in such post-2014 treaties, which is quite inefficient compared to a multilateral solution. Nonetheless, we conclude from these new developments that Australia is now better placed to play a more active role in guiding the future path of international investment treaty-making multilaterally and especially in the Asia-Pacific region.

Pioneering Mandatory Investor-State Conciliation Before Arbitration in Asia-Pacific Treaties: IA-CEPA and HK-UAE BIT

Reproduced from the Kluwer Arbitration Blog, which subsequently ran a series on investor-state mediation; and written by: James Claxton (Rikkyo University), Luke Nottage (University of Sydney & Williams Trade Law), and Ana Ubilava (University of Sydney).

Arbitration has been the default dispute resolution mechanism in the investor-state dispute settlement (ISDS) regime for a long time. Provisions for third-party procedures other than arbitration have been relatively rare in older generation bilateral investment treaties (BITs). Even where those have provided in advance for the option of ICSID (Convention or Additional Facility) Conciliation Rules, investors have rarely invoked them. Only 13 cases have been filed since 1982 with four filed since 2016. The latest Conciliation Rules case was filed by Barrick Niugini Ltd against Papua New Guinea on 22 July 2020 under a mining lease contract. Barrick Niugini is a joint venture between Chinese Zijin Mining and Canadian Barrick Gold. In parallel, Barrick Gold’s Australian subsidiary instituted ICSID Convention arbitration on 11 August 2020 under the 1990 Australia-PNG BIT.

Over the past decade, calls have grown for other alternative dispute resolution mechanisms with a special focus on mediation. Mediation is believed to be a time- and cost-efficient dispute resolution mechanism that can prevent disputes from escalating to arbitration. Various stakeholders have taken up the call to facilitate and promote investor-state mediation. UNCITRAL Working Group III is discussing mediation in the context of ISDS reform and so is the Academic Forum on ISDS (see, for example, a March 2020 paper circulated for discussion). Mediator trainings are being offered for investor-state disputes, and ICSID is promulgating mediation rules for the first time that will be available even if neither the home nor host state has ICSID membership status. The UN Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention) is also set to come into force from 12 September 2020. While this Singapore Convention does not extend expressly to investment disputes, there is broad agreement that at least some settlement agreements resulting from investor-State mediations will fall within its scope.

Some newer treaties include additional express references to mediation or conciliation in ISDS clauses, but disputing parties must agree separately and later to those procedures.1) While the use of such voluntary mediation may be growing, until recently there has been little to no interest in mandatory mediation – as a pre-condition to arbitration. Some still see mediation as unlikely to be or even incompatible with the aims of ISDS. Perceived obstacles include: (a) some States may have difficulty determining an authority to conclude settlements on their behalf; (b) settling an investment dispute could be associated with risks of personal liability and criminal prosecution (especially in developing economies or totalitarian States with weak rule of law); (c) settling a dispute could be considered an admission of guilt by the respondent State; (d) settlements do not pay as much as what a Claimant could be awarded through a successful award; (e) some investment disputes have non-monetary claims that require certain legislative or policy measures from the Respondent State which would go beyond the capacities of mediation; and (f) settlements promote secrecy of outcomes.

Several such arguments have been challenged through a recent empirical study analysing 541 concluded, treaty-based investor-state arbitration cases with the focus on settlement outcomes. The findings suggest that none of the key factors — such as the economic industry of the investment, size of the initial claim (or whether it was monetary or non-monetary), or the economic development status of the respondent state (and claimant home state) — have a negative impact on settlements. The study also found that in settlements the average compensation rate is 32%, very similar to that of the awarded-to-claimed compensation rate (31%). In addition, settlement agreements have been reached on non-pecuniary terms even when the claim was monetary, suggesting that the non-pecuniary claimed relief is not an unsurmountable impediment to reaching a settlement agreement. The study did find that settlements are associated with increased confidential outcomes compared to those ending in arbitration awards, but recently the rate of confidentiality for all outcomes has remained stable while the rate of settlements keeps falling. This suggests that leaving investor-state disputes to arbitration does not guarantee increased transparency either. Such findings, highlighting more potential for amicable settlements generally than many may have assumed, dovetail with emerging interest by investors and States in mandatory mediation. A forthcoming report by Queen Mary University of London finds that 64% of respondents (mostly in-house counsel plus some management representatives of firms investing internationally) favour integrating mediation as a mandatory pre-condition to arbitration in ISDS.

Already, the new Hong-Kong-United Arab Emirates BIT (HK-UAE BIT) and the Indonesia-Australia Comprehensive Economic Partnership (IA-CEPA) free trade agreement, add unusual provisions for mandatory conciliation as a pre-condition to arbitration. These provisions mark a break with existing IIAs that do not even mention mediation or conciliation – much less make such provisions mandatory. Under the HK-UAE BIT and IA-CEPA, both signed in 2019, respondent States can require claimant investors to attempt conciliation before they can raise their claims in arbitration. Investors do not have the same right to mandatory conciliation. Both of the treaties carve dispute resolution out of their most-favoured nation provisions (Art. 14.5(3) of IA-CEPA and Art. 4(8) of the HK-UAE BIT), which means that there is no risk that this conciliation requirement can be circumvented by investors on the basis of MFN treatment.

These provisions mark an innovative approach to conciliation and a significant rethinking of its place in the ISDS system. They coincide with ongoing attempts to put States on better footing to manage and defend investor claims that include control mechanisms on treaty interpretation, procedures to address frivolous claims, and the potential creation of a multilateral advisory centre. The State option to require mediation as a precondition to arbitration could serve as a model for other treaties, although the forthcoming Queen Mary report suggests that there may also be appetite for mandatory mediation among investors. Quite similarly, some commentators have argued that greater transparency around investor-state disputes can appeal to investors, not just host states, by highlighting state practices (such as discrimination in favour of well-organised local interests) that diminish overall welfare among more disparate citizens. Accordingly, in advocating compulsory investor-state mediation, reformers may find more widespread support than expected.

Nonetheless, to minimise the risks of just adding extra time and expense to ISDS proceedings, such provisions need to be well drafted. A separate analysis already identifies some uncertainties in interpretation, including for different timeframes established by IA-CEPA compared to the HK-UAE BIT. In theory, different timelines might be expected if the treaty involves a developing country, likely to have more inbound than outbound ISDS claims. Indeed, Indonesia seems more likely to have proposed the compulsory mediation step than Australia, as it has been subject to 7 inbound treaty-based claims according to UNCTAD (including a high-profile one brought ultimately unsuccessfully by Australian/British mining companies under the now-terminated 1992 Australia-Indonesia BIT). Indonesia has also mentioned mediation in UNCITRAL reform deliberations, whereas no compulsory mediation step was included in the Australia-Hong Kong BIT – even thought that too was signed in 2019.

Nonetheless, the HK-UAE BIT shows that even developed economies can be willing to add a compulsory investor-state mediation step. It seems more likely to have been proposed from the UAE side, as the latter has experienced 4 inbound claims (although its outbound investors have also initiated 12), whereas Hong Kong has not been subject to any – although Hong Kong has also been trying to position itself as a hub for investor-state mediations generally. Just as Lauge Poulsen’s earlier empirical research showed a significant (though temporary) slowdown in investment treaty signings after a host state’s first inbound ISDS claim, it may be that states subject to several claims become more likely to negotiate for compulsory investor-state mediation provisions. Australia instead has only been subject to one serious inbound claim, albeit the very high-profile Philip Morris Asia claim brought unsuccessfully under the now-terminated 1993 BIT with Hong Kong, and its government may be mindful that Australian investors (especially resources companies) are now initiating quite a few outbound claims. Accordingly, even if a counterparty proposes a compulsory mediation step (like Hong Kong may have done for the new BIT), Australia may be less likely to agree unless pressed strongly (as Indonesia may have done with IA-CEPA).

