[Book reviews &] Guest Blog by Michael Hwang: Foreword, for Nottage, Ali, Jetin & Teramura (eds) New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution (Wolters Kluwer, 2021)

[Update: extracts from reviews of this book are reproduced after this Guest Blog, based on the Preface] Written by: Dr Michael Hwang SC

This is a book which looks forward to possible future outcomes in the development of cross-border dispute resolution in the Asia-Pacific region, focusing on major economies in East and South Asia, as well as neighbouring countries such as Australia which are closely linked economically and geographically. The principal questions posed are: (a) whether international commercial arbitration can improve its attractiveness through law reform and case law development, overcoming criticisms about cost and delay; (b) whether growing concerns about ISDS issues in current investment treaties will lead to Asian states to become rule-makers in international investment law, rather than continue as rule takers; (c) whether innovations in existing or new fields can assist the Asia-Pacific region to develop international dispute settlement mechanisms further. It is therefore an exciting book that challenges existing procedures and frameworks for cross-border dispute resolution both in commercial as well as in treaty arbitration, rather than being another book which is simply descriptive of the existing mechanisms (valuable as such books might be).

There are clearly catalysts for change within the existing framework of dispute resolution in Asia, and several could be real game changers, like China’s Belt and Road initiative (examined in detail in Chapter 7) and the Singapore Convention on Mediation (Chapter 14). The team of writers specially assembled for this project have impressive credentials, led by the prolific and perceptive Professor Luke Nottage, and supported by several authors whom I have the privilege of knowing personally, and whose work I can wholeheartedly recommend as being worth reading, both for their knowledge and experience, but particularly for their insight.

The various authors are not simply writing about existing practices and procedures in the region, but are examining the situation on the ground with a critical eye, and making informed observations about where changes are needed and educated guesses about the chances of reforms being successful, and the consequences if they are not. It has been written in the time of COVID-19 and accordingly points out the special challenges to the field of international dispute resolution in this unprecedented situation. Those include whether lawyers can adapt to new technological solutions to overcome the difficulties of conducting virtual hearings, and whether players in the field of dispute resolution can continue to afford the time and cost of long drawn-out forensic procedures to resolve the inevitable disputes that have been caused by the pandemic, or whether there will be added impetus to use mediation in place of confrontation. There are also protectionist issues affecting the future of maintaining the rule of law in settling cross-border commercial disputes. Local judges might be influenced by the fact that certain apparent breaches of contract have been caused by events beyond the control of their local businesspeople, and the law may become stretched or even disregarded for what may be perceived to be a fairer commercial solution, when performance of a contractual obligation has been rendered impossible in the light of conditions brought on by the pandemic. Such situations could lead possibly to foreign judgments and/or foreign arbitration awards not being recognised or enforced, relying on an overly liberal interpretation of the doctrine of public policy to justify such non-enforcement.

There are also challenges arising from internal social and political challenges in certain Asian jurisdictions such as Malaysia and Hong Kong, where rule of law issues may affect investor confidence in those territories. This mistrust of the application of the rule of law will likely also lead to an international lack of confidence in the reliability of the dispute resolution system of the countries concerned, and Hong Kong in particular may find it difficult to maintain the hitherto proud record of independence and efficiency of its courts and arbitral tribunals. And there are legacy challenges which were there in several Asian countries before Covid-19 and remain as challenges to be overcome, without which their attractiveness as international investment and commercial centres will surely decrease if the legacy problems are not resolved.

The best introduction to this book is actually to start from the succinct final chapter (Chapter 15) jointly authored by Professors Anselmo Reyes, Shahla Ali and Nobumichi Teramura. This gives an excellent summary of the aims and contents of the 14 preceding chapters, and will highlight to readers which chapters might be of particular interest and therefore help determine in which order to read which chapters, although all 14 are worth reading.
I therefore congratulate Professors Nottage, Ali, Jetin and Teramura and their team of other authors on producing a timely and lively study. It will certainly stimulate ideas and discussion among its readers and perhaps also contribute to some positive changes in the jurisdictions which are the subject of this critical study.

Book Review key extracts:

“a smorgasbord of international dispute resolution for sophisticated palates. Regardless of the extent of expertise or experience, everyone will learn something new or more from reading it” Dr Winnie Ma FCIArb[i]

“Considering its expert observations and analytical depth, the book can be highly recommended to newcomers and experts on Asia-Pacific dispute resolution” Dr Lars Markert & Dr Anne-Marie Doernenberg[ii]

“The value of this exciting book lies in its challenges to existing procedures and frameworks for cross-border dispute resolution, both in commercial and treaty-based (investor-State) arbitration, rather than being simply descriptive of the existing mechanisms” Dr Somesh Dutta[iii]

[i] Arbitration Chambers, Singapore: Arbitration (2021) 441 at 447.

[ii] Nishimura and Asahi, Tokyo; 54 JJL (2022) 307-13 at 312.

[iii] Max Planck Institute for International Procedural Law, Luxembourg: Transnational Dispute Management (July 2022) at 1.

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, Bios & Webinar

Below are summaries and author bios of the 15 chapters in our Kluwer book published around Christmas for January 2021, building on a joint HKU/USydney project throughout 2019 background and draft bios here), with a Foreword by Michael Hwang SC here. Please consider registering or telling your networks about a free Webinar with the co-editors, some authors and others, scheduled for Tuesday 4 August 2020 5-6pm (Sydney time): https://law-events.sydney.edu.au/talkevents/beyond-the-pandemic-new-frontiers-in-asia-pacific-international-dispute-resolution . [A webinar recording can now be found via https://www.sydney.edu.au/law/news-and-events/podcasts.html or on Youtube.]

