Asia-Pacific regional architecture – Page 6 – Japanese Law and the Asia-Pacific

Wa and the Japan International Mediation Centre – Kyoto

Written by: (Kobe University Law Faculty Prof) James Claxton & Luke Nottage
[This is an non-hyperlinked / unfootnoted version of a posting published by the Kluwer Mediation Blog]
More than 1,400 years ago, Japan codified Confucian and Buddhist approaches to governing in Prince Shotoku’s Constitution, whose first article provides that “[h]armony should be valued, and quarrels should be avoided.” The underlying principle, wa (harmony), was promoted and reflected in the fabric of Japanese society and may have contributed to a persistent preference for non-adversarial means of settling disagreements. Mediation, in particular, has a storied history in Japan and continues to play an important role in the resolution of disputes. But most mediation services have been provided by the government or courts, despite a 2004 statute encouraging certification and expansion of privately-supplied Alternative Dispute Resolution (ADR) services, as part of a broader suite of justice system reforms to make Japan’s legal system more tangible in everyday life.
It is in the context of that contemporary challenge as well as the longer-standing spirit of wa that the Japan International Mediation Centre-Kyoto (JIMC-Kyoto) will soon begin operations. The JIMC-Kyoto is part of a broader initiative to breath fresh life into international disputes services in Japan. The official start of business awaits final governmental approval, which should come early this year.

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NZ renounces ISDS: Deja vu?

we have written to leaders in both New Zealand and Australia recommending a shift towards introducing an EU-style two-tier investment court model in lieu of traditional ISDS, as a compromise way forward

The new Labour-led coalition government in New Zealand announced this month that it would resist investor-state dispute settlement (ISDS) provisions in future Free Trade Agreements or investment treaties.
This outcome and local political circumstances bear some remarkable parallels with the situation in Australia over 2011-2013, when the centre-left Gillard Labor coalition government adopted a similar stance until the new centre-right government resumed the policy including ISDS on a case-by-case assessment. Australia was then able to agree to major bilateral FTAs with China and Korea, as well as to the Trans-Pacific Partnership Agreement.
The [unfootnoted] posting below with Amokura Kawharu from UAuckland, a version of which will be published in the Kluwer Arbitration Blog, elaborates on these developments. We note how New Zealand nonetheless subsequently reached agreement in principle on a revised TPP, but will face challenges maintaining a wholly anti-ISDS stance in the ongoing (ASEAN+6) Regional Comprehensive Economic Partnership negotiations. As a compromise way forward, we have written letters to leaders in New Zealand and Australia suggesting the substitution of an EU-style investment court mechanism.
For more background and our main paper referred to below, please see:
Kawharu, Amokura and Nottage, Luke R., Models for Investment Treaties in the Asian Region: An Underview (February 21, 2017). Arizona Journal of International and Comparative Law, 2017 Forthcoming; Sydney Law School Research Paper No. 16/87. Available at SSRN: https://ssrn.com/abstract=2845088

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Australia – in Asia?

A persistent question, with unfortunate (geo-)political overtones, is whether Australia can be conceptualised as part of “Asia”, as opposed to more circumscribed “Australasia”, or the very broad “Asia-Pacific” (including all Pacific / Rim countries, including the Americas).
This has practical importance for my 21-chapter book forthcoming with Brill, co-edited with Julien Chaisse on “International Investment Treaties and Arbitration Across Asia“. We decided to include a chapter on Australia and New Zealand as a potential “collective middle power” that may influence the trajectory of international investment (treaty) law in the region.
The issue had earlier cropped up in the CUP book on “Independent Directors in Asia“, co-edited with Harald Baum and Dan Puchniak (and with enormous input also from Souichirou Kozuka), which is finally now in the type-set page proof stage and so should be published by November 2017. My chapter with Fady Aoun comparing Australian developments, which influenced Hong Kong in key respects with further ramification, ended up being placed after country studies in Asia (in the narrow or traditional sense) in the “Alternative Perspectives and Conclusions” part of the book. Below I reproduce [and lightly update] my memo of January 2015 arguing why it makes sense to consider Australia as part of Asia, especially for projects such as these.

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International Arbitration Law Reform: Australia … Japan, Asia-Pacific?

