Category: Japanese Law

International Commercial Arbitration in Japan and Australia: Addressing Australia’s “Legislative Black Hole” and Comparing Caselaw

Profs Tatsuya Nakamura, J Romesh Weeramantry and myself will present a public seminar at JCAA in Tokyo on 20 July to compare recent developments in jurisdictions that have based their arbitration legislation on the UNCITRAL Model Law (respectively: Japan, Hong Kong and Australia). Below are details of a follow-up seminar on 13 September in Sydney organised by Sydney Law School and hosted by Clifford Chance, where Prof Nakamura will be the main speaker.
Prof Nakamura and I will also participate on 12 September in Brisbane in an interactive AFIA (Australasian Forum for International Arbitration) symposium hosted by Corrs Chambers Westgarth.
These events are part of our joint research project, “Fostering a Common Culture in Cross-Border Dispute Resolution: Australia, Japan and the Asia-Pacific“, supported by the Commonwealth through the Australia-Japan Foundation which is part of the Department of Foreign Affairs and Trade.
Background materials for these three events include:
1. Nakamura, Tatsuya and Nottage, Luke R., Arbitration in Japan (May, 30 2012). ARBITRATION IN ASIA, T. Ginsburg & S. Ali, eds., Juris: NY, Fothcoming; Sydney Law School Research Paper No. 12/39. Available at SSRN: http://ssrn.com/abstract=2070447
2. Garnett, Richard and Nottage, Luke R., What Law (If Any) Now Applies to International Commercial Arbitration in Australia? (May 2012). Sydney Law School Research Paper No. 12/36. Available at SSRN: http://ssrn.com/abstract=2063271
The latter identifies the following serious and growing legislative lacuna that has emerged since Australia revised its framework for international arbitration from 2010:

The amendments to the International Arbitration Act 1974 (Cth) (‘IAA’) enacted on 6 July 2010 aimed to reposition Australia as a leading Asia-Pacific venue for international commercial arbitration. They also aimed to streamline and revitalise domestic arbitration by providing the new template for reforms to the uniform Commercial Arbitration Act (‘CAA’) regime, originally enacted in the mid-1980s based on a more interventionist English law tradition.
Yet the IAA amendments did not clearly indicate whether some were intended to apply to (a) international arbitration agreements, (b) specifying the seat of the arbitration to be in Australia, (c) concluded before 6 July 2010, especially if (d) the parties had expressly or impliedly excluded the UNCITRAL Model Law on International Commercial Arbitration pursuant to the original s21 of the IAA. The present authors had suggested that these amendments, especially s 21 which no longer allows such an exclusion, were not intended or presumed to have retrospective effect. The Western Australian Court of Appeal recently agreed, unlike a Federal Court Judge at first instance, although in obiter dicta in both cases.
This article restates the problems created by the IAA amendments (Part II), analyses Australian case law decided since 6 July 2010 (Part III), and then proposes a way forward – including comparisons with other Asia-Pacific jurisdictions that have recently enacted arbitration law reforms, especially Singapore and Hong Kong (Part IV). It recommends prompt further IAA amendments that: (i) clarify that at least the new s 21 does not have retrospective effect, (ii) limit a persistent tendency among some Australian courts to infer that a selection of arbitration rules amounts to an implied exclusion of the Model Law under the old s 21, and (iii) consider several other reforms addressing other issues left unclear or not covered in the IAA as amended in 2010.
The article also urges reforms to the new uniform CAA regime (including CAA legislation already enacted in NSW, Victoria and South Australia) that ‘save’ old international arbitration agreements satisfying conditions (a)-(d) above. The old CAA legislation, or at least the new CAA regime, should clearly apply to such agreements – otherwise they will fall into a ‘legislative black hole’. That problem arises because states are enacting the new CAAs to apply only to ‘domestic’ arbitration agreements, while simply repealing the old CAAs (which applied also to international arbitration agreements, especially if the parties had agreed to exclude the Model Law as permitted by the old s 21 of the IAA).