  1. Introduction: New Frontiers in Asia-Pacific Trade, Investment and International Business Dispute Resolution –Luke Nottage & Bruno Jetin

Abstract: Asia-Pacific trade and investment flows have burgeoned over recent decades, albeit impacted by China-US trade tensions and especially the COVID-19 pandemic (§1.02). International investment agreements have proliferated to liberalise and protect investments (§1.03), mostly adding the option of investor-state dispute settlement (ISDS). Asia-related ISDS cases have also started to grow, albeit somewhat belatedly (§1.04), complementing a more longstanding upward trend in international commercial arbitration (ICA) cases involving Asian parties filed in the region as well as the traditional Western centres (§1.05). The eastward shift in international dispute resolution has already involved initiatives to improve not just support for ICA and ISDS arbitrations, but also to develop alternatives such as international commercial courts and mediation. Core arguments from ensuing chapters (§1.06) cover the main existing venues for international dispute resolution in Asia (China, Hong Kong and Singapore) but also some emerging contenders (Japan, Malaysia, India and Australia). Overall (§1.07), can ICA venues improve their attractiveness through law reforms, case law development and other measures, despite growing concerns about costs and delays? Will some emerging concerns about ISDS prompt Asia-Pacific states to become more active “rule makers” in international investment law? How might these issues be affected by the COVID-19 pandemic?

Keywords: international trade, foreign direct investment (FDI), free trade agreements (FTAs), international investment treaties, international economic law, arbitration, mediation, international commercial courts, Asia, COVID-1

2. An International Commercial Court for Australia: An Idea Worth Taking to Market – Marilyn Warren & Clyde Croft

The time has come for Australia to join others in establishing a new “International Commercial Court” as another international dispute resolution option especially for the Asia-Pacific region. This chapter outlines the existing international legislative architecture (the 1958 NYC for international arbitration, inspiring the 2005 Hague Choice of Court Convention), and the models provided by London’s venerable Commercial Court and since 2015 the Singapore International Commercial Court (including the latter’s composition, jurisdiction, procedure and confidentiality provisions, appeals, and cross-border enforceability of its judgements – facilitated by Singapore ratifying the 2005 Hague Convention). It uses these topics to frame the proposal for an Australian International Commercial Court, including the possibility of allowing its litigants to exclude the application of the Australian Consumer Law (which otherwise may apply also to many business-to-business disputes). It concludes that the COVID-19 pandemic has bolstered the case for such a new Court, by minimising the obstacle of Australia’s physical distance as litigation has had to move rapidly online, and because the pandemic’s economic dislocation will undoubtedly lead to more cross-border disputes.

Keywords: international arbitration, international litigation, international commercial courts, Australia, Singapore, United Kingdom, COVID-13.

3. New Frontiers for International Commercial Arbitration in Australia: Beyond the ‘Lucky Country’ – Albert Monichino & Nobumichi Teramura

Abstract: Australia is not a lucky country in the context of international commercial arbitration (ICA) due to its geographical isolation. However, the problem of remoteness has luckily been ameliorated since the COVID-19 pandemic, thanks to the dramatic spread of video-conferencing technologies in arbitrations and even in some court proceedings. ‘Luck’ can no longer excuse Australia for running behind other regional competitors. Analysing recent cases in Australian judiciary, this chapter puts forward seven proposals for legislative reform that may be useful for Australia to attract more ICA cases on its shores: establishing an indemnity costs principle for failed challenges in ICA matters, notably regarding arbitral awards; enabling Australian courts to issue subpoenas to support foreign arbitrations; clarifying choice of law rules on the existence and scope of arbitration agreements; limiting or excluding the application of Australian Consumer Law to cross-border business-to-business transactions; defining ‘Australian Law’; provisions to catch up with recent arbitration innovations; clarifying arbitrability of trust disputes; and centralising judicial power for ICA appeals. Implementing those proposals will pave the way for Australia to become an attractive arbitration hub in the Asia-Pacific region.

Keywords: Australia, international commercial arbitration, International Arbitration Act, Commercial Arbitration Act, law reform, COVID-19, e-proceedings. 

4. Confidentiality and Transparency in International Arbitration: Asia-Pacific Tensions and Expectations – Luke Nottage

Abstract: Confidentiality is considered a significant advantage for international commercial arbitration over cross-border litigation, as seen in rules of most arbitral institutions. Automatic (opt-out) confidentiality is also now found in many national laws, including statutory add-ons to the UNCITRAL Model Law and/or through case law for example in New Zealand, then Hong Kong, Singapore, Malaysia, and eventually Australia. Yet there remain variations in the timing of these developments as well as the scope and procedures associated with exceptions. There is also no confidentiality provided in Japan’s later Model Law adoption, although parties mostly choose the JCAA so opt-in to its Rules, which have gradually extended confidentiality obligations. Another complication is growing public concern over arbitration procedures through investor-state dispute settlement (ISDS), particularly in Australia since an ultimately unsuccessful treaty claim by Philip Morris. Statutory amendments in 2018 reverse automatic confidentiality for Australia-seated ISDS arbitrations applying the 2014 UNCITRAL Rules on Transparency. Concerns over ISDS may even impede Australia enacting provisions for confidentiality of arbitration-related court proceedings. These provisions could not be revised recently in New Zealand, against the backdrop of its new government’s anti-ISDS stance. This chapter elaborates such expectations and tensions regarding the double-edged sword of confidentiality in international arbitration, focusing on Australia and Japan in regional context.

Keywords: international commercial arbitration, investor-state dispute settlement (ISDS), confidentiality, transparency, Australia, Japan, Asia, costs, delays, law reform

5. Novel and Noteworthy Aspects of Australia’s Recent Investment Agreements and ISDS Policy: The CPTPP, Hong Kong, Indonesia and Mauritius Transparency Treaties – Ana Ubilava & Luke Nottage

Abstract: This chapter updates on recent investment treaty practice by Australia, which attracted regional and global attention when a centre-left government over 2011-13 declared Australia would no longer agree to ISDS provisions when negotiating further treaties. The chapter compares substantive commitments and ISDS provisions in Australia’s treaties signed with Indonesia and Hong Kong in 2019 (IA-CEPA and AHKIA) compared especially with the mega-regional CPTPP signed in 2018. The new bilateral treaties remain quite heavily influenced by US-style drafting, epitomised by the CPTPP. The chapter then elaborates on the costs and delays associated with ISA. It examines empirical studies, then relevant provisions of the three new treaties, including an innovative investor-state mediation provision in IA-CEPA probably proposed by Indonesia. The chapter also considers transparency of proceedings and outcomes. It again examines mainly CPTPP, IA-CEPA and AHKIA, but also a parliamentary inquiry into Australia ratifying the Mauritius Convention. This seeks to retrofit extensive transparency provisions on pre-2014 treaties between Australia and other states that might also accede to that framework Convention. More bipartisanship may be emerging in domestic politics regarding international investment treaty-marking, so Australia is now better placed to play a more active role especially in the Asia-Pacific region.

