Guest blog: ‘Japanese Law in Context’ in the context of a global pandemic – Report on a podcast series

Written by: Melanie Trezise (PhD candidate and Research Assistant at the University of Sydney Law School, and former ANJeL Executive Coordinator)[forthcoming in Journal of Japanese Law (2021)]

Academic events in the first twelve months of the COVID-19 pandemic were almost universally united by cancellations and virtual substitutes. The hallmark Kyoto and Tokyo Seminars organised by the Australian Network for Japanese Law (ANJeL) with Ritsumeikan University Law School were no exception. For the first time since 2005, Japanese, Australian and other international students unfortunately missed the opportunity in February 2021 to attend Ritsumeikan campuses for 9 days of in-person intensive learning in Japanese law.


In order to provide continuity to the seminar program, ANJeL, together with the Japanese Studies Association of Australia (JSAA), and funded by a mini-grant from the Japan Foundation Sydney, elected to provide brief introductions to the Seminar topics as short-form video podcasts. These were conducted in interview format, which is an intentional nod to the co-teaching format of the Seminars, and many interview pairings will be familiar to attendees at previous Seminars.


The podcast series begins with a short introduction by ANJeL co-director Prof Luke Nottage (University of Sydney). It is followed by a fascinating overview by co-director A/Prof Leon Wolff (Queensland University of Technology) on the nexus between pop culture and the law in Japan. The early billing of this interview in the podcast series playlist available via YouTube is not an accident, and it is hoped that this will be a tantalising hook for the podcast audience. Wolff’s work addresses the core question of “does law matter?” in contemporary Japan by using pop culture, especially television dramas, as evidence that law does, in fact, matter. This acceptance permits a shift in the question to how law matters and in doing so, Wolff moves beyond cultural and rationalist arguments to emotional attitudes towards the law.


The subsequent interview with long-time supporters of the seminars, Ritsumeikan University professors Tetsuro Hirano and Chihara Watanabe, sets the comparative context that is at the core of the Seminars’ international setting. The interview, led by Nottage, provides a concise introduction for students to some historical and theoretical perspectives on Japanese law. It also generates a wide-ranging discussion that extends to ongoing outside and home-grown influences on Japanese law, as well as the impact of justice system reforms since 2001 on the number and availability of lawyers in Japan.


This discussion links neatly to the following interviews on the practice of Japanese law, focusing separately on mediation and arbitration, civil procedure, as well as the experience of practicing lawyers in Japan. With respect to mediation, Nottage is joined by Professors Kyoko Ishida (Waseda University) and James Claxton (Rikkyô University / Waseda University) to discuss mediation as an alternative option to court processes and the impact of formalising that process in Japan, which has somewhat paradoxically required the involvement of legal (or quasi-legal) practitioners with specialist skills. Claxton presents a compelling account of the present and future of the new Japan International Mediation Center in Kyoto (JIMC-Kyoto).


As for arbitration practice in Japan, Nottage interviewed Prof Tatsuya Nakamura (Kokushikan University), Prof Giorgio Colombo (Nagoya University, and past observer of the Seminars) and Asst Prof Nobumichi Teramura (University of Brunei Darussalam). Japan’s recent legislative reforms in this area of law are discussed, as well as Japan’s competitiveness on the international stage as a preferred forum for commercial arbitration.


Prof Yoko Tamura (Tsukuba University) provides her expertise on civil procedure and gradually shifting changes in Japanese civil justice in favour of improved timeframes for pre-trial proceedings, having a positive impact on courtroom practice. Prof Tamura also flags integrated electronic practices as a key pathway for further improvements in civil procedure, a theme that appears in the pandemic ‘bonus feature’ discussed below.


Representing Japan-based legal practitioners, Mr Jiri Mestecky (Kitahama Partners) and Ritsumeikan graduate Mr Yoshihiro Obayashi (Yodoyabashi & Yamagami) provide insights into the experience of working as international lawyers in Japan. Linking to the academic debate on culture as an explanation for Japanese law practice, Mestecky and Obayashi describe the important role of international lawyers in cultural interpretation, as well as the anticipated impact of further new rules relating to gaikokuhô jimu bengoshi (外国法事務弁護士; registered foreign attorneys at law) on the number of foreign lawyers in Japan.


Prof Kent Anderson (Australian National University and founding ANJeL co-director, who also helped establish the annual Seminars from 2005) and Prof Makoto Ibusuki (Seijo University, who also co-founded the Seminars when formerly at Ritsumeikan University) were interviewed by Nottage about their always-popular classes co-teaching Japanese criminal justice to an international student audience. This begins with asking why students feel “safe” in particular settings, then developing an innovative, holistic approach to place Japan’s striking conviction and confession statistics in a socio-cultural context.


Wolff’s interview with Prof Narufumi Kadomatsu (Kobe University) will be a crucial introduction for foreign students of Japanese law seeking to understand gyôsei shidô (行政指導; administrative guidance) and its limits. This was a difficult interview to edit with Kadomatsu’s excellent case illustration of ‘voluntariness’ in administrative guidance unfortunately not making the shortened cut. The longer versions of all interviews will remain available for ANJeL core institutions and Ritsumeikan teachers to use in the (physical, virtual or blended) classroom.


Regarding gender and the law in Japan, both Prof Kyoko Ishida and Prof Masako Kamiya (Gakushuin University) are separately interviewed by Wolff. Ishida’s personal experience as one of only two tenured female law professors at Waseda University adds poignancy and immediacy to the discussion on women in legal education and practice, and the challenges that continue to be faced by women considering entering the profession. Kamiya’s interview provides the historical and contemporary context to the issue of gender and equal opportunity for women in Japan. We made the decision to break our own rules and present this as a ‘bonus’ long-form interview for the wider public, to permit drawing out some very important background issues that were impossible to cover within the standard format of 15-20 minutes.


This discussion on gender flows into Wolff’s interview with Prof Takashi Araki (University of Tokyo), particularly on the much-cited workplace practice of lifetime employment in Japan. Araki’s insight into the changing trends and demographics in different employment practices (including burgeoning ‘irregular work’ examples of fixed contract labour, part-time work and agency labour) will be thought-provoking for viewers, even those not usually interested in or familiar with labour law and practice.


On contract law, Prof Veronica Taylor (ANU) and Prof Tomohiro Yoshimasa (Kyoto University), in interview with Nottage, present some surprises for Australian businesses and students of contract law, in particular in relation to an illustrative case on the termination of a wine industry contract. They reflect on how contract practices in Japan have changed in recent times, including an increase in documentation of contracts in large enterprises compared to continued informal contracting practices of small- to medium- sized enterprises, which lack the same resources.