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Book Review – Mark D West, “Lovesick Japan: Sex, Marriage, Romance, Law”

Mark D West, Lovesick Japan: Sex, Marriage, Romance, Law (Cornell University Press, Ithaca/London, 2011, viii + 259pp, hardcover US$29, e-version $18.44 via http://www.amazon.com/Lovesick-Japan-Sex-Marriage-Romance/dp/0801449472
[Published in 33 Journal of Japanese Law 253-8 (2012), with a shorter version also in 32(2) Japanese Studies 299-301 (2012).]
This is the third book with “sex” in the title that has been written since 2005 by the Nippon Life Professor of Law at the University of Michigan Law School. Although it is beautifully written in a conversational style, opens up some intriguing insights, and reflects very extensive research, this work is probably the least successful of the three. This reviewer, at least, hopes that Mark West will now divert his formidable talents to examining other areas of Japanese law and society, including further research in the field that initially established his career – namely, “Economic Organizations and Corporate Governance in Japan” (Oxford University, 2004, co-edited with Curtis Milhaupt).
West’s book on “Law in Everyday Japan: Sex, Sumo, Suicide, and Statutes” (University of Chicago Press, 2005) actually did not focus much on sex. But it showed convincingly how law has played important roles in the development of the “love hotel” industry, as in many other areas of everyday life in Japan. His book on “Secrets, Sex and Spectacle: The Rules of Scandal in Japan and the United States” (University of Chicago Press, 2005) contained more sex. But this arose as part of detailed analysis of important differences – and some similarities – in the two countries’ societies and legal systems relevant to scandals, including corporate fraud, baseball cheaters and political corruption. By contrast, West’s latest book on “Lovesick Japan” is full of sex – caveat emptor (buyer beware)!
In this book West pursues the argument that “law matters” in Japan, but in unusual as well as more mundane life situations. Indeed, he argues that “Japanese judges, who have significant discretion, play a surprisingly direct role of arbiters of emotions in intimate relationships” (p9). Further, unlike his earlier works, West focuses predominantly on how Japanese judges write and reason about sex, marriage and “love” more generally, in their publically-available judgments covering a broad array of legal and social topics. He argues that a “state-endorsed judicial view” (p9) emerges not just from the way the legally relevant facts (and sometimes seemingly irrelevant facts) are presented, but also from the legal analysis – with the combination often suggesting broad problems: a “lovesick Japan”. Specifically (p8):

Love, for instance, is highly valued in Japan, but in judges’ opinions, it usually appears as a tragic, overwhelming emotion associated with jealousy, suffering, heartache, and death. Other less debilitating emotions and conditions, including “feelings”, “earnestness” and “mutual affection” appear in unexpected areas of the law such as cases of underage sex and adultery. Sex in the opinions presents a choice among (a) private “normal” sex, which is male-dominated, conservative, dispassionate, or nonexistent; (b) commercial sex, which caters to every fetish but is said to lead to rape, murder, and general social depravity; and (c) a hybrid of the two in which courts commodify private sexual relationships. Marriage usually has neither love nor sex; judges raise the ideal of love in marriage and proclaim its importance, but virtually no one in the cases achieves it. Instead, married life is best conceptualized as the fulfillment of a contract.

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‘Business Law in Japan – Cases and Comments’ – Festschrift for Harald Baum (Kluwer, 2012)