Keywords: Investment treaties, Investor-State Dispute Settlement (ISDS), Australia, Hong Kong, Indonesia, mediation, arbitration, transparency, costs, delay

6. New Frontiers in Hong Kong’s Resolution of ‘One Belt One Road’ International Commercial and Investor-State Disputes – Shahla Ali

Abstract: Given the rapid increase in Chinese outward foreign direct investment since the start of the ‘One Belt One Road’ Initiative (OBOR), international commercial and investor state disputes involving Chinese and Hong Kong investors will likely multiply. Given the significance of Hong Kong as a fulcrum for OBOR project financing and logistics, understanding Hong Kong’s approach to the resolution of OBOR disputes will offer a window into the region’s new frontiers in commercial and investor-state dispute resolution.

Keywords: international commercial arbitration, mediation, investment treaties, investor-state dispute settlement (ISDS), Hong Kong, China, Belt and Road

7. Harmonising the Public Policy Exception for International Commercial Arbitration along the ‘Belt and Road’ – Gu Weixia

Abstract: In context of a rising volume of cross-border transactions generated by the BRI, this chapter argues that a robust legal framework for dispute resolution is required to forge investor confidence and enable BRI’s integral goal of economic integration. In light of the substantial levels of harmonization among arbitration laws, arbitration is arguably constitutes the primary vehicle for international commercial dispute resolution in an economically integrated Asia under the BRI. Against this backdrop, this chapter argues that the BRI provides a unique opportunity to contemplate the possibility of regional harmonization, as within the Asian economies along the BRI, of the “public policy” exception to arbitral award enforcement. Such an arbitration initiative in Asia, in which China is anticipated to take a pro-active role, holds much potential to project renewed momentum on China as an engine of not only economic power, but also “soft power” transformation in pioneering international legal norms.

Keywords: international commercial arbitration, New York Convention, UNCITRAL Model Law, China, Belt and Road

8. Recent Developments in China in Cross-Border Dispute Resolution: Judicial Reforms in the Shadow of Political Conformity – Vivienne Bath

Abstract: The rapid expansion of China’s international trade and investment in the 21st century has necessarily brought with it the need for modern and effective cross-border dispute resolution mechanisms.  At the international level, China is playing an active role in the review of investor-state dispute settlement in UNCITRAL Working Group III and participating in dispute resolution developments in the WTO.  Domestically, the Supreme People’s Court has been working to set up new institutions (the China International Commercial Court), improve mechanisms for the review and enforcement of arbitral awards and encourage mediation, both domestically and internationally. Much of this activity has been generated and spurred on by the Belt and Road Initiative (BRI) and the anticipated associated increase in cross-border disputes arising from the many commercial transactions involved in the BRI. Its execution also reflects the desire to encourage and expand the international use of Chinese law and build up China as a centre for international dispute resolution. At the same time, however, the Chinese Communist Party is tightening its ideological and administrative control over the courts and judicial system.  This chapter examines and discusses the implications of these recent developments.

Keywords:  China, arbitration, mediation, cross-border dispute resolution, one-stop diversified dispute resolution, investor-state dispute settlement (ISDS), online arbitration, communist party (CCP), Supreme People’s Court (SPC), China International Commercial Court (CICC)

9. Malaysia’s Involvement in International Business Dispute Resolution – A Vijayalakshmi Venugopal

Abstract: Malaysia has had some early but comparatively limited involvement in formally resolving trade disputes, but more engagement in investor-state dispute resolution – including as home state for investors bringing claims, not just as host state respondent. Some companies in Malaysia and its main international arbitration centre have also been involved in domain name dispute resolution. That centre and some other organisations have also long promoted various types of Alternative Dispute Resolution (ADR), with renewed efforts in recent years to develop new procedures and attract more international commercial arbitrations. Malaysia has also been quite active in negotiating free trade agreements (FTAs). This creates a solid platform to comtinuing becoming more of a rule maker in international investment law as well as a significant regional hub for international business dispute resolution services, although Malaysia still has a way to go in both respects compared to larger Asia-Pacific economies and/or more established hubs.

Keywords: Malaysia, World Trade Organization (WTO), free trade agreements (FTAs), international investment treaties, investor-state dispute settlement (ISDS), domain name dispute resolution, settlement

10. Disruption as a Catalyst for International Dispute Services in Japan: No Longer Business as Usual? – James Claxton, Luke Nottage & Nobumichi Teramura

Abstract: The Japanese government, supported by various stakeholders, has recently been attempting to develop Japan as another regional hub for international business dispute resolution services. Tracking this development is important for both theoretical and practical reasons. How it unfolds should reveal which of various theories for explaining Japanese law-related behaviour have more traction nowadays, especially for international commercial arbitration but also for investor-state arbitration. Assessing the new initiatives is also important for legal practitioners and others interested in the practical question of where to arbitrate or mediate cross-border business disputes, particularly in the Asia-Pacific region. This chapter therefore focuses mainly on current attempts to promote existing and new international arbitration centres in Japan as well as the recent establishment of the Japan International Mediation Center – Kyoto. It locates such developments in the context of intensifying competition from other regional venues for dispute resolution services, but also the challenges and potential opportunities created by the COVID-19 pandemic since 2020.

Keywords: international commercial arbitration, investor-state dispute settlement (ISDS), mediation, Japan, culture, COVID-19

11. Litigating, Arbitrating and Mediating Japan-Korea Trade and Investment Tensions – James Claxton, Luke Nottage & Brett Williams

Abstract: In July 2019, Japan introduced measures tightening export restrictions to South Korea on three chemicals critical to the manufacture of consumer electronics. The restrictions prompted an animated response by the Korean government, including World Trade Organization (WTO) consultations and threats to terminate an intelligence-sharing agreement. The controversy also filtered down to the public with boycotts of Japanese products in Korea. Tension between the states has been unusually high since 2018 when the Korean Supreme Court affirmed a judgment against Japanese companies accused of forcing Korean nationals to labour in factories during Japan’s colonial rule. Japan argued that these claims were precluded by a 1965 treaty normalizing post-war relations. While Japan claims that its trade restrictions were not motivated by the judgment, the disputes have contributed to the worst breakdown in cross-border relations in five decades. This chapter evaluates Korea’s trade claims against Japan, means of resolving them, and challenges faced in the WTO dispute settlement system. Alternatives or additions to WTO dispute settlement procedures are considered including claims before the International Court of Justice, interstate arbitration, and investor-state dispute settlement. Mediation offers an effective means to facilitate negotiations and centralise the trade and treaty disputes in a single forum.