If such hypotheses are plausible, it may take more sustained effort to “nudge” more states towards adding such compulsory investor-state mediation provisions in addition to the default arbitration clause. This could be done through international bodies (UNCITRAL, ICSID, UNCITRAL and the OECD) but also widespread consultation among stakeholders domestically, including firms or industry groups interested in outbound investment as well as the civil society groups that are typically more concerned about inbound ISDS claims. Broader discussion is needed anyway as Poulsen’s study reveals how “status quo bias” extends to treaty negotiators, and jurists may be particularly risk averse and wedded to precedent. A rethink may be particularly timely as concerns are emerging, including in Australia, about potential ISDS claims in the wake of the COVID-19 pandemic. The Australian government has also just announced public consultation to review remaining older bilateral investment treaties. One question for stakeholder submissions is whether those should incorporate modern provisions from Australia’s FTA practice. Compulsory mediation before arbitration is not specifically mentioned but is worth considering.

Book in Press with Elgar: ‘International Commercial and Investor-State Arbitration – Australia and Japan in Regional and Global Contexts’

[The following book’s 160,000-word manuscript has just been submitted to Elgar, to be published in early 2021, after careful kind proof-reading by James Tanna (CAPLUS student intern, 2020) and research assistance from Dr Nobumichi Teramura (CAPLUS Associate and co-editor/author in other works).]

Abstract: The COVID-19 pandemic has forced many international arbitrations online, potentially making the field increasingly global and informal, as arbitrators adopt more efficient procedures and experience fewer challenges. But will it last? We have seen a similar trend before, over the 1990s, reacting to concerns over growing costs and delays over the 1970s and 1980s, linked to the influx of Anglo-American law firms into the international commercial arbitration world. Yet formalisation has resurfaced over the last 10-15 years, despite arbitration’s move East and consequent globalisation, partly due to the rapid growth of treaty-based investor-state arbitration. This 12-chapter book examines how international commercial and investor-state arbitration has been framed by this evolving relationship between twin tensions, ‘in/formalisation’ and ‘glocalisation’. Interweaving historical, comparative, empirical and doctrinal research over two decades [updating and expanding several publications hyperlinked below], the book focuses on attempts by Australia and Japan to become less peripheral players in international arbitration, especially in Asia-Pacific context.

Keywords: international dispute resolution, international commercial arbitration, investor-state dispute settlement (ISDS), foreign investment (FDI), Asian and comparative law, treaty-making and law reform processes

Special features: The book (1) combines analysis of both international commercial and investment treaty arbitration, (2) using mixed methods (historical, comparative, empirical and doctrinal research), (3) presenting the first detailed comparison of Australia and Japan, (4) drawing implications for their stakeholders as well as post-pandemic arbitratio

Chapter 1. In/formalisation and Glocalisation Tensions in International Arbitration

Abstract: This introductory Chapter outlines the trajectory of two growing fields of cross-border dispute resolution – international commercial arbitration (Part I of the Book) and international investment treaty arbitration (Part III) – as well as some crossovers (Part II). Australia and Japan, bearing important similarities in both fields and a few significant differences, are examined in Asia-Pacific and global contexts. An evolving and complex tension emerges between more formal versus informal approaches within international arbitration (‘in/formalisation’) and between globalisation and national or local circumstances (‘glocalisation’). International arbitration was first quite informal yet global, then became more formalised under growing influence of the common law tradition. It then saw some pushback towards more informal (or at least speedier) arbitrations amidst further globalisation over the 1990s, a tendency now re-emerging amid the COVID-19 pandemic. Yet the last 10-15 years have seen resurgent costs and delays, which could well resurface.

Part I: International Commercial Arbitration in Japan and Australia

2. The Vicissitudes of Transnational Commercial Arbitration and the Lex Mercatoria: A View from the Periphery

Abstract: This Chapter outlines two important empirical studies from the 1990s, setting an historical and theoretical benchmark for assessing the past and future of international arbitration. Those highlighted a growing formalisation of international commercial arbitration’s over the 1970s and 1980s, influenced by growing influence from Anglo-American legal practice. Yet this Chapter finds some pushback by the late 1990s towards more informal and global approaches. It also highlights further historical contingency by outlining Japan’s attempts around then to revamp its arbitration law. Although that was partly aimed at meeting the evolving international standard, epitomised by the UNCITRAL Model Law, it was part of a much wider justice reform program over 1999-2004 focusing primarily on domestic dispute resolution. Such ‘localised globalism’ contrasts with Japan’s efforts from 2018 to promote itself as another regional hub for international arbitration (outlined in Chapter 4), which therefore instead suggest more ‘localised globalism’.

3. The Procedural Lex Mercatoria: The Past, Present and Future of International Commercial Arbitration

Abstract: The substantive lex mercatoria (international contract law) is showing signs of growing formalisation. Similarly, international commercial arbitration law and practice – as the procedural lex mercatoria – became increasingly formalised over the 1980s. However, during the 1990s there was some shift back towards more informalism (especially to regain the advantage of speedier proceedings compared to cross-border litigation) as well as more global solutions to major issues arising in the arbitration world. This is illustrated by outlining developments across thirteen key ‘pressure points’ in international commercial arbitration law and practice, covering hot topics related to the arbitration agreement, arbitral procedure, award enforcement, and overarching issues. The Chapter indicates scope for further and more consistent developments towards restoring globalised and informal approaches. Yet it leaves open the possibility of international arbitration reverting to greater formalisation – in fact found especially over the last 10-15 years (as illustrated in Part II of this Book).

4. Japan’s Arbitration Law of 2003: Early and Recent Assessments

Abstract: Japan’s Arbitration Act 2003 was part of justice system reforms focused on domestic dispute resolution, although based on the UNCITRAL Model Law. The Act left few major interpretive issues, and created scope eventually to enhance international arbitration in Japan. Yet neither type of cases has grown significantly. There were also significant continuities evident from the persistent use of Arb-Med to promote early settlement during arbitrations. The stagnation in annual arbitration filings cannot be linked to adverse Japanese case law. That developed in an internationalist, pro-arbitration spirit, evident through a comparative analysis for example with Australian case law. Other institutional barriers to arbitration remain, despite Japan’s new initiatives since 2018 demonstrating ‘localised globalism’. General, organisational and legal culture in Japan will likely keep mutually reinforcing economically rational motivations helping to curb costs and delays in dispute resolution, even as Japan now seeks to promote international arbitration through updated global models.