The Australian parliament is now reviewing a Bill including four further amendments to its International Arbitration Act, after enacting two other sets of amendments in 2015. These mostly correct for drafting errors or uncertainties that have become apparent since much more extensive amendments in 2010, which included almost all the 2006 revisions to the 1985 UNCITRAL Model Law template originally adopted by Australia in 1989. By contrast, Japan adopted the 1985 UNCITRAL Model Law template only in 2003, as part of a much broader package of justice system reforms, and has not updated its legislation at all since 2003.
Such diverging approaches across the region are examined in a forthcoming book on “The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific“, co-edited for Hart by Hong Kong University Professors Gu Weixia and Anselmo Reyes (also formerly a judge). I was pleased to be invited to become a secondary author for the Japan chapter, with Nobumichi Teramura, a Doshisha University graduate now completing his PhD at UNSW. His main supervisor, Prof Leon Trakman, is authoring the chapter on Australia.
Below is my outline of the recent and pending amendments in Australia, with an abridged version (with hyperlinks to further reference material) published on 13 May 2017 by the Kluwer Arbitration Blog.

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Book Review – Dean Lewis, ‘The Interpretation and Uniformity of the UNCITRAL Model Law on International Commercial Arbitration’

Japan adopted the 1985 version of the Model Law of the United Nations Commission on International Trade Law as the basis for its revamped Arbitration Act of 2003, as outlined in my commentary co-authored with JCAA Arbitration Dept GM and erstwhile ANJeL Visitor Prof Tatsuya Nakamura. As such, it is instructive to compare how successful the Model Law has been in promoting uniformity in other Asia-Pacific jurisdictions, including Australia, Hong Kong and Singapore, as analysed in the book reviewed below. Other researchers may be inspired to adopt or adopt its approach to test uniformity in other Model Law jurisdictions such as Japan.

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“International Investment Treaties and Arbitration Across Asia” – Julien Chaisse & Luke Nottage (eds)

[Updated: 25 July 2017]
The future of investment treaties, especially as part of “mega-regional” free trade agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), has become very uncertain given the isolationist volte-face of the Trump Administration. This project explores the historical and likely future trajectory of investment treaties, including the sometimes politically controversial Investor-State Dispute Settlement (ISDS) procedure, especially in the rapidly growing and diverse Asia-Pacific region. The book focuses on the extent to which Asia-Pacific economies (individually and/or through sub-regional groupings like ASEAN, the Association of Southeast Asian Nations) have been or are more likely to become “rule makers” rather than “rule takers” in international investment law, and in what sense.
The following book proposal, accepted in July 2017 by Brill for publication in its Nijhoff International Investment Law Series, is based mainly on papers presented at conferences comparing contract- and treaty-based arbitration of investment disputes in ASEAN member states (held in Bangkok in July 2016) and across the wider Asian region (held at USydney in February 2017, with a summary by Ana Ubilava available via Kluwer Arbitration Blog) and reproduced (without hyperlinks) on this Blog.

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International Investment Arbitration Across Asia: A Symposium

By: Ana Ubilava (PhD in Law student, University of Sydney)
[This is a non-hyperlinked version of the posting at http://kluwerarbitrationblog.com/2017/03/01/international-investment-arbitration-across-asia-symposium/]
On 16 February 2017, the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS) and the Sydney Centre for International Law (SCIL) co-hosted a symposium on the theme: “International Investment Arbitration Across Asia”. The symposium, sponsored also by the Sydney Southeast Asia Centre and Herbert Smith Freehills, brought together leading experts of international investment law from Southeast Asia, North Asia, India and Oceania. The symposium re-examined the historical development of international investment treaties in the Asian region, focusing on whether and how the countries may be shifting from rule takers to rule makers. A focus was on the ASEAN(+) treaties, including the (ASEAN+6) Regional Comprehensive Economic Partnership (RCEP) at an advanced stage of negotiations, and the Trans-Pacific Partnership (TPP) Agreement, which was discussed more broadly as an urgent topic in the wake of the change of direction by the US under President Donald Trump’s administration. Participants at the symposium also elaborated on the experiences of Asian countries with ISDS mechanisms, and the attitude towards ISDS before and after first major investor-state arbitration (ISA) cases in the region. The many speakers and discussants for the event further explored possible future trajectories of international investment treaty policymaking of Asia-Pacific countries, especially China, Japan, Korea, India, Australia and New Zealand.