Prof Marc Dernauer (Chuo University) and Nottage discuss consumer law, in particular the complexities of consumer contract and consumer law regulation in Japan. Dernauer highlights the layered public law / private law dichotomy as a surprising feature of Japanese consumer protection following legislative reform in this area especially over the past few decades. As their discussion reveals, strengthening ex post relief for consumers through private law remedies and better access to dispute resolution services, in line with the 2001 justice system reform program and earlier deregulation, has arguably not led to much unwinding of ex ante public regulation aimed at protecting consumers more directly.


The discussion by Prof Akihiro Wani (Morrison & Foerster, Sophia University) on finance and the law, interviewed by this author, has a certain prophetic feel. This is particularly so with respect to rapid changes anticipated as a result of new types of brokerage products, especially given that this interview was filmed at the end of 2020, prior to the GameStop trading controversy.


Tax law specialist and ANJeL Program Director (Teaching and Learning), Micah Burch (University of Sydney), also supported the project by conducting two interviews. His tax law interview with Dr Justin Dabner (formerly James Cook University) reflects on the experience of teaching comparative tax law in Japan, as well as the globally relevant issue of carbon taxation. Burch’s second interview, with Kyoto Seminar graduate Dr Matt Nichol (Central Queensland University), discusses Japanese and international sports law. This is the only interview topic in the podcast series that is not a regular feature of the Kyoto and Tokyo Seminars. Not unlike a demonstration sports event at the Olympics, Nichol whets the appetite for this to be included in the Seminar series in the future by delivering a fascinating bonus feature worthy of a wider audience.


In addition to the above, many of the interviews also draw out preliminary observations on the impact of the COVID-19 pandemic. In addition to including edited versions of these responses in the main feature interviews, we made the decision to create a compilation of these observations into a joint bonus feature to permit immediate comparison of the answers relevant to different areas of law and society. Many answers reflected on the role of technological solutions to continue the practice of law in as ‘business as usual’ manner as can be approximated. The inability to file court matters electronically was a frequent theme and it will be interesting to see whether virus containment measures in Japan will accelerate this change in Japanese judicial practice.


Finally, the pandemic challenge was also discussed in Nottage’s interview of Professor Naoya Yamaguchi (Ritsumeikan University, current co-organiser of the Seminars), Wolff and Anderson. They also reflect more generally on the past, present and future of the unique Kyoto and Tokyo Seminar program. As Wolff explained in this concluding bonus podcast, “continuity and change” has always been a major theme for this innovative and educational series. That is also now a fitting theme in considering the format of the Kyoto and Tokyo Seminars themselves in the context of the ongoing global pandemic.


Indeed, in-person academic conferences and seminars are much more than just opportunities for self-funded students to fill up on catered sandwich triangles and norimaki – they have an essential role in providing opportunities for people to network and get a sense of everyday life in a different socio-cultural context. Most people will agree that this has proven challenging to replicate online, at least to establish new relationships and deepen perspectives. On the other hand, digital format conferences have provided a greater degree of accessibility, as demonstrated by the inclusion of these videos on YouTube for access by the general public.


It seems certain, however, that when they can return, and in whatever format the program must take, there will be a ready audience for ANJeL’s Kyoto and Tokyo Seminars co-hosted with and at Ritsumeikan. In the meantime, this podcast series delivers thought-provoking material for students, academics and practitioners alike, as well as a kind of time capsule for this broad community of people interested in Japanese law in a global context.

Asian Legal Conversations: COVID-19 (Japan)

ANJeL Program Convenor (Judges-in-Residence) A/Prof Stacey Steele and UMelbourne colleagues have produced or assembled webinar recordings, interview transcripts and other resources comparing how Japanese and society has managed the COVID-19 pandemic, available here.

These resources include:

Quarantine, Masks and Dis/ease: Social Discourses of COVID-19 in Japan and Korea

Sunyoung Oh, Claire Maree, Jun Ohashi and Patrick Murphy
Originally posted on the Melbourne Asia Review, 5 November 2020 [43-minute recorded webinar]

An Analysis of Japanese Responses to COVID-19 from an Administrative Law Perspective

Shusaku Kitajima, 8 October 2020 [article, building on interview with Stacey Steele (26 May, transcript here)]

Responses to COVID-19 and Japanese Criminal Justice

Reegan Grayson-Morison and Stacey Steele, 24 June 2020 [interview transcript]

Judicial Responses to COVID-19: Japanese and Victorian Courts’ Use of Technology

Reegan Grayson-Morison and Stacey Steele, 23 June 2020 [interview transcript]

Embracing Asian Law Centre Communities and Opportunities: Alumni Gathering of Japanese Judicial Visitors

Stacey Steele, 18 June 2020 [short article]

Regionalism Rises in Japan to Confront COVID-19

Dan Rosen, 21 May 2020 [short article]

Japan’s Soft State of Emergency: Social Pressure Instead of Legal Penalty

Akiko Ejima
Co-posted in collaboration with
COVID-DEM, which curates and publishes analysis of COVID-19’s impact on democracy worldwide, 13 May 2020 [short article]

Not a Sporting Chance: COVID-19 Dashes Japan’s Olympic Economic Hopes

Asialink
Originally posted on
Asialink Insights, 11 May 2020 [short article]

“ADR Academic of the Year 2020” Award

Based partly on his new book of selected, updated and new essays on “International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts”, Luke Nottage was recently awarded “2020 ADR Academic of the Year” by the Australian Disputes Centre. This leading centre administering and promoting Alternative Dispute Resolution has presented the “Australian ADR Awards” since 2016 across various categories. Open to all Australia-based experts, the “ADR Academic of the  Year” award “recognises the achievements of individuals who have in the last 12 months demonstrated excellence in academia in the field of [ADR, with work having] benefitted individuals, organisations or communities to achieve outcomes in more effectively resolving disputes.” More detailed criteria (work undertaken, process management, and benefits) and how Luke successfully met them over 2020 with kind letters of support from  Malcolm Holmes QC and Corrs consultant Prof Richard Garnett, are set out below.