Keywords: international trade law, World Trade Organization (WTO), exports, international investment treaties, investor-state dispute settlement (ISDS), arbitration, mediation, Japan, Korea

12. Indian Investment Treaty and Arbitration Practice: Qualitatively and Quantitatively Assessing Recent Developments– Jaivir Singh

Abstract: This chapter provides a perspective of investment treaty practice from India, which lies at the periphery of what is traditionally associated with the Asia Pacific region. While on the periphery, India has signed investment and trade treaties with many Asia Pacific countries and is also involved in disputes with them. India had in fact endorsed a number of investment treaties with many countries around the world but has recently gone on to denounce all of them and seeks to renegotiate fresh treaties using a template provided by a new model treaty that is oriented towards privileging state rights. The chapter begins by a qualitative review of cases that have been instituted against India by investors, followed by a discussion of the many reactions that this has elicited – a new model treaty, subsequent denunciation of treaties, signing of new treaties and  attempting changes in the domestic law as a device to protect foreign investors.  The next half of the chapter assesses these outcomes by looking at econometric evidence pointing to a positive impact of investment treaties signed by India on foreign investment inflows into India, going on to argue that the manner in which state rights have been enhanced in the new treaties – drawing inspiration from trade law – demonstrably curbs investment.

Keywords: foreign direct investment (FDI), international investment treaties, arbitration, econometrics, law reform, India, Australia

13. FTA Dispute Resolution to Protect Health Can Free Trade Agreements and their Dispute Resolution Mechanisms Help Protect the Environment and Public Health? The CPTTP, MARPOL73/78 and COVID-19 – Jiaxiang Hu & Jeanne Huang

Abstract: Preventing or managing a global pandemic such as COVID-19 requires states to strictly comply with the International Health Regulations 2005 (IHR). However, the IHR lacks a strong enforcement mechanism, like many multilateral environmental protection agreements. Over the past fifteen years, several such conventions have been incorporated into free trade agreements (FTAs) to enhance State compliance and therefore promote environmental protection. A typical example is the International Convention for the Prevention of Pollution from Ships and its Protocols (MARPOL 73/78). Vessels, like viruses, are globally mobile. Vessel-sourced pollution also mirrors human-carried viral infection, because the locations of potential harm are unpredictable and widespread. This Chapter examines first whether FTAs (especially mega-regional FTAs) can effectively encourage States to comply with MARPOL 73/78. Through this analysis, it generates implications regarding whether the IHR regime could also rely on new or renegotiated FTAs, or be reformed directly, to enhance state compliance with public health initiatives.

Keywords: free trade agreements (FTAs), environmental protection, public health, COVID-19, WHO, MARPOL, dispute resolution, arbitration, Asia-Pacific

14. Promoting International Mediation through the Singapore Convention – S.I. Strong

Abstract: This chapter seeks to determine whether and what extent the recent promulgation of the United Nations Convention on International Settlement Agreements Resulting from Mediation will promote the use of mediation within the international legal and business communities. The discussion analyses the issue from a unique interdisciplinary perspective, applying concepts from dispute system design, default theory, psychology, and law and economics to both identify and resolve potential problems with the convention. The chapter also includes data from a recent empirical study conducted by the author on the use of mediation in international commercial disputes. Through this discussion, the chapter hopes to identify how individuals and institutions can complement the effect of the convention to support the development of international commercial mediation in the coming years.

Keywords: International mediation, treaty-making, law reform, Singapore Convention, interdisciplinary perspectives

15. Expanding Asia-Pacific Frontiers for International Dispute Resolution: Conclusions and Recommendations – Nobumichi Teramura, Shahla Ali & Anselmo Reyes

Abstract: Asia’s emergence as a global economic powerhouse has corresponded with a prolonged upward trend in international commercial arbitration (ICA) cases involving Asian parties, as well as a belated expansion of investor-state dispute settlement (ISDS) arbitrations involving Asian states or investors. Further accelerating the eastward shift in international dispute resolution, various initiatives to improve support for ICA and ISDS have been taken and alternatives (such as international commercial courts and international commercial mediation) have been promoted. This book aimed to examine significant ‘new frontiers’ for Asia-Pacific cross-border business dispute resolution, focusing on major economies in East and South Asia and countries (such as Australia) that are closely linked economically and geographically. The principal questions posed were: (1) whether existing and new venues for ICA could improve their attractiveness through law reform, case law development, and other measures, despite worries about cost and delay; (2) whether emerging concerns about ISDS-backed investment treaty commitments would prompt Asian states to become rule-makers in international investment law, rather than be mere rule-takers; and (3) whether innovations in existing or new fields might assist the Asia-Pacific region to develop international dispute settlement further. The foregoing chapters have discussed these broad themes, focusing on developments in Australia, Japan, Hong Kong, China, India and Malaysia, while paying attention to broader regional initiatives (such as China’s Belt and Road Initiative (BRI)) and recent international instruments (such as the Singapore Convention on Mediation, in force from 12 September 2020). This concluding chapter highlights key findings in the individual chapters and identifies some challenges for the post-COVID-19 era.