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Guest Blog – “The implications of Trump’s denunciation of the TPP”

[Below is a reaction to this news from the US on 22 November, from ARC discovery project co-researcher and Prof Leon Trakman, reproduced with permission from the forthcoming Newsletter of the International Law Association’s Australian branch. The Newsletter will also include my related but broader AFIA Blog posting with JNU A/Prof Jaivir Singh, “Does ISDS Promote FDI? Asia-Pacific Insights from and for Australia and India”.]

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Are US Investors Exceptionally Litigious with ISDS Claims?

[A version of this posting appears on Kluwer Arbitration Blog on 14 November 2016.]
Critics of the Trans-Pacific Partnership (TPP) free trade agreement, and investor-state dispute settlement (ISDS) protections more generally, have often argued that a particular concern is that the US is not only a large source of FDI, but that it is ‘the nation whose corporations use ISDS the most’ (referring to ANU’s Professor Thomas Faunce). A recent paper by ANU’s Dr Kyla Tienhaara for the ‘GetUp’ campaign in Australia, in the context of ongoing parliamentary inquiries into ratifying the TPP, contends that Australia is at risk because US investors have brought multiple claims against Canada. (By contrast, Charles-Emmanuel Cote points out that ‘damages effectively awarded or agreed to in settlement so far [amount to] US$147.5 million, or a mere 0.05 percent of all US investment’ into Canada.) More generally, Tienhaara argues :

The biggest users of ISDS are US multinational corporations. This means that entering into a trade deal with the US that includes ISDS provisions – such as the TPP – places a country at high risk of ISDS suits.

The inference is that Americans are particularly ‘litigious’ in the field of investment treaty claims – perhaps like they are purported to be in civil litigation in their home courts. In fact, empirical research into comparative civil dispute resolution patterns had long pointed out that a representative state within the US (in terms of urban/rural population mix, such as Arizona) has fewer filings per capita than countries such as Israel and Germany [Nottage & Wollschlaeger ‘What Do Courts Do?’ [1996] NZLJ 369].
Table A and Figure A-1 in the attached version of this posting confirm that investors from the US had indeed lodged the most ISDS claims by end-2015 (138). Yet, on a per capita basis (per 100,000 people in the home state), US investors are historically less litigious compared to investors from eleven other countries whose investors have filed considerable numbers of ISDS claims. Those states are all in the EU (including Belgium and Luxembourg, which generally conclude investment treaties collectively and whose investors have filed the most claims per capita), except for Switzerland (whose investors become the fourth most litigious) and Canada (the fifth most litigious home state). As further indicated in Table A and Figure A-2, if we group together most of these EU states their investors’ per capita ISDS claim rate is also higher than that for US investors.

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“International Investment Arbitration Across Asia”: USydney, 16 February 2017

Treaty-based investor-state arbitration (or ISDS more generally) is an increasingly topical issue, as FDI flows continue to grow, especially across Southeast Asia and the rest of the Asian region, and host states have begun to experience some claims brought by disgruntled foreign investors.
This conference organised for Thursday 16 February 2017 by the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS) and the Sydney Centre for International Law (SCIL), with sponsorship from Herbert Smith Freehills, builds on the lively and timely conference funded by Chulalongkorn University’s ASEAN Studies Centre in Bangkok on 18 July 2016, which compared the experiences and policy debates in each of the ten ASEAN member states. Those country reports are now being revised for review and eventual publication in a leading journal, with versions then being combined with papers on pan-Asian investment treaties and arbitration to be presented on 16 February 2017, for a co-edited book published by the same legal publisher.
This upcoming conference will bring together leading experts from Southeast Asia, North Asia, India and Oceania, including several from institutional partners of USydney. It will help round off a major cross-institutional and interdisciplinary research project into international investment dispute management more generally, funded by the Australian Research Council since 2014. The annual SCIL “International Law – Year in Review” symposium will also take place the next day, on Friday 17 February 2017.

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