  1. Detail outstanding work [over 2020] that illustrates excellence in academic endeavour in the area of alternative dispute resolution. [NB: Manuscript versions of most papers are freely downloadable via SSRN.com]

–       Four articles in leading refereed journals: on ISDS arbitrator neutrality (JWIT – as part of the special issue co-authored by the Geneva-based Academic Forum for ISDS), arbitration transparency (AIAJ), resolving Japan-Korea trade and investment disputes (JWT), Japan’s initiatives in international dispute resolution services (JJL)

–       Six chapters published or in press for books: on judicial control of arbitral awards (CUP Handbook), Asian investment treaty arbitration (including Japan and Australia, for Springer Handbook), arbitration and ‘society at large’ (CUP Compendium), ISDS impact on FDI (CUP), and a detailed analysis of ACICA (for the Oxford Encylopedia of International Procedural Law, with Prof Richard Garnett)

–       lead-edited New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (15 chapters, Wolters Kluwer, published end-2020), including my own five (co-)authored chapters (eg on Australia’s recent investment treaty arbitration practice): outline at https://japaneselaw.sydney.edu.au/2020/07/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-webin/

–       put into press 12-chapter International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts (Elgar, February 2021): outline at https://japaneselaw.sydney.edu.au/2020/08/book-in-press-with-elgar/

–       taught international arbitration at Sydney Law School (over 200 students across 5 JD/LLB and LLM courses) and UAuckland (LLM)

–       Supervising two PhD students in international arbitration and mediation, awarded Sydney University Postgraduate Representative Association “supervisor of the year” in late 2019

–       Academic Co-advisor for “Team Australia” law students across multiple Australian universities, who came second in Tokyo’s Intercollegiate Negotiation and Arbitration Competition in December 2019, and again second in November 2020 competing remotely (https://www.teamaustralia-inc.net/),

–       Only full-time academic on the ACICA Rules Drafting Committee, which released new draft Rules recently for public consultation. [For my co-authored commentary on the final 2021 Rules, and on the 2005 and 2016 Rules, see https://acica.org.au/rules-commentary/]

  1. How have you researched and developed this work and what skills have you used to ensure its effective delivery? [‘process management’]

–       Provided freely downloadable versions of almost all above publications (and most earlier arbitration or ADR-related publications) via http://ssrn.com/author=488525 (with 2700+ downloads of all my papers over last 12 months, so one of the most widely-read Australia-based law authors via SSRN.com)

–       For the Kluwer New Frontiers book: obtained competitive funding from USydney and Hong Kong University for two conferences, ran the USydney-based one in November 2019, mentored a project assistant to become a book co-editor, reported on presentations and related work in progress via https://japaneselaw.sydney.edu.au,  http://arbitrationblog.kluwerarbitration.com/author/luke-nottage/ and http://mediationblog.kluwerarbitration.com/author/luke-nottage/

–       Further disseminated research findings to practitioners and others through professional journals such as ACICA Review (December 2019 pp54-6, with Rome-based seminar co-presenter) and multiple international and domestic conference or seminar presentations (including Kluwer book related seminar organised and chaired on 4 August 2020 webinar, with over 200 registrants: https://law-events.sydney.edu.au/talkevents/beyond-the-pandemic-new-frontiers-in-asia-pacific-international-dispute-resolution)

–       Provided three submissions (twice invited to give oral evidence) for parliamentary inquiries into four treaties related to investment arbitration, with associated media commentary (eg AFR 26 August 2019) and analysis quoted in related JSCOT Reports (eg No 188, December 2019)

–       Co-organised and co-moderated ACICA Rules Revision public consultation webinar for Australian Arbitration Week in October 2020

–       Joined williamstradelaw.com as Special Counsel from July 2020 to provide legal advice in international arbitration nationally and internationally

  1. How do you believe this work has benefitted individuals, organisations and/or communities?

–       Improved understanding of the trajectory and current issues of international commercial and investment treaty arbitration, as well as cross-border mediation generally, among lawyers, academic and student researchers, government and other policy-makers (including treaty negotiators) as well as the general public

–       Mentored younger and mid-career practitioners and academics in these fields

–       Created closer institutional linkages between USydney and other leading law schools for ADR (notably over 2020 the University of Hong Kong)

–       Expanded connections between academia generally and professional bodies (eg ACICA, AFIA), government (especially DFAT, including through February 2020 co-organised SCIL conference in Sydney) and international organisations (including UNCITRAL via UNCCA.org.au Fellowship and October 2020 conference (recorded) presentation, and representation on the Academic Forum for ISDS as one of only a few Australians among over 100 professors world-wide: https://www.cids.ch/academic-forum-concept-papers)

–       Helped draft and publicise new-generation Arbitration Rules for ACICA

ANJeL’s “Team Australia” Students Second in INC Negotiation & Arbitration Moot

A cross-institutional “Team Australia” is Runner-Up in the 19th Intercollegiate Negotiation Competition “in” Tokyo last weekend (but held remotely this year). The Team also won the Chartered Institute of Arbitrators Prize for the best score in the English-language arbitrations held on 14 November (applying the UNIDROIT Principles of International Commercial Contracts, but also other international instruments). Over 15 November the Team successfully negotiated a complex cross-border joint venture agreement.

This year’s Team included Stella Lee (who also competed previously in English) and Tomohiro Sato from Sydney Law School, several students from ANU (another founding core partner of the Australian Network for Japanese Law, ANJeL) and others from various law schools across Australia. Stella and Tomo joined two others in the Japanese language division sub-Team (matched against Gakushuin and Osaka Universities). There were also two sub-Teams competing in the English language division (matched against Rikkyo, Sophia, Tokyo and Chulalongkorn Universities – “Chula” joined for the first time and all but one opposing universities also ended up in the top seven, so competition over Zoom was intense). The overall winner was the National University of Singapore, competing in the English-language division.

A primary coach was CAPLUS Associate Dr Nobumichi Teramura (and a co-editor of our co-edited Kluwer book on Asia-Pacific international dispute resolution, out next month), who also helped coach Team Australia to win the competition in 2018 and come second in 2019 (pipped by the University of Tokyo). The main academic coordinator was again ANJeL Advisor and ANU Professor Veronica Taylor. My modest contributions involved some introductions to arbitration and international contracting, judging a mock arbitration by the Team, providing ANJeL funding for coaching (plus a donation) and assessing the USydney students.

Heartfelt thanks also go to Dr Carol Lawson (UNSW) and Kieran Pender (helping with coaching this year and/or previously), Peter Cleary, A/Prof Jeanne Huang (for the practice moot with me), Cara Scarpato, A/Prof Stacey Steele (UMelbourne-based ANJeL Judges Program convenor) and Huw Watkins. Partial travel funding for some LLB students was available (as last year) from the Australian government’s New Colombo Plan grant administered by ANU, but was deferred due to pandemic-related travel restrictions.