5. International Commercial Arbitration in Australia: What’s New and What’s Next?

Abstract: Not much had changed by 2013, after Australia amended in 2010 its International Arbitration Act 1974, incorporating most of the 2006 revisions to the UNCITRAL Model Law. There was no evidence yet of a broader anticipated ‘cultural reform’ that would make international arbitration speedier and more cost-effective. One dispute engendered at least five sets of proceedings, including a constitutional challenge. Case disposition statistics for Federal Court cases decided three years before and after the 2010 amendments revealed minor differences. Various further statutory amendments therefore seemed advisable to encourage a more internationalist interpretation. However, an updated analysis notes only a few minor revisions. There remains a significant step-up in annual cases filed under the Act, and some improved Federal Court case disposition times only since 2017. Despite generally more pro-arbitration case law, challenges remain in pushing international arbitration in Australia towards a more informal (especially time- and cost-effective) and global approach.

Part II: Crossovers from International Commercial to Investor-State Arbitration

6. In/formalisation and Glocalisation of International Commercial Arbitration and Investment Treaty Arbitration in Asia

Abstract: International (commercial) arbitration has experienced a dramatic diffusion from West to East, but ‘in/formalisation’ and ‘glocalisation’ tensions endure. Empirical research shows that delays and especially costs have been escalating world-wide, reflecting and promoting formalisation. This is not just due the growing volume and complexity of deals and disputes. It parallels a dramatic worldwide expansion of international law firms, and large home-grown law firms emerging in Asia. Confidentiality in arbitration exacerbates information asymmetries, dampening competition. Such developments are particularly problematic as large law firms have moved into investment treaty arbitration. Yet moves underway towards greater transparency in that burgeoning and overlapping field could eventually help reduce some of these problems. Somewhat ironically, they are likely to persist in the world of international commercial arbitration despite the growing concerns of users themselves, including a new wave of Asian companies that have started to resolve commercial disputes through international arbitration.

7. A Weather Map for International Arbitration: Mainly Sunny, Some Cloud, Possible Thunderstorms

Abstract: This Chapter helps anticipate the future trajectory of international arbitration by first revisiting how Anglo-American influence over the 1970s and 1980s contributed to the formalisation of international arbitration, generating costs and delays. Over the 1950s and 1960s, many cases involved investment disputes with host states, yet the normative paradigm was more global and informal. Despite arbitration’s ‘move East’ over the last 20 years, formalisation of international commercial arbitration persists, linked to information asymmetries. Investment treaty arbitration may exert counterbalancing influence, through its greater transparency. Yet it risks promoting even greater formalization, and there are serious doubts about its long-term viability, including in Asia. The main theoretical underpinning for international commercial arbitration has settled into a variant of ‘neoclassical’ theory in contract law, with some recent arguments for even greater formalisation, but investment treaty arbitration opens the possibility for more theoretical diversity and therefore debate about international arbitration’s foundations and future.

8. Confidentiality versus Transparency in International Commercial and Investor-State Arbitration in Australia and Japan

Abstract: Confidentiality is still widely seen as significant advantage of international commercial arbitration over cross-border litigation, especially in Asia. This is evident in most arbitral rules, and many arbitration statutes – including eventually in Australia. Yet no confidentiality is provided in Japan’s later adoption of the Model Law, although parties mostly choose local arbitral institutions so opt-in to their Rules, which have somewhat expanded confidentiality obligations since 2014. Another recent complication is growing public concern over arbitration procedures through (especially treaty-based) investor-state dispute settlement, particularly in Australia. Statutory amendments in 2018 reverse automatic confidentiality for Australia-seated arbitrations applying the 2014 UNCITRAL Transparency Rules. Yet such concerns may impede enactment of provisions extending confidentiality to court proceedings involving commercial arbitrations. Confidentiality could allow more informal and efficient arbitrations, but exacerbate information asymetries allowing service providers increase costs. Greater transparency is more justified (and increasingly found) in investment arbitration, implicating greater public interests.

Part III: International Investment Treaties and Investor-State Arbitration

9. Throwing the Baby with the Bathwater: Australia’s 2011-13 Policy Against Treaty-Based Investor-State Arbitration

Abstract: Treaties allowing investors to initiate arbitration claims directly against host states, for illegally interfering with cross-border investments, are increasingly common in Asia. Yet a centre-left government declared over 2011-2013 that Australia would no longer include such protections in future treaties. This risked undermining the entire investor-state arbitration system, and major then-pending treaty negotiations by Australia with Japan, China and Korea, significantly reducing FDI flows and having other adverse effects. This Chapter criticises the underlying cost-benefit analysis conducted in 2010 by an Australian government think-tank. The arguments and evidence are more nuanced, justifying more tailored and moderate changes for future treaties. Yet an interest-group analysis suggests surprisingly few public or private constituencies preferring such reforms, and the problem could spread around Asia. A sharp shift would indicate a more idiosyncratic, nation-centric rather than global approach, but with somewhat mixed effects regarding formalisation of the overall international arbitration field.

10. Investor-State Arbitration: Why Not in the Japan-Australia Economic Partnership Agreement?

Abstract: Japan signed a bilateral Free Trade Agreement with Australia in 2014, notably omitting investor-state dispute settlement (ISDS). Japan seems not to have offered enough to secure this extra protection for its firms’ investments in Australia, for the latter to risk domestic political controversy. Japan probably also hoped to obtain the protection through a mega-regional treaty– in fact achieved from 2019. The omission should also be understood in the wider context of Japan’s investment treaty practice. That was initially belated and flexible, but has become more pro-active since 2013. Japan’s practice overall presents another example of ‘localised globalism’. Japan’s treaties have also become more formalised as they have adopted more consistently US-style drafting since 2002 (like Australia). This greater detail may perversely result in to more costs and delays if and when the mostly ISDS-backed treaty provisions are invoked. Yet there are few claims formally pursued by Japanese investors, and none yet filed against Japan.

11. Investor-State Arbitration Policy and Practice in Australia

Abstract: Australia has investment treaties in force with 32 economies, all with investor-state dispute settlement (ISDS), except regarding New Zealand and the USA. Yet ISDS only started being debated politically as Australia signed its FTA with the US in 2004, and particularly around 2011 when a mega-regional treaty was being negotiated and Philip Morris Asia brought the first ISDS claim against Australia over tobacco controls. A centre-left Government over 2011-13 eschewed ISDS for future treaties, but centre-right governments reverted to allowing it on a case-by-case assessment, and the Greens’ ‘anti-ISDS’ Bill went nowhere. The debate belatedly raised awareness of how Australia’s domestic law provides some lesser investment protections than under international law. More bipartisanship has been emerging since 2019. Australia may therefore keep reverting to a more globalised approach towards ISDS, while continuing to target reforms that can reduce formalisation, particularly in the form of ISDS-related costs and delays.

12: Beyond the Pandemic: Towards More Global and Informal Approaches to International Arbitration

Abstract: Overall, this Book traces the trajectory of both international commercial arbitration and investor-state arbitration, especially since the 1990s, focusing on Australia and Japan in regional and global contexts. It demonstrates the usefulness of the dual themes or vectors of ‘in/formalisation’ and ‘glocalisation’ for understanding the past and for assessing future developments in international arbitration. Part I of this Chapter considers the longer-term impact of the COVID-19 pandemic from 2020. It speculates about the future for the observed proliferation of webinars, and the pandemic’s push towards virtual hearings or e-arbitrations, as well as further diversification of arbitral seats – including potentially for Australia and Japan. Part II ends more normatively with recommendations for more productive cooperation, bilaterally but also regionally, among academics, lawyers and arbitrators, judges and governments. It identifies key Asia-Pacific organisations and opportunities for promoting a global and somewhat more informal approach to international arbitration into the 21st century.