Keywords: international trade, foreign direct investment (FDI), free trade agreements (FTAs), international investment treaties, international economic law, arbitration, mediation, international commercial courts, Asia, COVID-19

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BIOS OF EDITORS AND CONTRIBUTORS

Dr Shahla Ali is Professor and Associate Dean (International) and Deputy Director of the LLM in Arbitration and Dispute Resolution at the Faculty of Law of the University of Hong Kong. Her research and practice center on questions of governance, development and the resolution of cross-border disputes in the Asia-Pacific region. Shahla is the author of Court Mediation Reform (Edward Elgar 2018), Governing Disasters: Engaging Local Populations in Humanitarian Relief (Cambridge University Press 2016), Consumer Financial Dispute Resolution in a Comparative Context (Cambridge University Press 2013), and Resolving Disputes in the Asia Pacific Region (Routledge 2010) and she writes for law journals in the area of comparative ADR. She has consulted with USAID, IFC/World Bank and the United Nations on issues pertaining to access to justice, peace process negotiation training and land use conflict resolution. She serves as a bilingual arbitrator (English/Chinese) with CIETAC, HKIAC (ADNDRC) and SIAC and has served on the IBA Drafting Committee for Investor-State Mediation Rules, the DOJ Mediation Regulatory Committee, the UN Mediation Roster and the FDRC Appointments Committee. Prior to HKU, she worked as an international trade attorney with Baker & McKenzie in its San Francisco office. She received her JD and PhD from UC Berkeley in Jurisprudence and Social Policy and BA from Stanford University.

Dr Bruno Jetin is Associate Professor and Director of the Institute of Asian Studies, University of Brunei Darussalam (UBD). His current work focuses on the ASEAN Economic Community, the One Belt One Road initiative, Chinese investments in Southeast Asia, and the impact of income distribution on growth in Asia. He is also an expert in the automobile industry. Before joining UBD, he was a researcher at the Institute for Research on Contemporary Southeast Asia (IRASEC, CNRS-MAEE, Bangkok) and Associate Professor at the University of Paris 13 Sorbonne Paris Cité, where he obtained his PhD in economics and was Deputy Director of the Research Center in Economics. He was also involved in promoting taxes on financial transactions as alternative sources for financing development as well as innovative regulation of global finance. Bruno’s recent publications include ASEAN Economic Community: A model for Asia-wide Integration? (Palgrave McMillan 2016, edited with Mia Mikic); Global Automobile Demand (Palgrave McMillan 2015, two edited volumes); International Investment Policy for Small States: The Case of Brunei, in International Investment Treaties and Arbitration Across Asia (Julien Chaisse and Luke Nottage eds., Brill 2018, with Julien Chaisse); One Belt-One Road Initiative and ASEAN Connectivity, in  China’s Global Rebalancing and the New Silk Road (B.R. Deepak ed., Springer 2018).

Dr Luke Nottage is Professor of Comparative and Transnational Business Law at the University of Sydney Law School, founding Co-Director of the Australian Network for Japanese Law (ANJeL) and Special Counsel at Williams Trade Law. He specialises in comparative and transnational business law (especially arbitration and product safety law), with a particular interest in Japan and the Asia-Pacific. Luke has or had executive roles in the Australia-Japan Society (NSW), the Law Council of Australia’s International Law Section, the Australian Centre for International Commercial Arbitration, and the Asia-Pacific Forum for International Arbitration. Luke is also a Rules committee member of the Australian Centre for International Arbitration (ACICA) and listed on the Panel of Arbitrators for the AIAC (formerly KLRCA), BAC, JCAA, KCAB, NZIAC, SCIA and TAI. Luke serves on Working Group 6 (examining arbitrator neutrality) for the Academic Forum on ISDS. He qualified as a lawyer in New Zealand in 1994 and in New South Wales in 2001, and has consulted for law firms and organisations world-wide (including ASEAN, the EC, OECD, UNCTAD and the Japanese government). His 16 other books include International Arbitration in Australia (Federation Press, 2010, eds) and International Investment Treaties and Arbitration Across Asia (Brill, 2018, eds). He is or has been Visiting Professor teaching and researching at universities throughout Asia, Oceania, Europe and North America.

Dr Nobumichi Teramura is an Associate at the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS) and Legal Consultant at Bun & Associates (Cambodia). He is the author of Ex Aequo et Bono as a Response to the Over-judicialisation of International Commercial Arbitration (Wolters Kluwer 2020), based on his doctoral thesis from the University of New South Wales that received a PhD Excellence Award when completed in 2018. Nobu also published recently in the Asian International Arbitration Journal (2019) and ASA Bulletin (2020), and has co-authored a chapter comparing Australia forthcoming in Larry di Matteo et al (eds) The Cambridge Handbook of Judicial Control of Arbitral Awards (Cambridge University Press, 2020). Specialising in commercial law, his current research interests include legal integration in Asia and legal development for South East Asian nations severely affected by colonisation and the Cold War, including Cambodia, Vietnam, Laos and Myanmar. He has teaching and research experience in Asia-Pacific jurisdictions including the Philippines, Australia, Japan, Taiwan, Hong Kong, Cambodia and Brunei.

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Vivienne Bath is Professor of Chinese and International Business Law at Sydney Law School and Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). Her teaching and research interests are in international business and economic law, private international law and Chinese law. She has first class honours in Chinese and in law from the Australian National University, and an LLM from Harvard Law School. She has also studied in China and Germany and has extensive professional experience in Sydney, New York and Hong Kong, specialising in international commercial law, with a focus on foreign investment and commercial transactions in China and the Asian region. Representative publications include: Vivienne Bath & Gabriël Moëns, Law of International Business in Australasia (2nd ed., Federation Press 2019); Overlapping Jurisdiction and the Resolution of Disputes before Chinese and Foreign Courts, 17 Yearbook of International Private Law 111-150 (2015-2016) and The South and Alternative Models of Trade and Investment Regulation – Chinese Outbound Investment and Approaches to International Investment Agreements, in Recalibrating International Investment Law: Global South Initiatives (Fabio Morosini & Michelle Ratton Sanchez Badin eds., Cambridge University Press 2018).

James Claxton is Professor of Law at Rikkyo University in Tokyo and Adjunct Faculty for the White & Case International Arbitration LL.M at University of Miami Law School, as well as an independent arbitrator and mediator. He teaches and researches in the fields of international investment law, business and human rights, and international dispute settlement. Previously, he was legal counsel at the International Centre for Settlement of Investment Disputes (ICSID) in Washington and attorney in the international arbitration practices of law firms in Paris. James regularly advises dispute resolution institutions in Asia and is a member of various working groups devoted to improving international dispute resolution systems.

