This is the title of a project funded by the Australia-Japan Foundation over 2010-11 for myself and Sydney Law School colleagues, Dr Brett Williams and Micah Burch, which will consider the scope for both countries to develop greater common ground in cross-border dispute resolution law and practice, to facilitate bilateral, regional and even multilateral economic integration. Australia and Japan have recently amended their Double-Tax Treaty and are now negotiating a Free Trade Agreement (FTA). Former Prime Ministers Kevin Rudd and Yukio Hatoyama floated the idea of a broader “Asia Pacific Community” or “East Asian Community”, not limited to matters conventionally found in FTAs. The project will look at the possibility of adding:
(a) novel inter-state arbitration mechanisms, namely for:
(i) disputes about interpretation of Double Tax Treaties, a process triggered by taxpayer in a state (which must then obtain a decision from arbitrators binding on both states) and now envisaged since the 2005 revisions to the OECD Model Tax Treaty;
(ii) disputes about market access for goods and services (including typically some forms of investment), usually modelled on provisions set out in the 1994 Dispute Settlement Understanding of the World Trade Organization (itself under review, with considerable leadership from Australia);
(b) appropriate mechanisms for disputes involving a broader array of investments, in response to discriminatory or other illegal treatment from the host state, allowing investors to bring arbitration proceedings directly (often now provided in FTAs and bilateral investment treaties or “BITs”) instead of via appeals to their home state for inter-state dispute resolution;
(c) provisions or measures to improve commercial arbitration law and practice for the resolution instead of business-to-business disputes, achieved through commitments that might also be entrenched through treaties, but potentially instead through parallel legislation in each state, or through common Rules or agreements among the main Japanese and Australia arbitral institutions).
The project will also involve Professor Tatsuya Nakamura, former ANJeL Research Visitor and General Manager in the Japan Commercial Arbitration Association, and anyone willing to share experiences or views in these three fields (particularly in Australia or Japan) is very welcome to contact me at first instance.
New Legislative Agendas, Legal Professionals and Dispute Resolution in Australia and Japan: 2009-2010
This is the title of my third paper in a series of edited and updated selections of my postings to the ‘East Asia Forum’ blog (indicated with a double asterisk in the Table of Contents below) and this partly-overlapping ‘Japanese Law and the Asia-Pacific’ blog. They mainly cover developments from mid-2009 through to mid-2010, with a focus on law and policy in Australia and Japan in a wider regional and sometimes global context. The paper is freely downloadable here.
Half of the postings edited for the paper introduce some new policy and legislative agendas proclaimed by the then Prime Ministers of Australia (Kevin Rudd, in late July 2009) and Japan (Yukio Hatoyama, through the Democratic Party of Japan [DPJ] which he led to a remarkable general election victory in late August 2009). Both had resigned by mid-2010, indicating some of the difficulties involved in implementing ambitious reforms in both countries. All the more so, perhaps, if innovative measures are to be added to both countries’ Free Trade Agreements (FTAs) in order to foster more sustainable socio-economic development in the aftermath of the Global Financial Crisis (GFC).
The remaining postings end by introducing Australia’s regime for international (and domestic) commercial arbitration enacted in mid-2010, centred on a United Nations Model Law – like Japan’s Arbitration Act of 2003. However it sets these enactments in broader context by focusing on legal professionals – lawyers, judges and specialists in Alternative Dispute Resolution (ADR) – as well as aspects of the legal education systems in both countries. Those systems will need to gel better as well for both Australia and Japan to achieve the ‘cultural reform’ needed to generate sustainable critical mass in commercial (and investor-state) arbitration activity.
International Commercial Arbitration Reform in Australia, Japan and Beyond
Australia’s long-awaited International Arbitration Amendment Act 2010 (Cth) received Royal Assent on 6 July, after the Senate agreed on 17 June to the Bill introduced to the House of Representatives on 25 November 2009 as revised by the federal Government itself on 17 March 2010. The International Arbitration Act 1974, as thereby amended (‘amended IAA’, at http://www.comlaw.gov.au), is set in broader context by the first book devoted to this important field of dispute resolution (‘DR’) law and practice: Luke Nottage and Richard Garnett (eds) International Arbitration in Australia (Federation Press, Sydney, forthcoming October 2010: see Prelims PDF downloadable here).