Team Australia students had to conduct all their preparations remotely across multiple universities, missing out on the usual weekend practising face-to-face in Canberra plus final sessions together in Tokyo before the weekend competition, while preparing for end-of-year course assessments. Congratulations on rising to the extra challenges!

ANJeL/JSAA “Japanese Law in Context” Podcasts Project

Overview: The Japan Foundation Sydney has provided $5000 for this project to produce and widely disseminate by mid-March 2020 a series of 15-20 video-recorded interviews or podcasts involving Japanese Law experts across Australia, Japan, North America and other parts of Asia. These recordings aim to: (a) supplement courses in Japanese Law (and Japanese Studies more generally) in universities; (b) increase community awareness and engagement with Japanese law in socio-economic and comparative context; (c) create a snapshot and oral history of Japanese Law studies – all mainly for Australia, but also for Japan and beyond.

This is a joint project between ANJeL (Australian Network for Japanese Law) and the JSAA (Japanese Studies Association of Australia). ANJeL Co-directors Profs Luke Nottage, Heather Roberts and Leon Wolff will be responsible for content planning and project coordination, while JSAA will administer funding for three former/current PhD students and Research Assistants (Ana Ubilava, Nobumichi Teramura and Melanie Trezise). Both JSAA and ANJeL will publicise the project outcomes via their websites and their own or affiliated networks.

Sydney Law School will also provide logistical support through a Canvas website for Zoom recordings (thanks to Ross West) and a video-recording/editing suite (thanks to Andy Netherington).

Project Description: The team will first schedule and conduct interactive interviews with Japanese law experts, and/or help them plan and present (one-way) podcasts, outlining distinctive features of their main field(s) in Japanese Law particularly from comparative, interdisciplinary and/or historical perspectives. Then we will edit down these recordings to around 10-15 minutes each, and upload on or via the websites of the cross-institutional ANJeL and the Japan Studies Association of Australia as well as Youtube.

These resources will be widely publicised to be used freely for Japanese Law courses taught particularly by ANJeL’s core universities (USydney, ANU and QUT) as well as others in Australia (including affiliates like UMelbourne), but the resources will also be available for Japanese or comparative law courses taught in Japan and further afield. They can be used to complement course readings, often written by interviewees/presenters, who may also be invited to join classes remotely (depending on time zones and availability). Depending on the topic area and personal preferences, the recordings will comprise interviews (sometimes involving multiple interviewers and/or interviews), or occasionally subject-matter podcast summaries or key points. Depending on the interviewees, some of whom are now more senior scholars, questions may invite more personal reflections (on how the Japanese Law sub-field or approaches to studying it have evolved) or prompt more direct comparisons with law and practice in Australia. Once edited and uploaded for public viewing, the recordings will be widely publicised through ANJeL and JSAA (each with many hundreds of members in Australia and abroad) as well as their affiliated and various websites (including this Blog), as a resource for the wider community.

The core group of those recorded will be co-lecturers in the ANJeL Kyoto and Tokyo Seminars in Japanese Law taught to students from various Australian and Japanese universities for over a decade in Japan each February, hosted by Ritsumeikan University. (Although not taught offshore next year due to the pandemic, ANJeL core and other universities will be offering Japanese Law courses onshore supplemented by resources like these.) Below under we list the 2020 Seminars’ topics and lecturers from over a dozen universities across Australia and Japan. They will be supplemented by other Japanese Law scholars in Australia (like ANJeL Advisor Prof Veronica Taylor, and UMelbourne / ANJeL Judges Program convenor A/Prof Stacey Steele), in Japan, Europe, North America and other parts of Asia – especially those with interests in Australia (like past ANJeL Visitors). We will also add a few interviews with renowned legal practitioners renowned for bilateral engagement, such as Akira Kawamura (former IBA President and USydney alumnus) and one of the past judicial officers seconded from Japan for year-long research studies (with prior approval of course from the Supreme Court of Japan). Those recordings will further broaden the potential audience, beyond academia. It is also expected that some recordings will be attractive and used for Japanese Studies courses, not just for law courses.

Potential interviewees:

(i) In a first stage, from mid-November until mid-December, the project team will schedule and conduct interviews (or otherwise invite one-way podcast recordings) focusing on the following topics and respective co-lecturers from the February 2020 Kyoto and Tokyo Seminars in Japanese Law, co-hosted by ANJeL (core institutions) and Ritsumeikan University Law School:

  1. Introduction to the Japanese Legal System

Prof. Kent Anderson (Australian National University) & Prof. Tetsuro Hirano (Ritsumeikan University, School of Law) [interviewed by A/Prof Heather Roberts]

2. Criminal Justice & Law

Prof. Makoto Ibusuki (Seijo Univ.) & Prof. Kent Anderson (ANU)

3. Politics and Constitutional Law

Prof. Giorgio Colombo (Nagoya University) & Prof. Akihiko Kimijima (Ritsumeikan University) [interviewed by A/Prof Heather Roberts and/or Melanie Trezise]

4. Civil Justice and Law

Prof. Yoko Tamura (University of Tsukuba, Law School) & Prof. Luke Nottage (The University of Sydney/ USyd)

5. Arbitration and ADR

Prof. Giorgio Colombo (Nagoya University) & Prof. Nottage (USyd)[interviewed by Nobu Teramura]

6. Working as International Attorneys in Japan:

Mr. Jiri Mestecky (Attorney at Law, Partner, Kitahama Partners) & Mr. Yoshihiro Obayashi (Partner, Yodoyabashi &Yamagami Legal Professional Corporation/ Ritsumeikan School of Law Graduate) Osaka [interviewed by Melanie Trezise]

7. Government and Law

Prof. Narufumi Kadomatsu (Kobe University) & Prof. Wolff (QUT)

8. Gender and Law

Prof. Kyoko Ishida (Waseda University) & Prof. Wolff (QUT)

9. Contracts, Consumers & Law

Prof. Kenji Saigusa (Waseda University) & Prof. Nottage (USyd)

10. Pop Culture & Law

Prof. Wolff (QUT) [interviewed by Melanie Trezise]

11. Introduction to the Japanese Economy and Corporate Governance

Prof. Souichirou Kozuka (Gakushuin Univ.) & Prof. Leon Wolff (Queensland University of Technology/QUT)

12. Labour Law

Prof. Takashi Araki (University of Tokyo) & Prof. Wolff (QUT)

13. Finance and Law

Mr. Akihiro Wani (Senior Counselor/ Morrison & Foerster) & Prof. Tetsuo Morishita (Sophia University) [interviewed by Melanie Trezise]

14. Tax Law

Mr. Justin Dabner [now retired as A/Prof @] (James Cook University) & [interviewed by] Mr. Micah Burch (USydney)

(ii) In a second stage, for recordings mostly probably over January 2021, the project team will also reach out and connect with co-organisers and past co-lecturers for some (joint or separate) recordings, thus making them feel still part of this group and more likely therefore to contribute to future Seminars or other collaborations with Australia. This cohort includes Profs Chihara Watanabe (Ritsumeikan), Noriko Kawawa (Doshisha), Tomohiro Yoshimasa (Kyoto University), Tatsuya Nakamura (Kokushikan University) and Michelle Tan (recently retired and now director of Seikyo).