[Adapted from the 21 May news item from the Max Planck Institute for Comparative and International Private Law (MPI)]
A ground-breaking English-language summary and commentary on leading Japanese judgments in the field of business law has been published as a Festschrift to mark the 60th birthday of Harald Baum, the Senior Research Fellow and Head of the Japan Unit at the MPI in Hamburg. Students, colleagues and friends of Harald Baum from Europe, Japan, the USA and Australia [namely, Luke Nottage] honour the achievements of the longstanding Max Planck academic with a collection of 72 judgments from Japanese courts on issues of intellectual property rights, civil law and international private and business law.
The collection of cases edited by Moritz Bälz, Marc Dernauer, Christopher Heath and Anja Petersen-Padberg complements the Handbuch Japanisches Handels- und Wirtschaftsrecht (Encyclopedia of Japanese Commercial and Business Law) which Harald Baum edited with Moritz Bälz in 2011. The Festschrift contains contributions from over 50 notable authors from academia and legal practice and thus becomes one of the standard works on Japanese business law written in a Western language. The publishers note their intention of ensuring that the contributions do justice to the high academic standards repeatedly set by the honouree.
The Festschrift was presented to him at the Institute by the publishers on 14 May 2012 during an academic ceremony, including an address by Prof. John O. Haley. Prof. Dr. Harald Baum has been a Senior Research Fellow and Head of the Japan Unit he founded at the Institute in Hamburg since 1985. As founding editor since 1996 of the Zeitschrift für Japanisches Recht / Journal of Japanese Law, he has had a significant impact on comparative research and academic discussions in this area. [The Australian Network for Japanese Law helps in editing and promoting the Journal, and is pleased to have Prof. Baum as a founding member of ANJeL’s Advisory Board. ANJeL warmly congratulates him and the editors on this latest book, which is described further below (adapted from the Kluwer website).]

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Book Review – “The Derivative Action in Asia” (CUP 2012)

Written by Fady Aoun & Luke Nottage, Sydney Law School
[This is an earlier manuscript version, without footnote references, of our review published in the (March 2012) special issue 34(1) of the Sydney Law Review, on Asian investment and finance law. The final and complete version, along with eight articles and an introduction by the guest editors (Vivienne Bath and Luke Nottage), can also be downloaded here.]
Dan W Puchniak, Harald Baum and Michael Ewing-Chow (eds) The Derivative Action in Asia: A Comparative and Functional Approach (Cambridge University Press, 2012), 434pp, ISBN-13: 9781107012271
A decade or so ago, in the aftermath of the Asian Financial Crisis (1997), international institutions like the World Bank saw corporate governance as deeply problematic in many parts of Asia — contributing to so-called ‘crony capitalism’ and economic instability. The proposed solution was often reform based on Anglo-American models, aimed at promoting more transparent securities markets by, for example, protecting minority shareholders. Some Asian jurisdictions made changes in that direction, at least according to the ‘law in books’, but they varied in scope and impact. Within a decade, moreover, large-scale corporate collapses in the West — particularly in the United States — and the Global Financial Crisis (2008) had called into question some fundamental assumptions and prescriptions of the Anglo-American approach to corporate governance. Intellectually, therefore, it is timely to revisit the situation in Asia from a broader comparative and historical perspective. Analysis of corporate governance in Asia also has obvious and immediate practical merit, given the region’s strong economic growth relative to Europe and the US, and especially in light of burgeoning cross-border investment flows arguably needed to sustain ‘the next convergence’ of developing and developed economies.
This book therefore represents an admirable and successful step towards a better understanding of what many commentators have proposed as an important potential contributor to minority shareholder protection and effective corporate governance: namely, the derivative suit brought by a shareholder on behalf of the company.

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“Asian Investment and Finance Law” – Special issue 34(1) Sydney Law Review (March 2012)

Professor Vivienne Bath and myself are guest editors and authors of two articles for this special issue, the first dedicated the Sydney Law Review to developments in or across Asian legal systems. The issue also includes an article on Indonesian law co-authored by Dr Simon Butt, presently serving as Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS).
The special issue contains the following nine contributions, with full-text PDF versions freely downloadable from the Sydney Law Review webpage:

