Category: Dispute resolution

“Japan is Back” – for International Dispute Resolution Services?

Written by: Luke Nottage & (Kobe University Law Faculty Prof) James Claxton
[This is an non-hyperlinked / unfootnoted version of a posting published by the Kluwer Arbitration Blog on 26 January 2018.]
Prime Minister Shinzo Abe himself is certainly back – having led the Liberal Democratic Party (LDP) to a fifth consecutive election in October 2017. If Abe remains in power for another three years, he will become the longest serving Japanese prime minister since World War II. Although the electorate probably responded mostly to his government’s hawkish security policy, given the recent sabre-rattling from North Korea, voters also seem to be giving the government the benefit of the doubt on his “Abenomics” economic policy. Introduced after the LDP regained power in 2012, Abenomics involves shooting “three arrows” – for monetary, fiscal and structural reform – to try to jumpstart the Japanese economy out of its lethargic performance since the “bubble economy” burst in 1991.
Against this political backdrop, and Abe’s ambitious announcement in 2013 that “Japan is back” on the world stage, some LDP policy-makers recently have proposed enhancing Japan as regional hub for international dispute resolution services. On 18 May 2017 the Nikkei Asian Review announced: “Japan to Open Center for International Business Arbitration”, which:

… could be set up as early as this year in Tokyo. Lawyer groups, corporations and other private-sector actors will take the lead in its operation. The Japan Commercial Arbitration Association [JCAA] could use the facility as its base while mediating international corporate disputes. Similar associations from other countries may use it as well.
Japan’s Foreign Ministry, Justice Ministry and Ministry of Economy, Trade and Industry [METI] will have joint jurisdiction over the new center. They will provide institutional support, such as by crafting necessary legislation and providing staff training.

Continue reading ““Japan is Back” – for International Dispute Resolution Services?”

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

Continue reading “NZ renounces ISDS: Deja vu?”

Guest blog: Japan – The Next Arbitration Shangri-La?

Written by: Nobumichi Teramura (UNSW Law Faculty)
As reported by the Nikkei Asian Review on 18 May 2017, the Japanese government announced it planned to open a new centre for international commercial arbitration in Tokyo. The facility was reportedly to be established for the use of the Japan Commercial Arbitration Association (JCAA), the only permanent commercial arbitration institution in the country as well as other arbitration institutions from all over the world. The Ministry of Foreign Affairs, Ministry of Justice, and Ministry of Economy were working together for necessary legislative reforms and staffing issues.
Studying other institutions’ experiences is important to plan the forthcoming reform, but it is also important to reflect on the past Japanese arbitration reforms when considering the future of Japanese arbitration. A wise person learns from history. What reforms have been made in international commercial arbitration regimes in Japan until today? What can we learn from the past reforms? What implications do they have for the forthcoming arbitration reforms?
Th0se questions are addressed in the Japan chapter 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 Anselmo Reyes (also a Judge of the Singapore International Commercial Court) and Gu Weixia. I was pleased to be invited to become the lead author of “Arbitration Reform in Japan: Reluctant Legislature and Institutional Challenges”, with my PhD thesis associate supervisor Professor Luke Nottage of Sydney Law School as co-author. My primary supervisor, Professor Leon Trakman of the University of New South Wales, contributed the chapter on arbitration reforms in Australia. Below is my outline of the forthcoming chapter on Japan.
The aim of establishing such a centre is to boost the number of international commercial arbitrations held in the country, which is now around 20 per year. New JCAA case filings have ranged from 14 to 27 annually between 2007 (15 cases filed) and 2016 (18). International Chamber of Commerce arbitration cases with the seat in Japan ranged from 2 to 5 annually between 2007 (4 filed) and 2015 (2). This number is quite small, compared with other countries or cities having those well-known arbitration institutions such as Hong Kong, Singapore, London, Paris and New York. (However, in Australia, ACICA only attracted a few new cases each year until 2009 and on average about 8 annually between 2010 and 2015, with ICC cases ranging between 1 and 8 each year from 2008 (2 cases filed with the seat in Australia) and 2016 (8 filed)). Japan’s Ministry of Justice launched a task force to investigate these popular institutions for the purpose of clarifying what reforms are necessary to attract more arbitration cases to Japan. Japanese arbitration is therefore venturing into a new era of reform.

Continue reading “Guest blog: Japan – The Next Arbitration Shangri-La?”

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.

Continue reading “International Arbitration Law Reform: Australia … Japan, Asia-Pacific?”

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.

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

“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.

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

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.

Continue reading “International Investment Arbitration Across Asia: A Symposium”

“Team Australia” wins the Intercollegiate Negotiation and Arbitration Competition in Tokyo, for the third time!

Congratulations to Stephen Ke (final-year Sydney Law School student, and former intern at the Centre for Asian and Pacific Law), Kieran Pender, Camilla Pondel and Dan Trevanion (ANU law students), who recently came out ahead of excellent teams from the National University of Singapore, followed by Osaka, Sophia, and Kyoto / Hitotsubashi universities. They had already competed very strongly in the INC moot as part of a larger Team Australia, including students competing also in the parallel Japanese-language division. Practice makes perfect! This year’s students won the Squire Patton Boggs Best English Negotiation Team award. Team Australia also was just short of the highest mark awarded in the English-language division for the Arbitration round, where students apply the UNIDROIT Principles of International Commercial Contracts.

Continue reading ““Team Australia” wins the Intercollegiate Negotiation and Arbitration Competition in Tokyo, for the third time!”

Book Review – Celeste Arrington “Accidental Activists: Victim Movements and Government Accountability in Japan and South Korea” (Cornell University Press, 2016)

This extensively researched and succinctly written book effectively compares the processes and outcomes of several major movements for victims’ redress from governments in Japan and Korea. The focus is on campaigns that developed especially from the 1990s, an era of perceived “judicialization of politics, enabled by democratization in Korea in 1987 and more competitive electoral politics in Japan since 1993” (p. 203), when victims sought redress for poor decisions regarding Hansen’s disease (leprosy, as discussed in ch. 3), blood tainted with Hepatitis C (ch. 4) and abductions by North Korean authorities (ch. 5).
Arrington examines not just the respective victims’ contestations with the state, but also the nature and timing of their interactions with key mediating institutions (ch. 2): the legal profession (to pursue litigation), the media (providing publicity for their causes), and activist groups (for lobbying). In particular, she emphases how too much early engagement with politicians – even “elite allies” – aimed at achieving legislative or bureaucratic intervention, as occurs more in Korea’s more open-textured democratic process, may lead perversely to poorer redress outcomes as the issue becomes more polarised politically.

Continue reading “Book Review – Celeste Arrington “Accidental Activists: Victim Movements and Government Accountability in Japan and South Korea” (Cornell University Press, 2016)”

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.

Continue reading “Are US Investors Exceptionally Litigious with ISDS Claims?”