Past ANJeL Visitors we may record include Profs Miho Aoi (Gakushuin), James Claxton (Rikkyo), Marc Dernauer (Chuo) and Towa Niimura (Seikei University – who also has observed the Kyoto and Tokyo Seminar classes). Among Japanese Law scholars further afield, in the USA we will approach some senior scholars in the US (Profs John Haley, Frank Upham, Daniel Foote and Mark Ramseyer) as well as some younger ones (Profs Annelise Riles, Mark West); and similarly in Europe (eg Profs Harald Baum, Dimitri Vanoverbeke and Beatrice Jazulot) as well as other parts of Asia (eg Chulalongkorn University Prof Sakda Thanitcul).  

Comparing Case Disposition Times for Judgments related to International Arbitration (& Bibliography for Australia)

As elaborated in (abstracts of) chapters 4 and 5 of my book by Elgar forthcoming in February 2021, comparing international arbitration in Australia and Japan in regional and global contexts, the case law in both countries applying UN instruments (then New York Convention and Model Law) has shared an internationalist pro-arbitration trajectory. This can be seen also through the secondary literature on international arbitration law published in Australia in recent years, listed on the Blog here through to end-2014 and published subsequently as listed at the end of this posting below (with thanks to CAPLUS intern James Tanna).

However, this shift has really only become more consistent in Australia over the last decade, as indicated also with Nobu Teramura et al here. The tardiness is partly due to residual more English approaches to arbitration law and dispute resolution generally. Another reason arises because Federal and diverse State/Territory courts share jurisdiction over International Arbitration Act (IAA) matters – making it slower and hard to move in a consistent direction.

A. IAA-related Case Disposition Times in the Federal Court of Australia

A related challenge for Australia is that even when the outcome rightly upholds an international arbitration agreement or award, IAA-related case disposition times in Australian courts seem to have remained quite lengthy. In 2013 and (with Diana Hu) in 2016 I published articles analysing timeframes taken by the Federal Court (arguably the most pro-arbitration over the last 15 years). Statistical analysis showed that they had not changed much in the three years before the 2010 IAA amendments that adopted almost all the 2006 revisions to the Model Law (now also being considered by Japanese law reformers).

For chapter 5 of the Elgar book, I added a statistical analysis for 21 significant IAA-related Federal Court of Australia cases (listed in this PDF) filed from August 2016 (WDR Delaware) and decided by July 2020 (although not counting Energy City Qatar, as the first-instance decision of 16 July 2020 to enforce the foreign award has been appealed). These 21 included two judgments that were not directly but still somewhat related to the IAA, and which largely cancel each other out for timeframes. One is another judgment in the Sino Dragon dispute, where Beach J decided quite quickly (1.6 months) and briefly not to follow eg Hong Kong and apply an “indemnity costs in principle” approach to failed challenges to awards. The second was a judgment in the Rinehart trust domestic arbitration under the Commercial Arbitration Act, but discussing also the IAA.

Overall, the average case disposition time was 8.1 months, with a median of 5.2 months, with these figures largely unchanged if we exclude both of the last-mentioned cases. If we then exclude an outlier (Sanum, 30.8 months to final judgment), the longest case disposition time becomes 18.4 months (Dalian Huarui), still with a median of 5.2 but standard deviation dropping from 7.3 to 5.2 months. Overall, these typical timeframes for the four years from mid-2016 do suggest some improvement compared to the three preceding three-year periods (see summary Table 5.2 here)

However, it remains disappointing that the numbers of cases being contested across all Australian courts have remained at quite high levels, rather than lawyers bringing fewer cases as might have been hoped under clearer and more pro-arbitration law through the 2010 (and 2015) amendments plus related case law. Figure 5.6 (here) charts a significant step up in litigation decided in the three calendar years after the 2010 amendments, and indeed a second step up over 2014-18, suggesting enduring formalisation around international arbitration in Australia. However, a significant proportion of judgments in 2017-8 made only passing reference to the IAA (thus being categorised “Other”), and total judgments rendered annually (especially non-Other) started to drop back from 2017. Nonetheless, the data analysis for 2020 only ran until end-August, and even if annual cases stabilise at around 2018-19 levels there will still have been a significant step-up compared to 2010.

It would also be interesting to compare case disposition times in non-federal courts in Australia, and in courts across Japan, as well as checking if Japanese judgments related to international cases under its Arbitration Act have increased much since its enactment in 2003. Unfortunately, it is much harder to obtain such data, and also to generalise from the Japanese case filings as not all judgments are reported (unlike in Australia including via Austlii).

B. Secondary Literature on International Arbitration in Australia since 2015

B.1 Books, chapters and journal articles

Evans, P. and G. Moens, eds (2015). Arbitration and Dispute Resolution in the Resources Sector An Australian Perspective. Cham, Springer International Publishing.

Holmes, M. and C. Brown (3rd ed 2018). The International Arbitration Act 1974: A Commentary, LexisNexis.

Lewis, D. (2016). Interpretation and Uniformity of the UNCITRAL Model Law on International Commercial Arbitration: Australia, Hong Kong and Singapore. Kluwer

Nottage, L. (2021). International Commercial and Investor-State Arbitration: Australia and Japan in Regional and Global Contexts Cheltenham, Edward Elgar.

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Allsop, J. (2018). Commercial and Investor-State Arbitration: The Importance of Recognising Their Differences. ICCA Congress 2018. Sydney.

Carroll, L. and F. Williams. (2019). “Australia: Investor-State Arbitration Laws and Regulations 2020.” from https://iclg.com/practice-areas/investor-state-arbitration-laws-and-regulations/australia.

Dickson-Smith, K. D. and B. Mercurio (2018). “Australia’s Position on Investor-State Dispute Settlement: Fruit of a Poisonous Tree or a Few Rotten Apples?” Sydney Law Review 40(2): 213.