Guest Blog by Michael Hwang: Foreword, for Nottage, Ali, Jetin & Teramura (eds) New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (Wolters Kluwer, end-2020)

Written by: Dr Michael Hwang SC

This is a book which looks forward to possible future outcomes in the development of cross-border dispute resolution in the Asia-Pacific region, focusing on major economies in East and South Asia, as well as neighbouring countries such as Australia which are closely linked economically and geographically. The principal questions posed are: (a) whether international commercial arbitration can improve its attractiveness through law reform and case law development, overcoming criticisms about cost and delay; (b) whether growing concerns about ISDS issues in current investment treaties will lead to Asian states to become rule-makers in international investment law, rather than continue as rule takers; (c) whether innovations in existing or new fields can assist the Asia-Pacific region to develop international dispute settlement mechanisms further. It is therefore an exciting book that challenges existing procedures and frameworks for cross-border dispute resolution both in commercial as well as in treaty arbitration, rather than being another book which is simply descriptive of the existing mechanisms (valuable as such books might be).

There are clearly catalysts for change within the existing framework of dispute resolution in Asia, and several could be real game changers, like China’s Belt and Road initiative (examined in detail in Chapter 7) and the Singapore Convention on Mediation (Chapter 14). The team of writers specially assembled for this project have impressive credentials, led by the prolific and perceptive Professor Luke Nottage, and supported by several authors whom I have the privilege of knowing personally, and whose work I can wholeheartedly recommend as being worth reading, both for their knowledge and experience, but particularly for their insight.

The various authors are not simply writing about existing practices and procedures in the region, but are examining the situation on the ground with a critical eye, and making informed observations about where changes are needed and educated guesses about the chances of reforms being successful, and the consequences if they are not. It has been written in the time of COVID-19 and accordingly points out the special challenges to the field of international dispute resolution in this unprecedented situation. Those include whether lawyers can adapt to new technological solutions to overcome the difficulties of conducting virtual hearings, and whether players in the field of dispute resolution can continue to afford the time and cost of long drawn-out forensic procedures to resolve the inevitable disputes that have been caused by the pandemic, or whether there will be added impetus to use mediation in place of confrontation. There are also protectionist issues affecting the future of maintaining the rule of law in settling cross-border commercial disputes. Local judges might be influenced by the fact that certain apparent breaches of contract have been caused by events beyond the control of their local businesspeople, and the law may become stretched or even disregarded for what may be perceived to be a fairer commercial solution, when performance of a contractual obligation has been rendered impossible in the light of conditions brought on by the pandemic. Such situations could lead possibly to foreign judgments and/or foreign arbitration awards not being recognised or enforced, relying on an overly liberal interpretation of the doctrine of public policy to justify such non-enforcement.

There are also challenges arising from internal social and political challenges in certain Asian jurisdictions such as Malaysia and Hong Kong, where rule of law issues may affect investor confidence in those territories. This mistrust of the application of the rule of law will likely also lead to an international lack of confidence in the reliability of the dispute resolution system of the countries concerned, and Hong Kong in particular may find it difficult to maintain the hitherto proud record of independence and efficiency of its courts and arbitral tribunals. And there are legacy challenges which were there in several Asian countries before Covid-19 and remain as challenges to be overcome, without which their attractiveness as international investment and commercial centres will surely decrease if the legacy problems are not resolved.

The best introduction to this book is actually to start from the succinct final chapter (Chapter 15) jointly authored by Professors Anselmo Reyes, Shahla Ali and Nobumichi Teramura. This gives an excellent summary of the aims and contents of the 14 preceding chapters, and will highlight to readers which chapters might be of particular interest and therefore help determine in which order to read which chapters, although all 14 are worth reading.
I therefore congratulate Professors Nottage, Ali, Jetin and Teramura and their team of other authors on producing a timely and lively study. It will certainly stimulate ideas and discussion among its readers and perhaps also contribute to some positive changes in the jurisdictions which are the subject of this critical study.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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BIOS OF EDITORS AND CONTRIBUTORS

Dr Shahla Ali is Professor and Associate Dean (International) and Deputy Director of the LLM in Arbitration and Dispute Resolution at the Faculty of Law of the University of Hong Kong. Her research and practice center on questions of governance, development and the resolution of cross-border disputes in the Asia-Pacific region. Shahla is the author of Court Mediation Reform (Edward Elgar 2018), Governing Disasters: Engaging Local Populations in Humanitarian Relief (Cambridge University Press 2016), Consumer Financial Dispute Resolution in a Comparative Context (Cambridge University Press 2013), and Resolving Disputes in the Asia Pacific Region (Routledge 2010) and she writes for law journals in the area of comparative ADR. She has consulted with USAID, IFC/World Bank and the United Nations on issues pertaining to access to justice, peace process negotiation training and land use conflict resolution. She serves as a bilingual arbitrator (English/Chinese) with CIETAC, HKIAC (ADNDRC) and SIAC and has served on the IBA Drafting Committee for Investor-State Mediation Rules, the DOJ Mediation Regulatory Committee, the UN Mediation Roster and the FDRC Appointments Committee. Prior to HKU, she worked as an international trade attorney with Baker & McKenzie in its San Francisco office. She received her JD and PhD from UC Berkeley in Jurisprudence and Social Policy and BA from Stanford University.

Dr Bruno Jetin is Associate Professor and Director of the Institute of Asian Studies, University of Brunei Darussalam (UBD). His current work focuses on the ASEAN Economic Community, the One Belt One Road initiative, Chinese investments in Southeast Asia, and the impact of income distribution on growth in Asia. He is also an expert in the automobile industry. Before joining UBD, he was a researcher at the Institute for Research on Contemporary Southeast Asia (IRASEC, CNRS-MAEE, Bangkok) and Associate Professor at the University of Paris 13 Sorbonne Paris Cité, where he obtained his PhD in economics and was Deputy Director of the Research Center in Economics. He was also involved in promoting taxes on financial transactions as alternative sources for financing development as well as innovative regulation of global finance. Bruno’s recent publications include ASEAN Economic Community: A model for Asia-wide Integration? (Palgrave McMillan 2016, edited with Mia Mikic); Global Automobile Demand (Palgrave McMillan 2015, two edited volumes); International Investment Policy for Small States: The Case of Brunei, in International Investment Treaties and Arbitration Across Asia (Julien Chaisse and Luke Nottage eds., Brill 2018, with Julien Chaisse); One Belt-One Road Initiative and ASEAN Connectivity, in  China’s Global Rebalancing and the New Silk Road (B.R. Deepak ed., Springer 2018).

Dr Luke Nottage is Professor of Comparative and Transnational Business Law at the University of Sydney Law School, founding Co-Director of the Australian Network for Japanese Law (ANJeL) and Special Counsel at Williams Trade Law. He specialises in comparative and transnational business law (especially arbitration and product safety law), with a particular interest in Japan and the Asia-Pacific. Luke has or had executive roles in the Australia-Japan Society (NSW), the Law Council of Australia’s International Law Section, the Australian Centre for International Commercial Arbitration, and the Asia-Pacific Forum for International Arbitration. Luke is also a Rules committee member of the Australian Centre for International Arbitration (ACICA) and listed on the Panel of Arbitrators for the AIAC (formerly KLRCA), BAC, JCAA, KCAB, NZIAC, SCIA and TAI. Luke serves on Working Group 6 (examining arbitrator neutrality) for the Academic Forum on ISDS. He qualified as a lawyer in New Zealand in 1994 and in New South Wales in 2001, and has consulted for law firms and organisations world-wide (including ASEAN, the EC, OECD, UNCTAD and the Japanese government). His 16 other books include International Arbitration in Australia (Federation Press, 2010, eds) and International Investment Treaties and Arbitration Across Asia (Brill, 2018, eds). He is or has been Visiting Professor teaching and researching at universities throughout Asia, Oceania, Europe and North America.