The Hon Clyde Croft AM SC is Professor of Law at Monash University in Melbourne, as well as a commercial arbitrator and mediator. Until retiring in 2019 he was the judge in charge of the Arbitration List, the Taxation List, and a General Commercial List in the Commercial Court of the Supreme Court of Victoria. Prior to his Court appointment in 2009, he practiced extensively in property and commercial law and was an arbitrator and mediator in property, construction and general commercial disputes, domestically and internationally. Dr Croft was appointed Senior Counsel in 2000 and holds the degrees of BEc, LLB and LLM from Monash University, and PhD from the University of Cambridge. He has chaired the Expert Advisory Committee of the UNCITRAL National Co-ordination Committee of Australia (UNCCA) to support UNCITRAL Working Group II (Disputes) since May 2018. He represented the Asia Pacific Regional Arbitration Group (APRAG) at UNCITRAL from 2005 to 2010, revising the UNCITRAL Model Law and Arbitration Rules, and later co-authored A Guide to the UNCITRAL Arbitration Rules (Cambridge University Press, 2013). Dr Croft is a Life Fellow of the Australian Centre for International Commercial Arbitration (ACICA) and of the Resolution Institute (incorporating the Institute of Arbitrators and Mediators Australia), a Fellow of the Arbitrators’ and Mediators’ Institute of New Zealand (AMINZ), the Chartered Institute of Arbitrators, the Australian Academy of Law and UNCCA.

Weixia Gu is Associate Professor at the University of Hong Kong Faculty of Law and Co-Chair of the American Society of International Law Asia-Pacific Interest Group. Her research focuses on international arbitration, dispute resolution, private international law and cross-border legal issues. She is the author, editor, and co-editor of 3 books, including The Developing World of Arbitration in the Asia Pacific (Hart, 2018) and Arbitration in China: Regulation of Arbitration Agreements and Practical Issues (Sweet & Maxwell, 2012). She is the author of more than 50 journal articles and her recent works appear in leading international and comparative law journals, such as the American Journal of Comparative Law, Vanderbilt Journal of Transnational Law, Cornell International Law Journal, among others. Her scholarship has been cited by the US Federal Court 11th Circuit, Texas Supreme Court, Hong Kong High Court, Singapore Law Gazette, and China Council for the Promotion of International Trade. Dr. Gu is an elected Member of the International Academy of Comparative Law, and sits on the governing councils of Hong Kong Institute of Arbitrators and China Society of Private International Law. She also serves as a panel-listed arbitrator in a number of leading arbitration institutions in China and Asia. Before joining the Faculty, she was selected as an Honorary Young Fellow to the New York University Law School in association with her Fulbright Award from the US Department of State.

Dr Hu Jiaxiang is Professor at the KoGuan Law School at the Shanghai Jiao Tong University. His research areas include public international law, international economic law and WTO law. He holds the degrees of BA and MA from Hangzhou University, MPhil in Law from Zhejiang University and PhD from the University of Edinburgh. In the past three decades, Professor Hu has published more than ten books and one hundred articles both in Chinese and English. He has been awarded various honours by the Ministry of Education of China and Shanghai Municipality for his excellence in teaching, and is currently leading several national research programmes.

Dr Jeanne Huang is Associate Professor at the University of Sydney Law School. She was previously Senior Lecturer at the University of New South Wales, and Associate Professor / Associate Dean at Shanghai University of International Business and Economics School of Law in China. She obtained her Doctor of Juridical Science (SJD) degree from Duke University School of Law in 2010. She was a Foreign Research Fellow at the Max Planck Institute for Comparative and International Private Law in Hamburg, and also had research experience at The Hague Academy of International Law, and the Paris-based Academy of International Arbitration Law. Jeanne teaches and researches in the fields of private international law, e-commerce regulation, international investment law and dispute resolution (international litigation and arbitration). She has published four books including Interregional Recognition and Enforcement of Civil and Commercial Judgments: Lessons for China from US and EU Laws (Hart, 2014) and her articles have appeared in many peer-reviewed law journals, with extensive competitive funding include from the China National Social Science Fund. In 2015, she won the First Prize of Excellent Scholarship awarded by the China Society of Private International Law and the Nomination Award of the Dong Biwu Prize for Youth Research in Law. Jeanne serves as an arbitrator at the Hong Kong International Arbitration Center, Shanghai International Economic and Trade Arbitration Commission (Shanghai International Arbitration Center), Nanjing Arbitration Commission and Xi’an Arbitration Commission. She also serves as expert witness on issues of private international law and Chinese law in courts in Australia and the US.

Dr Michael Hwang SC is a Singapore-based international arbitrator. He was the Deputy Chief Justice of the Dubai International Financial Centre (DIFC) Courts upon its establishment in 2005, and subsequently appointed Chief Justice in 2010, retiring at the end of 2018. Throughout that period, he has continued practising as an international arbitrator in commercial and treaty arbitrations. He has written two volumes of essays on international arbitration and international dispute resolution respectively, and was awarded an honorary LLD from the University of Sydney.

Albert Monichino QC is a Melbourne-based barrister and arbitrator, with over 25 years of experience in resolving commercial disputes domestically and internationally. He was appointed Senior Counsel in 2010, and is a former Vice President (Convenor) and Co-Chair of the Arbitration and ADR Section for the Commercial Bar Association of the Victorian Bar (COMMBAR). Albert is a Chartered Arbitrator and Past President of the Chartered Institute of Arbitrators Australian Branch (CIArb, 2014-17), and is a Fellow of CIArb, ACICA, the Resolution Institute and the Singapore Institute of Arbitrators. He writes extensively on international commercial arbitration in Australia and the Asia-Pacific, including an annual Australian survey for the Australian Dispute Resolution Journal.

Anselmo Reyes SC practises as an arbitrator. He was Professor of Legal Practice at Hong Kong University from October 2012 to September 2018. Before that, he was a judge of the Hong Kong High Court from September 2003 to September 2012, when he was in charge of the Construction and Arbitration List (2004-8) and the Commercial and Admiralty Lists (2008-12). He was Representative of the Hague Conference on Private International Law’s Regional Office Asia Pacific from April 2013 to July 2017. He became an International Judge of the Singapore International Commercial Court in January 2015.