This eleven-chapter work adds a Preface from NSW Chief Justice Spigelman, a powerful proponent of arbitration and broader access to justice as well as judicial exchange with Japan. It is partly dedicated to Professor Yasuhei Taniguchi, one of my inspiring former teachers at Kyoto University in the early 1990s and a Distinguished Visitor to Sydney Law School over July-August 2009. He is also renowned as a practitioner of international commercial arbitration (ICA), having served for example as arbitrator in an ICC arbitration in Melbourne, as well as a former Judge on the WTO Appellate Body.
The amended IAA brings new promise for ICA in Australia, and may offer lessons for countries like Japan. But Australia can also learn from Japan, especially the thorough way in which it goes about legislative reform.
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Guest Blog: Japan’s Quest for a Leadership Role in Asia
On 11 March, the Japan Foundation hosted a lecture at Blake Dawson’s offices in Sydney entitled ‘Japan at a Foreign Policy Crossroads: New Direction or More of the Same?’ by Kyoko Hatakeyama, a former official in Japan’s Foreign Ministry who recently completed her doctorate under the supervision of Professor Craig Freedman at Macquarie University. She discussed the possible changes in Japanese foreign policy under the new government led by the Democratic Party of Japan (DPJ), and the lecture included the launch in Australia of ‘Snow on the Pine: Japan’s Quest for a Leadership Role in Asia’, a book based on her thesis and co-authored with Dr Freedman. Here are some notes subsequently provided by Dr Hatakeyama, setting a broader context for many postings and comments on this Blog.
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Judicial Education and Training in Japan
To qualify as a lawyer (bengoshi) with full rights to give legal advice and represent clients – and also to be appointed as a senior court judge or public prosecutor – candidates must pass the National Legal Examination (shiho shiken), and then be trained at the Legal Research and Training Institute (LRTI). University legal education still takes place primarily at the undergraduate level. Every year, about 45,000 students graduate with a Bachelor of Laws. However, most of them do not become lawyers, instead finding employment in governmental organs or private corporations, because it has been extremely difficult to pass the National Legal Examination. In 2004, while more than 40,000 people took the Examination, less than 1,500 examinees passed. The number of successful examinees is intentionally limited. The number was 500 in 1990, then gradually increased to 1,000 in 2000, and to around 1500 in 2004. It was expected rise to around 3,000 per annum in 2010, as part of a broader program of judicial reforms underway since 2001, but the recent election of a new President for the Japan Federation of Bar Associations now makes this very unlikely.
Another aspect of the agenda advanced by the Judicial Reform Council (JRC) related to the training of prospective legal professionals was the inauguration of 68 new postgraduate “Law Schools” from April 2004. However, although it is easier for their (carefully selected) students to pass a “New Legal Examination” (shin-shiho shiken), it remains one of the most difficult in Japan – with a pass rate of about 30%. The old shiho shiken, which could be attempted without any university degree, has been gradually phased out to allow the new Law Schools to get established, although (as recommended by the JRC in 2001) a small new scheme will be introduced to allow those unable to afford Law School to still qualify to become a bengoshi, prosecutor or Judge.
But what happens after this Examination and when one joins the almost 3,000-strong judiciary in Japan?
Will Privately-Supplied ADR Keep Growing in Japan?
[Adapted on 10 April for the East Asia Forum blog]
The shift since the 1990s in the self-image of many bengoshi lawyers outlined in my previous posting, underpinned also by the slowly changing nature of their work generally as well as the emergence of corporate law firms, helps explain the quite swift enactment of the 2004 Law to Promote the Use of Out-of-Court Dispute Resolution Procedures (translated here), driven also by a Judicial Reform Council (JRC) recommendation in 2001. After a slow start, the Law also seemed to be gaining some traction in promoting privately-supplied ADR services.
However, Court-annexed mediation and recent improvements in the litigation process itself leave a formidable competitor. And the conservative backlash among bengoshi in electing their new JFBA President is likely to further dampen the emergence of private ADR services and institutions. Especially now, that only seems probable if and when private suppliers develop niche markets like more facilitative (not evaluative) forms of ADR – a characteristic of ADR in Australia that has impressed ANJeL Visiting Professor Tatsuya Nakamura (see his columns in Japanese reproduced here) – and if litigation costs balloon like they have in countries like Australia.