Dr Nobumichi Teramura is an Associate at the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS) and Legal Consultant at Bun & Associates (Cambodia). He is the author of Ex Aequo et Bono as a Response to the Over-judicialisation of International Commercial Arbitration (Wolters Kluwer 2020), based on his doctoral thesis from the University of New South Wales that received a PhD Excellence Award when completed in 2018. Nobu also published recently in the Asian International Arbitration Journal (2019) and ASA Bulletin (2020), and has co-authored a chapter comparing Australia forthcoming in Larry di Matteo et al (eds) The Cambridge Handbook of Judicial Control of Arbitral Awards (Cambridge University Press, 2020). Specialising in commercial law, his current research interests include legal integration in Asia and legal development for South East Asian nations severely affected by colonisation and the Cold War, including Cambodia, Vietnam, Laos and Myanmar. He has teaching and research experience in Asia-Pacific jurisdictions including the Philippines, Australia, Japan, Taiwan, Hong Kong, Cambodia and Brunei.

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Vivienne Bath is Professor of Chinese and International Business Law at Sydney Law School and Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). Her teaching and research interests are in international business and economic law, private international law and Chinese law. She has first class honours in Chinese and in law from the Australian National University, and an LLM from Harvard Law School. She has also studied in China and Germany and has extensive professional experience in Sydney, New York and Hong Kong, specialising in international commercial law, with a focus on foreign investment and commercial transactions in China and the Asian region. Representative publications include: Vivienne Bath & Gabriël Moëns, Law of International Business in Australasia (2nd ed., Federation Press 2019); Overlapping Jurisdiction and the Resolution of Disputes before Chinese and Foreign Courts, 17 Yearbook of International Private Law 111-150 (2015-2016) and The South and Alternative Models of Trade and Investment Regulation – Chinese Outbound Investment and Approaches to International Investment Agreements, in Recalibrating International Investment Law: Global South Initiatives (Fabio Morosini & Michelle Ratton Sanchez Badin eds., Cambridge University Press 2018).

James Claxton is Professor of Law at Rikkyo University in Tokyo and Adjunct Faculty for the White & Case International Arbitration LL.M at University of Miami Law School, as well as an independent arbitrator and mediator. He teaches and researches in the fields of international investment law, business and human rights, and international dispute settlement. Previously, he was legal counsel at the International Centre for Settlement of Investment Disputes (ICSID) in Washington and attorney in the international arbitration practices of law firms in Paris. James regularly advises dispute resolution institutions in Asia and is a member of various working groups devoted to improving international dispute resolution systems.

The Hon Clyde Croft AM SC is Professor of Law at Monash University in Melbourne, as well as a commercial arbitrator and mediator. Until retiring in 2019 he was the judge in charge of the Arbitration List, the Taxation List, and a General Commercial List in the Commercial Court of the Supreme Court of Victoria. Prior to his Court appointment in 2009, he practiced extensively in property and commercial law and was an arbitrator and mediator in property, construction and general commercial disputes, domestically and internationally. Dr Croft was appointed Senior Counsel in 2000 and holds the degrees of BEc, LLB and LLM from Monash University, and PhD from the University of Cambridge. He has chaired the Expert Advisory Committee of the UNCITRAL National Co-ordination Committee of Australia (UNCCA) to support UNCITRAL Working Group II (Disputes) since May 2018. He represented the Asia Pacific Regional Arbitration Group (APRAG) at UNCITRAL from 2005 to 2010, revising the UNCITRAL Model Law and Arbitration Rules, and later co-authored A Guide to the UNCITRAL Arbitration Rules (Cambridge University Press, 2013). Dr Croft is a Life Fellow of the Australian Centre for International Commercial Arbitration (ACICA) and of the Resolution Institute (incorporating the Institute of Arbitrators and Mediators Australia), a Fellow of the Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ), the Chartered Institute of Arbitrators, the Australian Academy of Law and UNCCA.

Weixia Gu is Associate Professor at the University of Hong Kong Faculty of Law and Co-Chair of the American Society of International Law Asia-Pacific Interest Group. Her research focuses on international arbitration, dispute resolution, private international law and cross-border legal issues. She is the author, editor, and co-editor of 3 books, including The Developing World of Arbitration in the Asia Pacific (Hart, 2018) and Arbitration in China: Regulation of Arbitration Agreements and Practical Issues (Sweet & Maxwell, 2012). She is the author of more than 50 journal articles and her recent works appear in leading international and comparative law journals, such as the American Journal of Comparative Law, Vanderbilt Journal of Transnational Law, Cornell International Law Journal, among others. Her scholarship has been cited by the US Federal Court 11th Circuit, Texas Supreme Court, Hong Kong High Court, Singapore Law Gazette, and China Council for the Promotion of International Trade. Dr. Gu is an elected Member of the International Academy of Comparative Law, and sits on the governing councils of Hong Kong Institute of Arbitrators and China Society of Private International Law. She also serves as a panel-listed arbitrator in a number of leading arbitration institutions in China and Asia. Before joining the Faculty, she was selected as an Honorary Young Fellow to the New York University Law School in association with her Fulbright Award from the US Department of State.

Dr Hu Jiaxiang is Professor at the KoGuan Law School at the Shanghai Jiao Tong University. His research areas include public international law, international economic law and WTO law. He holds the degrees of BA and MA from Hangzhou University, MPhil in Law from Zhejiang University and PhD from the University of Edinburgh. In the past three decades, Professor Hu has published more than ten books and one hundred articles both in Chinese and English. He has been awarded various honours by the Ministry of Education of China and Shanghai Municipality for his excellence in teaching, and is currently leading several national research programmes.

Dr Jeanne Huang is Associate Professor at the University of Sydney Law School. She was previously Senior Lecturer at the University of New South Wales, and Associate Professor / Associate Dean at Shanghai University of International Business and Economics School of Law in China. She obtained her Doctor of Juridical Science (SJD) degree from Duke University School of Law in 2010. She was a Foreign Research Fellow at the Max Planck Institute for Comparative and International Private Law in Hamburg, and also had research experience at The Hague Academy of International Law, and the Paris-based Academy of International Arbitration Law. Jeanne teaches and researches in the fields of private international law, e-commerce regulation, international investment law and dispute resolution (international litigation and arbitration). She has published four books including Interregional Recognition and Enforcement of Civil and Commercial Judgments: Lessons for China from US and EU Laws (Hart, 2014) and her articles have appeared in many peer-reviewed law journals, with extensive competitive funding include from the China National Social Science Fund. In 2015, she won the First Prize of Excellent Scholarship awarded by the China Society of Private International Law and the Nomination Award of the Dong Biwu Prize for Youth Research in Law. Jeanne serves as an arbitrator at the Hong Kong International Arbitration Center, Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center), Nanjing Arbitration Commission and Xi’an Arbitration Commission. She also serves as expert witness on issues of private international law and Chinese law in courts in Australia and the US.