Garnett, R. (2017). “Arbitration of Cross-Border Consumer Transactions in Australia: A Way Forward?” Sydney Law Review 39(4): 569-599.

Holmes, M., L. Nottage and R. Tang (2016). “The 2016 Rules of the Australian Centre for International Commercial Arbitration: Towards Further ‘Cultural Reform’.” Asian International Arbitration Journal 12(2): 211-234.

Kawharu, A. and L. Nottage (2018). “Renouncing Investor-State Dispute Settlement in Australia, Then New Zealand: Déjà Vu.” Sydney Law School Research Paper 18/03.

Kawharu, A. and L. Nottage (2018). “The Curious Case of ISDS Arbitration Involving Australia and New Zealand.” University of Western Australia Law Review 44(1 2): 70.

Kawharu, A. and L. Nottage (2018). Foreign Investment Regulation and Treaty Practice in New Zealand and Australia: Getting it Together in the Asia-Pacific? International Investment Treaties and Arbitration Across Asia. L. Nottage and J. Chaisse, Brill | Nijhoff: 443–485.

Kawharu, A. and L. Nottage (2019). Towards an Asia-Pacific Regional Investment Regime: The Potential Influence of Australia and New Zealand as a Collective Middle Power. J. Chaisse. Cambridge, Cambridge University Press.

Kurtz, J. and L. Nottage (2015). “Investment Treaty Arbitration ‘Down Under’: Policy and Politics in Australia.” ICSID Review – Foreign Investment Law Journal 30(2): 465-480.

Linderfalk, U. (2017). “Philip Morris Asia Ltd. v. Australia – Abuse of Rights in Investor-State Arbitration.” Nordic journal of international law = Acta scandinavica juris gentium 86(3): 403-419.

Luttrell, S. and I. Devendra (2015). “Inherent jurisdiction and implied power to stay proceedings in aid of arbitration: ‘A nice question’.” Journal of International Arbitration 32(5): 509.

Luttrell, S., C. Hassall, V. Lemaic and M. d. Marco. (2020). “International Arbitration 2020: Australia.” from https://practiceguides.chambers.com/practice-guides/international-arbitration-2020/australia.

Monichino, A. (2015). “The future of international arbitration in Australia.” Victoria University Law and Justice Journal 5(1): 60-74.

Monichino, A. (2016). “Arbitration Downunder – Two Steps Forward, One Step Back; Samsung C&T Corporation v Duro Felbuera Australia Pty Ltd [2016] WASC 193”. Australian Construction Law Newsletter 169: 28-31.

Monichino, A. (2016). “Privilege Disputes in International Arbitration.” The ACICA Review 4(2): 46-49.

Monichino, A. and A. Fawke (2014). “Enforcement of Foreign Arbitral Awards, Issue Estoppel and Comity: Developments in Australia”. Asian Dispute Review 16(1): 10-14.

Monichino, A. and A. Fawke (2014). “International arbitration in Australia: 2013/2014 in review.” Australasian Dispute Resolution Journal 25.

Monichino, A. and A. Fawke (2015). “International arbitration in Australia: 2014/2015 in review.” Australasian Dispute Resolution Journal 26.

Monichino, A. and A. Fawke (2016). “International arbitration in Australia: 2015/2016 in review.” Australasian Dispute Resolution Journal 27.

Monichino, A. and A. Fawke (2018). “International Arbitration in Australia: 2016/2017 In Review.” Australasian Dispute Resolution Journal 28.

Monichino, A. and A. Fawke (2019). “International Arbitration in Australia: 2017/2018 in Review.” Australasian Dispute Resolution Journal 29.

Monichino, A. and L. Nottage (2018). “Australia Country Update.” Asian Dispute Review (July 2018).

Monichino, A. and N. Teramura (2020). New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country’. New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution. L. Nottage, S. Ali, B. Jetin and N. Teramura, Wolters Kluwer.

Morrison, J. (2019). “Recent Developments in International Arbitration in Australia 2017-2018.” Journal of International Arbitration 36(3): 416.

Morrison, J. and M. Flanagan (2016). “Recent Developments in International Arbitration in Australia 2015/2016.” Journal of International Arbitration 33(6): 723-737.

Nottage, L. (2014). “Investor-State Arbitration: Not in the Australia-Japan Free Trade Agreement, and Not Ever for Australia?” Journal of Japanese Law 38: 37-52.

Nottage, L. (2015). “Do Many of Australia’s Bilateral Treaties Really Not Provide Full Advance Consent to Investor-State Arbitration? Analysis and Regional Implications.” Transnational Dispute Management 12: 1-18.

Nottage, L. (2015). “Investment Treaty Arbitration Policy in Australia, New Zealand and Korea.” Journal of Arbitration Studies 25(3): 185-223.

Nottage, L. (2015). “The Evolution of Foreign Investment Regulation, Treaties and Investor-State Arbitration in Australia.” New Zealand Business Law Quarterly 21: 266-276.

Nottage, L. (2016). “The TPP investment chapter and investor-state arbitration in Asia and Oceania: assessing prospects for ratification.(Trans-Pacific Partnership Agreement, 2015)(The Age of Mega-Regionals: TPP & Regulatory Autonomy in International Economic Law).” Melbourne Journal of International Law 17(2): 313.

Nottage, L. (2017). Investor-State Arbitration Policy and Practice in Australia. Second thoughts : investor-state arbitration between developed democracies. A. de Mestral. Ontario, Canada, Centre for International Governance Innovation: 377-430 (also in 2016: CIGI Investor-State Arbitration Series Paper 6: http://ssrn.com/abstract=2685941)

Nottage, L. (2020). “Confidentiality and Transparency in International Arbitration: Asia-Pacific Tensions and Expectations.” Asian International Arbitration Journal 16(1): 1-23.

Nottage, L. and A. Ubilava (2018). “Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry.” International Arbitration Law Review 21(4): 111-117.

Nottage, L. and J. Hepburn (2018). Investment Treaty Arbitration Claims Over Tobacco Plain Packaging: Running Out of Puff? Hochelaga Lectures 2017. A. Reyes. Hong Kong, Hong Kong University Faculty of Law.

Nottage, L. and J. Morrison (2017). “Accessing and Assessing Australia’s International Arbitration Act.” Journal of International Arbitration 34(6): 1-43.

Nottage, L. and R. Garnett (2019). The Australian Centre for International Commercial Arbitration. Max Planck Encyclopedia of International Procedural Law H. R. Fabri, Oxford University Press.