Continue reading “Will Privately-Supplied ADR Keep Growing in Japan?”
Japan’s Legal Profession (and ADR and Legal Education) at a Crossroads
Japanese bengoshi lawyers, as the most influential group within the legal profession, stand at a crossroads. Overall, through the overarching Japan Federation of Bar Associations (JFBA), their work and attitudes have become more amenable to collaborating with the judiciary and even public prosecutors in implementing reforms to the litigation system; to increasing the numbers allowed to pass the National Legal Examination as the gateway to careers as a lawyer, judge or prosecutor; and even to allowing Japan’s many “quasi-lawyers” to expand their legal practice, as well as more promotion of privately-supplied ADR services. Reforms in all these areas were propelled by the Judicial Reform Council’s final recommendations to the Prime Minister in 2001, but they were consistent with the trajectory of bengoshi as a whole. However, the controversial election of a new JFBA President may derail all this, with implications also for related initiatives such as Japan’s new postgraduate “Law School” programs inaugurated in 2004.
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Guest blog: “Learning from Toyota’s Troubles — Where’s the Board?”
Do Toyota’s woes indicate, as some have argued, the last nail in the coffin of the mass production based export model that had served the Japanese economy so well at least through to the 1980s? In other words, does Japan need to wind down even high-tech goods manufacturing and further expand its services sector? Are consumer product safety expectations both within Japan and abroad just too demanding nowadays? Or is Toyota similar to Mitsubishi Motors, an aberrant company which for years conducted clandestine recalls – taking consumers and regulators for a ride – until an employee blew the whistle in 2000 … almost destroying the Mitsubishi brand name? And does the Toyota saga suggest that Japan’s gradual transformation in corporate governance is, well, TOO gradual?
For one view on that last point, and to encourage public comments on any of these questions or others that have been raised by Toyota’s saga, I am pleased to reproduce (with permission) the following posting by an American ANJeL member on JURIST, the University of Pittsburgh’s blog:
JURIST Guest Columnist Professor Bruce Aronson of Creighton University School of Law says that Japanese automobile manufacturer Toyota’s current safety crisis – now the subject of Congressional hearings – should prompt the company to address its seriously flawed system of governance more than just its public image….
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Book Review: Hiroshi Oda, Japanese Law (3rd ed 2009, OUP)
This third edition textbook by University of London Professor Hiroshi Oda continues to fill an important niche in the ever-growing English-language (and even Western-language) literature on Japanese law.
It provides clear, succinct, up-to-date and comprehensive coverage. The effort to cover all major areas of law does mean some trade-off with contemporaneity, but this is largely unavoidable especially now that Japanese law has been changing so quickly and extensively since the mid-1990s. A brief Introduction is followed by parts on:
• The Basis of the System”: chapters on modern legal history, sources of law, administration of justice (including arbitration and ADR), legal profession, and human rights protection – ie the constitution); then
• “The Civil Code – The Cornerstone of Private Law”: general rules, law of obligations and contracts, property law, (only then) tort law, family law and inheritance;
• “Business-related Laws”: corporate law, insolvency law, securities (and financial instruments) law, anti-monopoly law, IP and labour law; and
• “Other Laws”: civil procedure, criminal law and procedure, international relations (eg nationality law, foreign exchange and trade law, transnational disputes).
To read the rest of this Book Review, contact me or see (from mid-2010) the Australian Journal of Asian Law.
2nd ANJeL Australia-Japan Business Law Update CLE Seminar: 13/02/10 in Tokyo
Happy New Year of the Tiger!
Registrations are now open for the 2nd ANJeL Australia Japan Business Law Update seminar: Saturday 13 February 2010 2-5.30pm at the Kasumigaseki building of Ernst & Young in Tokyo (http://shinnihon.vo.llnwd.net/o25/image/aboutus/eytax_access_mapE.gif).
Learn about post-GFC financial markets reg and (yes) the amended Australia-Japan double tax treaty. And even get 3 MCLD/PLD credits. Just A$200 – with no GST chargeable! At least some of us will follow up with an informal (PAYG) dinner.
For more details and registration please visit: http://www.usyd.edu.au/news/law/457.html?eventcategoryid=39&eventid=5139
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