Dr Jaivir Singh is Professor at the Centre for the Study of Law and Governance, Jawaharlal Nehru University, having previously taught at the University of Delhi. Trained as an economist at the Delhi School of Economics, University of Delhi, his research work aims at an interdisciplinary exploration of the interaction between the law and the economy. He has published on diverse topics including the Indian Constitution, Regulation, Labour Law, Competition Law, Corporate Law and International Investment Treaties.

Dr S.I. Strong is an Associate Professor at the University of Sydney Law School, specialising in international dispute resolution and comparative law, particularly international commercial arbitration and large-scale (class and collective) suits. Prior to joining the University of Sydney, she taught at the Universities of Cambridge and Oxford as well as Georgetown Law Center and the University of Missouri. Dr Strong is an experienced practitioner, having acted as Counsel at Baker & McKenzie after working as a dual-qualified lawyer (US attorney and English solicitor) in the New York and London offices of Weil, Gotshal & Manges. She has published over 130 award-winning books, chapters and articles in Europe, Asia and the Americas, including Legal Reasoning Across Commercial Disputes: Comparing Judicial and Arbitral Analyses (anticipated 2021), Arbitration of Trust Disputes: Issues in National and International Law (2016), and Class, Mass, and Collective Arbitration in National and International Law (2013) fromOxford University Press as well as International Commercial Arbitration: A Guide for U.S. Judges (2012) from the Federal Judicial Center. Dr Strong’s scholarly work has been translated into Spanish, French, Russian and Chinese and has been cited as authority by numerous state and federal courts and international tribunals. She Strong sits as an arbitrator and mediator on a variety of international commercial and trust-related matters. 

Ana Ubilava is a Research Assistant and PhD candidate at the University of Sydney Law School, where she is in the final stages of completing a thesis on investor-state mediation. She has published on international dispute resolution in several periodicals including the Journal of World Investment and Trade. Ana is also Executive Coordinator of the Australian Network for Japanese Law (ANJeL).

The Hon Marilyn Warren AC QC is a Vice-Chancellor’s Professorial Fellow at Monash University, where she is a member of its Global Leaders Summit, and teaches postgraduate commercial law and international arbitration. She was a long-serving Chief Justice of the Supreme Court of Victoria (2003-2017), and earlier on that Court (1998-2003) included service as the Judge in Charge of the Commercial List and the Corporations List (now combined as the Commercial Court). Professor Warren was a foundation Council member of the Asian Business Law Institute in Singapore. She now also sits as a domestic and international commercial arbitrator, and is a member of the Dawson Chambers Senior Arbitrator Group at the Victorian Bar (where she became Queen’s Counsel in 1997). 

A. Vijayalakshmi Venugopal is Senior Lecturer at Taylor’s University Law School in Malaysia. Her teaching and postgraduate supervisory experience includes WTO law, international dispute resolution, international sale of goods and intellectual property law. She was a visiting lecturer at the University of Rotterdam Business School. She holds Masters degrees in law and educational psychology, and has presented conference papers in these fields. She is the author of three books, and articles in peer-reviewed law journals.

Dr Brett Williams, an Australian Legal Practitioner, is the principal of Williams Trade Law and an Honorary Senior Lecturer at the University of Sydney Law School. His legal practice specialises in the law of the World Trade Organization and of bilateral and regional trade agreements, including representation in WTO dispute settlement, accession issues, and also trade issues under Australian law. He has taught WTO law at Sydney Law School since 2001 and is a Research Affiliate of both the Sydney Centre International Law and the Centre for Asian and Pacific Law at the University of Sydney. His publications include the co-edited book China and the World Trade System (Cambridge University Press, 2003), building on his PhD research, and articles on WTO negotiations on agricultural trade, China’s WTO accession, trade in services and innovations in dispute settlement mechanisms in trade agreements. Brett also serves on the Editorial Board of the Australian International Law Journal. He has held various professional positions, including on the Executive of the International Law Section of the Law Council of Australia (2012-2016) and as inaugural co-chair of the International Economic Law Interest Group of the Australia New Zealand Society of International Law (2010-2012).

Commemorating Prof Dr Harald Baum’s 25-Year General Editorship of the Journal of Japanese Law

[Foreword forthcoming in Issue 50 of the Journal of Japanese Law]

The wonderful Journal of Japanese Law (ZJapanR/J.Japan.L.) has provided inspiration world-wide, even to antipodeans from its earliest days. Prof Harald Baum supported and befriended me since the early 1990s at Kyoto University, where he was on a research sabbatical from Hamburg and I was studying for the LLM and the first part of a PhD. He was researching and editing a comprehensive Handbuch on Japanese business law (published in 1994) thatincluded a selective and carefully-structured bibliography of works in German. We collaborated in developing a bibliography of works in English, published in 1997 after I returned to New Zealand, with ZJapanR/J.Japan.L.’s Issue 3 reproducing a section on “Finding Japanese on the Internet” (such a new technology at that time!).[1] We then combined and expanded these resources into a detailed Bibliography published in 1998 in the United States (with a second edition in 2013).[2] The ZJapanR/J.Japan.L. has continued to publish bibliographies curated by experts to assist academic and other researchers, even (or perhaps especially) in this age of digital information. An example is a bibliography in ZJapanR/J.Japan.L.’s immediate past issue (No 49) surveying scholarship on gender and Japanese law.[3]

This early collaboration with Harald made me realise early on just how much high-quality and wide-ranging research relating to Japanese law was being published in German, English and even other Western languages in various places, including the new ZJapanR/J.Japan.L. Harald and the Journal also generously supported the Australian Network for Japanese Law (ANJeL), when it was created in 2002 by the law schools at Australian National University (ANU), the University of Sydney and a third university in Australia (currently the Queensland University of Technology).[4] Harald became a founding member of ANJeL’s advisory board and helped the DJJV become an ANJeL affiliate. He also kindly invited myself and Prof Kent Anderson (then at ANU, now Higher Education advisor to Australia’s Education Minister) onto the ZJapanR/J.Japan.L. editorial board.