Shankar, T. (2016). “Natural justice in international commercial arbitration: TCL air conditioner (Zhongshan) Co Ltd v Castel electronics Pty Ltd.” University of Western Australia Law Review 40(2): [113]-122.

Teramura, N., L. Nottage and J. Morrison (2020). Judicial Control of Arbitral Awards in Australia. The Cambridge Handbook of Judicial Control of Arbitral Awards. L. A. DiMatteo, M. Infantino and N. M.-P. Potin, Cambridge University Press: 175-197.

Trakman, L. (2018). The Reform of Commercial Arbitration in Australia: Recent and Prospective Developments The developing world of arbitration: a comparative study of arbitration reform in the Asia Pacific. A. Reyes and W. Gu. Oxford [UK], Hart Publishing: 251-278.

Trakman, L. E. and D. Musayelyan (2016). The Repudiation of Investor–State Arbitration and Subsequent Treaty Practice: The Resurgence of Qualified Investor–State Arbitration, Oxford University Press. 31: 194-218.

Ubilava, A. and L. Nottage (2020). Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS Policy: The CPTPP, Hong Kong, Indonesia and Mauritius Transparency Treaties. New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution. L. Nottage, S. Ali, B. Jetin and N. Teramura, Wolters Kluwer.

B.2 ACICA Review and other shorter articles

Bernard, C. M. and J. Morrison (2018). “Amendments to the International Arbitration Act 1974 (Cth).” The ACICA Review 6(2): 9-10.

Bonnell, M., D. Mallett, R. Gao and K. Tam (2016). “Philip Morris v Australia: lessons for structuring investments.” The ACICA Review 4(1): 20-21.

Brimfield, F. (2016). “Gutnick v Indian Farmers Fertiliser Cooperative Ltd: Another strong example of Australian Court’s pro-enforcement attitude.” The ACICA Review 4(1): 26-28.

Chung, L. and P. Winch (2016). “Indemnity costs and the enforcement of arbitral awards in Australia.” The ACICA Review 4(2): 16-17.

Dearness, M. and L. Chung (2018). “Case Note: Duro Felguera Australia Pty Ltd v Trans Global Projects Pty Ltd (in liquidation).” The ACICA Review 6(2): 11-13.

Dearness, M., L. Chung and P. Winch (2018). “Case Note: Trans Global Projects v Duro Felguera Australia ” The ACICA Review 6(1): 11-13.

Delaney, J. (2018). “A race to set aside or enforce the award: Hyundai Engineering & Steel Industries Co Ltd v Alfasi Steel Constructions (NSW) Pty Ltd.” The ACICA Review 6(2): 25-27.

Gleeson, M. (2015). “Evidence in international commercial arbitration: Some issues.” Victorian Bar News(158): 40-45.

Govey, I. (2018). “Australia’s Framework for International Commercial Arbitration.” The ACICA Review 6(2): 21-24.

Horrigan, B., I. Bacvic and P. Holloway (2017). “Federal Court Sets Aside International Arbitration Awards and Removes an Arbitrator.” The ACICA Review 5(2): 19-20.

Jones, D. (2019). “Arbitration in Australia – Rising to the Challenge.” The ACICA Review 7(2): 28-36.

Karantonis, J. (2015). “The 3rd Annual International Arbitration Conference in Sydney.” The ACICA Review 3(2): 43-45.

Monichino, A. (2016). “Privilege Disputes in International Arbitration.” The ACICA Review 4(2): 46-49.

Monichino, A. (2017). “Enforcement of Arbitration Agreements Against Non-Signatories: Which Law (the Chicken and the Egg)?” The ACICA Review 5(2): 43-46.

Monichino, A. (2019). “Application of Arbitration Agreements to Non-Signatories: The ‘Through or Under’ Route.” The ACICA Review 7(2): 47-50.

Monichino, A. and M. Carroll (2019), “The Proper Approach to the Interpretation of Arbitration Agreements: Australian High Court Speaks Out”. The ACICA Review 7(1): 8-15.

Nottage, L. (2017). “Book review: Dean Lewis, ‘The Interpretation and Uniformity of the UNCITRAL Model Law on International Commercial Arbitration: Focusing on Australia, Hong Kong and Singapore’ ” The ACICA Review 5(1): 48-51.

Paton, A. and L. Nottage (2019). “Confidentiality versus Transparency in International Commercial and Investment Treaty Arbitration in Australia, Japan and Beyond.” The ACICA Review 7(2): 54-56.

Quan-Sing, J. and L. Hands (2016). “Samsung C&T Corporation v Duro Felbuera Australia Pty Ltd [2016] WASC 193.” The ACICA Review 4(2): 20-23.

Sladojevic, A. (2015). “The International Arbitration Act 1974 – summarising recent legislative amendments.” The ACICA Review 3(2): 39-40.

Teramura, N. (2018). “Australian Perspectives on International Commercial Dispute Resolution for the 21st Century: A Symposium.” The ACICA Review 6(1): 36-38.

Thompson, S. (2016). “Federal Court of Australia imposes substantial costs order as a deterrent to those requesting that it set aside or intervene in Australian International Arbitral Award.” The ACICA Review 4(2): 18-19.

Ubilava, A. (2017). “International Investment Arbitration Across Asia: A Symposium.” The ACICA Review 5(1): 45-47.

Wakefield, J. and K. Narkiewicz (2015). “Australia’s new arbitration regime: five years on.” LSJ: Law Society of NSW Journal(8): 72.

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

[This is the original draft for a posting that was significantly revised and published under a different title on 29 October 2020 by The Conversation, prompting also interviews/podcasts with ABC National Radio “Life Matters” on 5 November 2020 and “Counterpoint” on 14 December 2020. This work is related to my ongoing ARC-funded joint research project DP170103136 and a JCP article published earlier 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) and the Consumer Law Roundtable hosted this year by QUT on 3 December. (Last updated: 1 December 2020.)]

The COVID-19 pandemic has heightened our awareness of safety risks, but also the socio-economic costs needed 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 to manage this new disease.

In consumer law, they and peak NGOs like Choice have also 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, many involving higher-risk children’s products). These specific standards take a long time to develop, usually only after serious injuries or deaths particularly within Australia. A recent example is renewed efforts to introduce a mandatory standard around button batteries, after a third child died in July and the AFL withdrew thousands of bracelets in October 2020. Regulators can also issue bans (around 20) for products found unsafe, but this is an even more reactive response.