Dr Michael Hwang SC is a Singapore-based international arbitrator. He was the Deputy Chief Justice of the Dubai International Financial Centre (DIFC) Courts upon its establishment in 2005, and subsequently appointed Chief Justice in 2010, retiring at the end of 2018. Throughout that period, he has continued practising as an international arbitrator in commercial and treaty arbitrations. He has written two volumes of essays on international arbitration and international dispute resolution respectively, and was awarded an honorary LLD from the University of Sydney.

Albert Monichino QC is a Melbourne-based barrister and arbitrator, with over 25 years of experience in resolving commercial disputes domestically and internationally. He was appointed Senior Counsel in 2010, and is a former Vice President (Convenor) and Co-Chair of the Arbitration and ADR Section for the Commercial Bar Association of the Victorian Bar (COMMBAR). Albert is a Chartered Arbitrator and Past President of the Chartered Institute of Arbitrators Australian Branch (CIArb, 2014-17), and is a Fellow of CIArb, ACICA, the Resolution Institute and the Singapore Institute of Arbitrators. He writes extensively on international commercial arbitration in Australia and the Asia-Pacific, including an annual Australian survey for the Australian Dispute Resolution Journal.

Anselmo Reyes SC practises as an arbitrator. He was Professor of Legal Practice at Hong Kong University from October 2012 to September 2018. Before that, he was a judge of the Hong Kong High Court from September 2003 to September 2012, when he was in charge of the Construction and Arbitration List (2004-8) and the Commercial and Admiralty Lists (2008-12). He was Representative of the Hague Conference on Private International Law’s Regional Office Asia Pacific from April 2013 to July 2017. He became an International Judge of the Singapore International Commercial Court in January 2015.

Dr Jaivir Singh is Professor at the Centre for the Study of Law and Governance, Jawaharlal Nehru University, having previously taught at the University of Delhi. Trained as an economist at the Delhi School of Economics, University of Delhi, his research work aims at an interdisciplinary exploration of the interaction between the law and the economy. He has published on diverse topics including the Indian Constitution, Regulation, Labour Law, Competition Law, Corporate Law and International Investment Treaties.

Dr S.I. Strong is an Associate Professor at the University of Sydney Law School, specialising in international dispute resolution and comparative law, particularly international commercial arbitration and large-scale (class and collective) suits. Prior to joining the University of Sydney, she taught at the Universities of Cambridge and Oxford as well as Georgetown Law Center and the University of Missouri. Dr Strong is an experienced practitioner, having acted as Counsel at Baker & McKenzie after working as a dual-qualified lawyer (US attorney and English solicitor) in the New York and London offices of Weil, Gotshal & Manges. She has published over 130 award-winning books, chapters and articles in Europe, Asia and the Americas, including Legal Reasoning Across Commercial Disputes: Comparing Judicial and Arbitral Analyses (anticipated 2021), Arbitration of Trust Disputes: Issues in National and International Law (2016), and Class, Mass, and Collective Arbitration in National and International Law (2013) fromOxford University Press as well as International Commercial Arbitration: A Guide for U.S. Judges (2012) from the Federal Judicial Center. Dr Strong’s scholarly work has been translated into Spanish, French, Russian and Chinese and has been cited as authority by numerous state and federal courts and international tribunals. She Strong sits as an arbitrator and mediator on a variety of international commercial and trust-related matters. 

Ana Ubilava is a Research Assistant and PhD candidate at the University of Sydney Law School, where she is in the final stages of completing a thesis on investor-state mediation. She has published on international dispute resolution in several periodicals including the Journal of World Investment and Trade. Ana is also Executive Coordinator of the Australian Network for Japanese Law (ANJeL).

The Hon Marilyn Warren AC QC is a Vice-Chancellor’s Professorial Fellow at Monash University, where she is a member of its Global Leaders Summit, and teaches postgraduate commercial law and international arbitration. She was a long-serving Chief Justice of the Supreme Court of Victoria (2003-2017), and earlier on that Court (1998-2003) included service as the Judge in Charge of the Commercial List and the Corporations List (now combined as the Commercial Court). Professor Warren was a foundation Council member of the Asian Business Law Institute in Singapore. She now also sits as a domestic and international commercial arbitrator, and is a member of the Dawson Chambers Senior Arbitrator Group at the Victorian Bar (where she became Queen’s Counsel in 1997). 

A. Vijayalakshmi Venugopal is Senior Lecturer at Taylor’s University Law School in Malaysia. Her teaching and postgraduate supervisory experience includes WTO law, international dispute resolution, international sale of goods and intellectual property law. She was a visiting lecturer at the University of Rotterdam Business School. She holds Masters degrees in law and educational psychology, and has presented conference papers in these fields. She is the author of three books, and articles in peer-reviewed law journals.

Dr Brett Williams, an Australian Legal Practitioneris the principal of Williams Trade Law and an Honorary Senior Lecturer at the University of Sydney Law School. His legal practice specialises in the law of the World Trade Organization and of bilateral and regional trade agreements, including representation in WTO dispute settlement, accession issues, and also trade issues under Australian law. He has taught WTO law at Sydney Law School since 2001 and is a Research Affiliate of both the Sydney Centre International Law and the Centre for Asian and Pacific Law at the University of Sydney. His publications include the co-edited book China and the World Trade System (Cambridge University Press, 2003), building on his PhD research, and articles on WTO negotiations on agricultural trade, China’s WTO accession, trade in services and innovations in dispute settlement mechanisms in trade agreements. Brett also serves on the Editorial Board of the Australian International Law Journal. He has held various professional positions, including on the Executive of the International Law Section of the Law Council of Australia (2012-2016) and as inaugural co-chair of the International Economic Law Interest Group of the Australia New Zealand Society of International Law (2010-2012).

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

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

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

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

1. Learning from Our New Storyline

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

3. Emerging from the Pandemic into Another Narrative World

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[31] Furedi 2020, op cit.

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

[10] Ibid.

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

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

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

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

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

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

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

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

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

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

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

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

Speakers’ Profiles

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

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

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

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

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


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

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

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

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

Guest Blog: Chief Justice Bathurst’s launch of Asian Law books

[Ed: The Hon TF Bathurst AC, Chief Justice of New South Wales, kindly launched two Asian law books at a CAPLUS seminar hosted by Herbert Smith Freehills in Sydney on 28 November 2019: ‘Contract Law in Japan‘ by Hiroo Sono, Luke Nottage, Kenji Saigusa and Andrew Pardieck (Wolters Kluwer 2019) and ‘ASEAN Consumer Law Harmonisation and Cooperation‘ by Luke Nottage, Justin Malbon, Jeannie Paterson and Caron Beaton-Wells (CUP 2019). Other discussants included Sydney Business School Adjunct Professor Donald Robertson (expert in international contract law) and Sydney Business School Professor Gail Pearson (expert in comparative consumer law). The Chief Justice’s remarks are uploaded on the Supreme Court website and are reproduced below with permission.]

1. I would like to begin by acknowledging the traditional custodians of the land on which we meet, the Gadigal people of the Eora nation, and pay my respects to their Elders, past, present and emerging.  It took a long time for our legal system to recognise the unique connection with this land which they have under their ancient law and customs.  When it did, a door was opened to a greater understanding which had the potential to enrich both traditions and heal some of the wounds within our community inflicted by more unjust times.