Introduction: Asian Investment and Finance Law
Vivienne Bath and Luke Nottage
Articles:
Corporate Rescue in Asia – Trends and Challenges
Andrew Godwin
Lessons from Product Safety Regulation for Reforming Consumer Credit Markets in Japan and Beyond?
Luke Nottage and Souichirou Kozuka
Embracing Sharia-Compliant Products through Regulatory Amendment to Achieve Parity of Treatment
Kerrie Sadiq and Ann Black
Between Piety and Prudence: State Syariah and the Regulation of Islamic Banking in Indonesia
Tim Lindsey
Reining in Regional Governments? Local Taxes and Investment in Decentralised Indonesia
Simon Butt and Nicholas Parsons
Foreign Investment, the National Interest and National Security – Foreign Direct Investment in Australia and China
Vivienne Bath
Responding to Industrial Unrest in China: Prospects for Strengthening the Role of Collective Bargaining
Sarah Biddulph
The Influence of the WTO over China’s Intellectual Property Regime
Natalie P Stoianoff
Book Review: The Derivative Action in Asia: A Comparative and Functional Approach [edited by Harald Baum, Dan Puchniak and Michael Ewing-Chow, Cambridge University Press, 2012]
Luke Nottage and Fady Aoun

Vivienne Bath and I also reproduce below the text of our Introduction (omitting footnote references). It outlines and commemorates the long and strong tradition of engagement with Asian legal systems on the part of Sydney Law School, CAPLUS and the Australian Network for Japanese Law (ANJeL).

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Government lawyers in Korea, Japan and Australia

[Updated 18 April, with a shorter version also on the East Asia Forum blog.]
A few years ago I began a research project into how the Japanese government manages its public and private law cases, working with a former LLM student from Kyushu University and experienced Australian government lawyer, Associate Professor Stephen Green (now at Doshisha University Law Faculty in Tokyo). Our paper was published last year in the Asia Pacific Law and Policy Journal. The second half of the paper is also under review for a special issue of the International Journal of the Legal Profession, focusing on the remarkably under-researched field of government lawyering.
On 6 February this year I stopped over in Seoul to visit prosecutors in Korea’s Ministry of Justice (MoJ), partly to begin comparing how Korea manages similar litigation. Information kindly provided in interviews and follow-up correspondence reveals considerable similarities, but also some significant differences compared to Japan. The backdrop and issues in Australia regarding government litigation services diverge even further, but there is much scope for mutual learning.

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4th ANJeL Australia-Japan Business Law Update seminar (Tokyo, Sat. 11 Feb.)

About the seminar:
This fourth ANJeL CLE Seminar in Tokyo, aimed especially at Australian practitioners in Japan, as well as Japanese practitioners interested in Australian law and the economy, introduces new Australian developments in labour law and consumer law, including dispute resolution aspects, comparing also some developments in Japanese law and practice. It will be followed by an informal networking opportunity.
To register and view the event flyer please click here.

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Guest Blog – Socio-Legal Issues Arising from Japan’s ‘3-11’ Disasters

In an article published in the Zeitschrift für Japanisches Recht / Journal of Japanese Law [“Die Haftung für Nuklearschäden nach japanischem Atomrecht – Rechtsprobleme der Reaktorkatastrophe von Fukushima I” (Liability for Nuclear Damages pursuant to Japanese Atomic Law – Legal Problems Arising from the Fukushima I Nuclear Accident) (ZJapanR 31, 2011)] Julius Weitzdörfer, Research Associate with the Japan Unit of the Max Planck Institute for Comparative and International Private Law (and JSPS Visiting Researcher at Kyoto University Law Faculty), examines the legal challenges currently facing the Japanese judiciary, government and economy in the aftermath of the nuclear disaster. The article (in German along with an English abstract) can be downloaded here, and shorter summary by the author is reproduced below (from the MPI website).
Luke Nottage (also now at Kyoto University Law Faculty, as a Visiting Scholar over October-November) then adds a broader perspective on the disasters afflicting Japan since 11 March 2011, based on his presentation at Tohoku University in Sendai over 14-15 October.

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

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

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

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

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