Also only after harm arises, manufacturers can be 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 becoming proportionately fewer. Even large class action law firms prefer focusing resources on more straightforward and large-scale claims by shareholders against listed companies for misleading conduct.

The Treasury’s draft RIS invited public comment on various reform options and three perceived problems with Australia’s consumer product safety system. 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. (These seem conservative estimates, especially as the US consumer safety regulator recently US$1 trillion costs annually for that country – although the methodology and assumptions for that estimate are not set out in the UNCTAD report.)

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 reported a rate similar to Canada, at least on the OECD data, but Canada’s 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 Dr 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. We can anticipate more more consumer product safety problems due to further online sales during the pandemic, and the ACCC issued warnings in April 2020. So far this year, though, annual recalls are down, according to the around 240 by end-October (excluding automobile recalls), compared to around 400 over all of 2019. This drop is likely to be temporary and caused by: (a) pandemic-related recession causing less consumer spending, (b) less time and energy for consumers to complain about unsafe products, (c) businesses struggling with finances and staff so not checking products and conducting or reporting recalls as much, and (d) less regulatory capacity to sweep bricks-and-mortar shops for unsafe products or monitor online platforms (except perhaps the larger ones).

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

Perhaps for similar reasons, the Canadian government website shows a drop in recalls reported there this year too: about 130 by end-October compared to 251 over 2019. That website also curiously records fewer recalls annually for “consumer products” (excluding vehicles, foods and healthcare products) than reported on the OECD portal, suggesting Canada’s recall rate per capita may instead be significantly lower than Australia’s. Importantly, it shows a significant drop in annual recalls from 2009 (306) and 2010 (299) to 2011 (258) and 2012 (236), followed by annual recalls averaging around 250 consistently from 2013-2019. The GSP introduced by the Canada Product Safety Act 2010 therefore seems to have had a positive impact, shifting supplier mindsets towards adopting a more pro-active approach including better safety assessments before putting goods onto the market. Singapore also reported a drop in unsafe children’s products found there the year after it introduced a form of GSP through 2011 Regulations.

In further contrast to Australia, the USA reported significantly fewer recalls following the introduction of third-party conformity assessment for toy exporters after problems emerged particularly with China-sourced products around 2008. Dr Niven et al further note that Australian recall notices do not need to include some significant information, eg regarding (even de-identified) injuries. Many Australian recalls of child products also involve breaches of the mandatory standards that have actually been set. (For more details, see her PhD thesis now available here.)

Our regulators could try to sanction local suppliers more for such breaches. But introducing a broader GSP would encourage a “paradigm shift” needed among Australian firms. As discussed in my article, this ACL reform could complemented (but not replaced) by some of the other RIS options, and/or a “product safety substantiation notice” power (mirroring ACL s219, allowing regulators to require suppliers to substantiate claims or misrepresentations that might be misleading).

Introducing a GSP would make Australian suppliers 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 (more) 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 from government recalls data 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’

[Updates: On 24 March 2022 Kyoto University awarded me an LLD by publications for this book. In February 2022, Transnational Dispute Management published a report of (Young-OGEMID listserv) Q&A about these selected essays on international arbitration. The book was formally launched by Chief Justice Allsop of the Federal Court of Australia on 17 June 2021, and has attracted several favourable reviews (see extracts after the book Endorsements below).

The 160,000-word manuscript was published by Elgar, in February 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, eg our recent Kluwer book on new frontiers in Asia-Pacific international dispute resolution). My short video recording outlining the book can also now be viewed via Youtube at https://youtu.be/mlSJcitswX4, the introductory chapter is here, and a 35% discount order form is here.]

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 arbitration.

Endorsements:

‘This important work by an eminent scholar in the field of international commercial arbitration provides a valuable opportunity to step back from day-to-day events and experiences and view them from the perspective of an analytical framework, enabling important trends, policy issues and principles to be identified. Combining intellectual academic rigour with practical applications and illustrations of the principles discussed, the author draws upon empirical research and established trends to predict likely developments in arbitration in a post-pandemic global economy.’
– Wayne Martin AC QC, Francis Burt Chambers and former Chief Justice of Western Australia

‘This is a much-awaited book that illuminates international arbitration perspectives, policies, and practices of two major economies in the Asia-Pacific region. Particularly, perhaps reflecting the relative paucity of ISDS cases involving Japanese investors or the Japanese government, there is a general paucity of prior scholarship on Japan’s ISDS approaches, and this book fills this gap. At a time when ISDS is at a crossroads, the author’s acute analysis of state practice and policy formation based on analytical frameworks of “localised globalism” and “in/formalisation” provides invaluable guidance for domestic and international policy-makers, private practitioners, and academics.’
– Professor Tomoko Ishikawa, Nagoya University, Japan

‘Cross-border dispute settlement in the Asia-Pacific has grown increasingly complex and dynamic in recent years. In this book, one of our keenest observers of the region traces evolving developments in Australia and Japan, examining the trajectories of commercial and investor-state arbitration within a common framework. We could have no better guide to the shifts, stops and starts that have characterized this evolving field of law and practice.’
– Professor Tom Ginsburg, University of Chicago Law School, USA

Reviews

“Anyone who practices international arbitration in the Asia-Pacific region or is a scholar of the field will enjoy this book and find it useful as a resource in the years ahead” Dr Sam Luttrell[i]

“a genuine tour d’horizon, with insights going far beyond the two jurisdictions of Australia and Japan … a fascinating analysis of the development of commercial and investment arbitration over the last two decades” Dr Lars Markert & Dr Anne-Marie Doernenberg[ii]

“of interest to a fair range of parties concerned with international arbitration” Eugene Thong[iii]

“useful for readers interested in the history of international commercial arbitration or investor-state arbitration; or for those especially interested in how each of these have played out within either Australia or Japan” Taryn Marks[iv]

Young-OGEMID Author Interview Professor Luke Nottage (2021)” (16 page Q&A about the book) Reported by Piergiuseppe Pusceddu[v]


[i] Clifford Chance, Perth: 96 Aust LJ 142-44 (2022) at 144.

[ii] Nishimura and Asahi, Tokyo; 54 JJL (2022) 307-13 at 309.

[iii] Arbitration Chambers, Singapore: 17(2) AIAJ 177-81 (2021)

[iv] Stanford University: 49(2) Intl J Legal Info 134 (2021) at 136

[v] University of Tilburg: November 2021 listserv discussion edited and published in Transnational Dispute Management (Feb 2022) https://www.transnational-dispute-management.com/young-ogemid/author-interviews-luke-nottage.asp

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.