2. In this way, our history demonstrates, rather starkly, the necessity for a dialogue between different systems of law.1  A dialogue offers us the opportunity to take a glimpse into the workings of an unfamiliar system, and, in so doing, see our own in a different light.  It may help us better appreciate the shortcomings and deficiencies of our own approach to important legal questions, and benefit from an understanding of how others have approached them.  In short, it is never enough to compare two systems simply by pointing out the differences.  It is necessary to go further, and reflect on how and why those systems differ, and what they can learn from each other.

3. The two books which we have gathered to launch today are fine examples of scholarly works within this tradition.  Neither could be described solely as a work of “comparative law”, since neither has a narrow, solely comparative focus.  For example, Contract Law in Japan2 seeks to present Japanese contract law largely on its own terms, although this inevitably involves occasional reference to its French, German, and even American progenitors.  In the same vein, ASEAN Consumer Law3 aims to treat the consumer law of ASEAN as a unified, or at least, unifying, entity, rather than as a simple agglomeration of the laws of its member states – although, as I quickly learned while reading, this is something much easier said than done.  

4. On their own merits, both works would stand as comprehensive guides to the substantive law of the jurisdictions which they cover.  However, it would be disingenuous for me to deny that both works invite and encourage the uninitiated reader, such as myself, to whom the contract law of Japan and the consumer law of the members of ASEAN has long remained a mystery, to draw their own comparisons with the law in their home jurisdiction, which in my case is, of course, Australia.  In my brief remarks this evening, I would like to touch on some of the connections and contrasts between Australian, Japanese, and ASEAN law which appear from both works.  To make such a large task feasible given the scope of the coverage in each book, I will focus on only two themes which I think have particular relevance to Australian law at present.

5. The first theme is concerned with the extent to which it is appropriate for a legal system to define causes of action, or otherwise enforce or restrict legal rights, based on broad, normative standards of conduct.  In Australian law, we might take as an example the statutory prohibitions on “conduct that is, in all the circumstances, unconscionable”.4  No further explanation of the nature of “unconscionable” conduct is given, although the legislation does list a sizeable number of factors which might be relevant.5  Ultimately, it is left to the court to determine whether the conduct in a particular case is “against conscience by reference to the norms of society”,6 or more prosaically, whether it was contrary to “accepted community standards”.7  

6. Now, while this does not simply amount to allowing a judge to proscribe conduct which they deem to be “unfair” or “unjust”,8 it may be thought to come closer than many other areas of law permit.  We can see the consequences in the recent decision of the High Court in ASIC v Kobelt,9 where the Court split 4:3 on the issue of whether the provision of an informal system of credit by the owner of a general store in a remote, Indigenous community was “unconscionable”.  The breadth of the standard makes it difficult to attribute the difference in opinion between the members of the Court to any legal error.  Rather, the distinction between the majority and the minority appears to lie in their contrasting views about what the “norms of society” or “accepted community standards” actually require.10  Put this way, difference in opinion ceases to be unexpected, and perhaps, becomes inevitable.11

7. This creates something of a dilemma for the law.  If the “norms of society” or “accepted community standards” are so subtle and esoteric in their application to a particular set of circumstances that even some of the most experienced legal minds in the country cannot agree, then ought the final decision to really remain in their hands?  In these circumstances, it would not be out of the question to believe that the legitimacy of the conduct should really be the subject of consideration by the representatives of the people in the legislature.  A provision which is clearly directed to address a particular situation puts beyond doubt that a matter has been considered by the legislature.  It defines its own standard by which the relevant conduct is to be judged.  To be sure, any statutory provision may be capable of giving rise to its own difficulties of interpretation, but at least these problems are susceptible to the application of more familiar legal reasoning.12  

8. It seems to me that this is an approach which has, to some extent, been adopted by Japanese contract law in analogous circumstances.  Rather than relying on a broadly-expressed criterion of “unconscionable conduct” to define the situations in which a court would be prepared to set aside a consumer contract, it instead states the particular circumstances which will give rise to such a claim.13  One such example, which seems to reflect the narrower, general law doctrine of “unconscionable conduct” in this country,14 is where “a business stirs up [the] excessive anxiety of a consumer without enough ability to judge due to [their] old age or mental disorder about [their] health or living conditions”.15  There are other similar examples, which spell out in some detail the types of conduct which are not regarded as acceptable business practice in Japan when it comes to consumer contracts.16  

9. It is worth noting that these exceptions for consumer contracts were introduced even though Article 90 of the Japanese Civil Code provides that a contract is void if it is “against public policy”,17 perhaps a phrase of even wider import than “unconscionable conduct”.18  Even though the express exceptions for consumer contracts could very well have been analysed as being “against public policy”,19 it was still felt necessary to craft particular provisions to deal with these situations.  It could well be thought that such an approach improves certainty, and promotes greater democratic legitimacy.  

10. While there can be a need to resort to general standards of conduct to ensure that unforeseen and undesirable activities do not escape the supervision of the law, it seems to me that there is much to be said for resisting the temptation to make these standards the “first port of call” for regulation.20  I think the Japanese approach to the grounds on which a consumer contract may be set aside for what we might describe as “unconscionable conduct” provides an interesting perspective on this issue.  There is much more that could be said about this topic, and, no doubt, Japanese law might have difficulties of its own with overbroad standards of conduct.  But the utility of the comparison should be apparent.  It illustrates the different approaches which may be taken to a complex issue, and suggests alternative ways of resolving them.  

11. The second theme I would like to touch on this evening is concerned with the role which regulatory bodies ought to play in policing and enforcing what might broadly be described as “consumer protection legislation”.  Again, this is something that has been a live issue in Australia since the Hayne Royal Commission delivered its Interim Report in 2018, which strongly criticised how ASIC approached the enforcement of the financial services legislation for which it was responsible.21  The Report noted that ASIC’s “starting point” for responding to misconduct appeared to have been to attempt to resolve the issues by agreement and negotiation with the entity concerned,22 with a focus on remediation of harm caused rather than sanction for the misconduct itself.23  In words which bear repeating in full, the Report stated:

“This cannot be the starting point for a conduct regulator.  When contravening conduct comes to its attention, the regulator must always ask whether it can make a case that there has been a breach and, if it can, then ask why it would not be in the public interest to bring proceedings to penalise the breach.  Laws are to be obeyed.  Penalties are prescribed for failure to obey the law because society expects and requires obedience to the law.”24

12. The rhetoric here is certainly characteristic of the direct and forthright attitude of the Commissioner.  It is compelling and persuasive, with seemingly inexorable logic.  However, I think it has somewhat directed attention away from an important anterior question:  to what extent was ASIC conceived to be a “conduct regulator” prior to the Royal Commission?  It must be admitted that now, in light of the Commission, public opinion overwhelmingly favours ASIC taking an active role as a “conduct regulator”.  And ASIC has taken heed.  Shortly after the publication of the Interim Report, in response to its criticisms, ASIC adopted what has been compendiously described as the “Why Not Litigate?” approach,25 placing enforcement squarely at the forefront of its responsibilities, although it has been quick to point out that this is by no means equivalent to a “litigate first, and ask questions later” approach for any breach, no matter how trivial.26  Was this always intended to be how ASIC operated?

13. Interesting light is shed upon this question by Mr Alan Cameron AO, a former Chair of ASIC and its predecessor from 1993 to 2000, in an address he delivered some months before the delivery of the Interim Report,27 although at a time when many of the shortcomings in the financial services sector had already been exposed in hearings before the Commission.  He reflected on the fact that, from its inception, ASIC has never seen itself solely as an enforcement body.  It has also regarded itself as having a “market facilitation role”,28 and, I might add, with some justification, because this objective is still reflected prominently in its enabling legislation today.29  Indeed, even as late as 2014, in a “Statement of Expectations for ASIC” published by the Government, enforcement was not mentioned as part of its “key role”, or even as one of its objectives.30  

14. It is striking the degree to which the same concerns and ambiguity about the proper role of a regulator appear in the topics discussed in ASEAN Consumer Law.  While no single chapter discusses the work of consumer protection regulators as its primary focus, it is a background theme which recurs with surprising frequency in other chapters when discussing the efficacy of the substantive law.  Importantly, one gets the sense that this results from much the same concerns which have motivated the discussion about the role of ASIC as a regulator in Australia:  despite the introduction of relatively strong protections for consumers “on the books” in most members of ASEAN in recent years,31 there has been little tangible evidence that these protections have translated into better outcomes for consumers.  

15. Even for those countries which have had consumer protection legislation for some time, there is often a dearth of filings in courts attempting to utilise these laws.32  Thailand appears to be an exception to this trend, but even then, there are few cases in which a consumer protection claim has proceeded to reported judgment.  Most are settled.33  Part of the reason for the slow uptake might be attributed to the lack of an effective and well-resourced regulator to educate the public about their rights as consumers, and where necessary, to step in and take appropriate enforcement action.34  In many countries, it falls to consumer advocacy NGOs to raise awareness about consumer protection issues, in the absence of better-resourced government programs.35  It should be no surprise that Thailand, with its higher filing rate, is also the country with the greatest consumer NGO activity.36  

16. Now, it may be accepted that there are significant differences between the level of economic development between most members of ASEAN and Australia.  Nevertheless, the experience of ASEAN ought to remind us that legislation needs to be coupled with an appropriate enforcement strategy if it is to be effective.  Introducing legislation to prohibit undesirable conduct is one thing.  Translating that legislation into practical outcomes for consumers is another.  And, ultimately, it is that second step which proves difficult.  As we have seen, perhaps there were grounds for believing that ASIC’s former approach was too lenient.  But it is a matter of balance.  There is always a risk that things may swing too far in the other direction.  

17. The themes I have discussed this evening are just two small examples of the way in which contemporary legal debate in Australia can be seen to overlap with those in other jurisdictions.  This focus might have given the mistaken impression that I believe that comparative law is only useful for what it can tell us about our own system of law.  This could not be further from the truth.  But, I firmly believe that the first step in motivating policy-makers and lawyers to engage with comparative law is to highlight the connections and similarities which we have with other systems.  It is only then that we can demonstrate that comparison opens a door to a dialogue from which both systems can benefit.

18. Both of the works being launched tonight are excellent examples of how such scholarship can incisively deconstruct unfamiliar legal systems and make them more accessible to a wider audience.  And, what is more, each clearly exposes and explains the challenges which each system faces on its own terms.  This is an admirable achievement, and one for which the authors deserve our congratulations.

19. Thank you.

Footnotes:

1  See also Uwe Kischel, Comparative Law (Oxford University Press, 2019) 46 ff.

2  Hiroo Sono et al, Contract Law in Japan (Wolters Kluwer, 2019).

3  Luke Nottage et al, ASEAN Consumer Law Harmonisation and Cooperation: Achievements and Challenges (Cambridge University Press, 2019).  

Competition and Consumer Act 2010 (Cth) sch 2 (‘Australian Consumer Law’) s 21(1); Australian Securities and Investments Commission Act 2001 (Cth) (‘ASIC Act’)s 12CB(1).

Australian Consumer Law s 22(1); ASIC Act s 12CC(1).

ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90 at [41] (Allsop CJ, Jacobson and Gordon JJ); ACCC v Medibank Private Ltd [2018] FCAFC 235at [239] (Beach J); ASIC v Kobelt [2019] HCA 18 at [57] (Kiefel CJ and Bell J), [87] (Gageler J).

Ipstar Australia Pty Ltd v APS Satellite Pty Ltd [2018] NSWCA 15 at [195] (Bathurst CJ); ASIC v Kobelt [2019] HCA 18 at [59] (Kiefel CJ and Bell J).

Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557 at 583 [120] (Spigelman CJ); cf ACCC v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 64 [11] (Gleeson CJ).

9  [2019] HCA 18.

10  Ibid [75]–[79] (Kiefel CJ and Bell J), [101]–[111] (Gageler J), [124]–[129] (Keane J), [235]–[240] (Nettle and Gordon JJ), [296]–[302] (Edelman J).

11  Ibid [95] (Gageler J).

12  Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421 at 436–7 [58]–[59] (Allsop CJ), 442–3 [85]–[87] (Edelman J); cf ASIC v Kobelt [2019] HCA 18 at [267]–[268] (Edelman J).

13  Sono et al (n 2) 79 [168] ff.

14  See Thorne v Kennedy (2017) 263 CLR 85 at 102–3 [37]–[39] (Kiefel CJ, Bell, Gageler, Keane and Edelman JJ). 

15  Sono et al (n 2) 80, quoting art 4(3)(v) of the Consumer Contract Act (Japan); cf Blomley v Ryan (1956) 99 CLR 362 at 405 (Fullagar J).

16  See also Sono et al (n 2) 83–4.

17  Civil Code (Japan) art 90.

18  Cf Sono et al (n 2) 81–3 .

19  See ibid 83 [182]–[183].

20  Attorney-General (NSW) v World Best Holdings Ltd (2005) 63 NSWLR 557 at 583 [121] (Spigelman CJ).

21  See Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Interim Report (September 2018) vol 1, ch 8.

22  Ibid 277.

23  Ibid 296.

24  Ibid 277 (emphasis original).

25  Australian Securities and Investments Commission, ‘Update on Implementation of Royal Commission Recommendations’ (Paper, February 2019) 3.

26  See, eg, Commissioner Sean Hughes, ‘ASIC’s Approach to Enforcement after the Royal Commission’ (Speech, 36th Annual Conference of the Banking and Financial Services Law Association, 30 August 2019).  

27  Alan Cameron, Reflections on Regulators, Without Casting Aspersions’ in Pamela Hanrahan and Ashley Black (eds), Contemporary Issues in Corporate and Competition Law (LexisNexis, 2019) 165.  The speech was originally delivered on 26 June 2018.

28  Ibid 167.

29  ASIC Act s 1(2).  

30  Australian Government, ‘Statement of Expectations for ASIC’ (April 2014) <https://www.asic.gov.au/about-asic/what-we-do/how-we-operate/accountability-and-reporting/statements-of-expectations-and-intent/statement-of-expectations-april-2014/>; see also Cameron (n 26) 173.

31  See Nottage et al (n 3) chs 3–4.

32  Ibid 163–73,.

33  Ibid 167.

34  Ibid 240–1, 246–7.

35  Ibid 365–6.

36  Ibid 165–7.