ANJeL helped source potential contributions to the Journal, including occasionally some excellent research papers by Honours or other senior or former students from Australia, significantly helping their careers as well as providing useful perspectives for readers. ZJapanR/J.Japan.L. also published mini-issues, such as some papers for Issue 12 from my conference at the University of Victoria in Canada on “the multiple worlds of Japanese law” (2001), and papers for Issue 34 (2012) from ANJeL’s conference in Asia-Pacific disaster management.[5] Harald made it possible as well to reproduce some ZJapanR/J.Japan.L. material on ANJeL’s website. This helped raise the visibility of the Journal worldwide, but also the new Network, which now brings together over 500 academics, practitioners and others interested in Japanese law not only based in Australia and Japan but also in Germany and other parts of Europe as well as across Asia. ZJapanR/J.Japan.L.’s past issue and this one (No 50) include some papers from an ANJeL conference with and at the University of Pavia, charting and comparing the promising expansion of Japanese law scholarship throughout Europe nowadays.[6] Harald also kindly ensured that a brief activities report on ANJeL was included along with DJJV news in pamphlets sent out with issues of the Journal to its readers. Without all these links to the ZJapanR/J.Japan.L. facilitated by Harald, ANJeL would have had far less impact, so I would like to formally thank him (and Journal colleagues) for this long and fruitful collaboration.

I also express my immense gratitude for Harald’s untiring efficiency and always encouraging good humour in the time-consuming role as general editor over the last quarter century. He did so much more than for most other Journals I have helped or been associated with, where there are often now several general or senior editors given the growing demands associated with managing a reputable academic journal. Harald managed to minimise calls on editorial board members, while using us effectively when needed for reviews or advice, and always produced the goods. I was always excited to receive, like clockwork every six months, the next ZJapanR/J.Japan.L. issue, and I always found many things to read and learn about. Other Japan-specific law journals have fallen by the wayside, but the ZJapanR/J.Japan.L. is an invaluable resource and hope the new general editor and associated colleagues can maintain Harald’s legacy for at least another 25 years.

[1] Harald Baum and Luke Nottage, “Annotated Select Bibliography of Japanese Business Law in Western Languages”, Victoria University of Wellington Law Review 1997, 121-174; “Finding Japanese Law on the Internet: A Sample Odyssey”, ZJapanR/J.Japan.L. 3 (1997) 45-46.

[2] Harald Baum and Luke Nottage, Japanese Business Law in Western Languages: An Annotated Selective Bibliography (Rothman, 1998; 2nd ed Hein, 2013 co-authored also with Joel Rheuben and Markus Their).

[3] By Mark A. Levin and Kallista Hiraoka: see the foreword to the mini-issue by Leon Wolff and others, at https://japaneselaw.sydney.edu.au/2020/04/endurance-in-japanese-law/.

[4] For its new website, see https://www.anjel.com.au/.

[5] These included versions of papers developed for a book, as well as other complementary papers: Luke Nottage, Hitoshi Nasu and Simon Butt (eds), Asia Pacific Disaster Management: Comparative and Socio-Legal Perspectives(Springer, 2013), with a version of the introductory chapter freely available at  https://ssrn.com/abstract=2263953.

[6] For conference presentation abstracts and themes, see https://japaneselaw.sydney.edu.au/2019/04/japanese-law-compared-past-present-and-future/.

Comparing Australia’s Response to COVID-19: Against Whom, What, Why and How? Submission to a Senate Inquiry

Written by: Luke Nottage (Sydney Law School) and Tom van Laer (Sydney Business School)

We welcome this opportunity to provide a Submission to the Australian Parliament’s “Senate Committee on COVID-19” inquiry into the Australian government’s response to the outbreak and pandemic.[1] It seems very early to begin making such an assessment. But we o1ffer from our respective disciplines (comparative law and narratology) some preliminary observations as well as lines for future investigation that may assist Parliament and others contributing to this ongoing debate.

  • Our analysis builds partly on our recent joint contribution to USydney blogs (here and forthcoming).[2] One key message from that contribution is that this pandemic and its response have created a new narrative world, rather like a peculiar disaster movie, that prioritises only certain types of heroes and “expertise”. Another key point is that different countries nonetheless have been able to respond well if they have and can mobilise citizens’ trust in communities and (generally well-run) government.[3] A third lesson is that as Australia keeps trying now to move into a phase of socio-economic revitalisation, a new narrative will emerge and could be framed by political and other leaders.
  • In addition, more broadly, basic methodology in comparative law highlights the importance of working out what to compare and why. This is not obvious even if we try to focus on health outcomes. For this parliamentary inquiry, one question is whether to focus on death rates (which are easier to measure and compare, and the ultimate concern) or infection rates (varying widely depending on national testing regimes, but still maybe useful for projecting rates of deaths and serious treatments). On either measure, Australia has been doing extremely well by global standards.
  • If focusing mainly on COVID-19 death rates in assessing a current or future response, however, another aspect is whether and how to count deaths that are indirectly caused by the virus even over the short- to medium-term. These could include deaths from deferred or delayed surgeries or treatments, a greater than usual number of suicides (prompted by extended isolation) and more fatal traffic accidents (found eg in some parts of Japan despite an overall drop, as travel restrictions emptied streets so cars were driven faster).[4] Even greater complications come from trying to assess long-term consequences for the health and related welfare systems, from lockdown measures that result inevitably in severe economic slowdowns, as the stress from long-term un(der)employment is known to be extensive but hard to measure. It is even more complex to compare such effects across countries, as they have very different baselines regarding unemployment and health/welfare systems.
  • Contemporary experts in comparative law are also very attuned to considering what is being compared in terms of law. It is usually not enough to just compare the “black-letter law” rules set out in primary or secondary legislation. (This is well illustrated by Australia’s public health orders restricting movement, which needed to be further “interpreted”, eg as to what constitutes permitted “exercise”, by health ministers and/or police commissioners.[5]) Nor is it even enough to consider case law interpreting legislation (for which anyway there has been hardly any in Australia relating to pandemic responses, unlike countries like France or Germany with constitutionally-protected civil liberties).[6] We also need to compare norms that are “law-like” in terms of origin (from or supported by the government) and impact. Our blog posting mentions Sweden and Japan as countries where social distancing and travel restrictions are being implemented effectively, even among growing death and infection rates respectively, largely without police-enforced criminal or administrative sanctions. A question for this inquiry is therefore what Australia’s more narrowly legalistic response says about how we operate and our values as a society.
  • Japan’s pandemic response, which mostly appeals to communitarian norms of self-restraint rather than having the government and police enforce strict legal rules (as in Australia, albeit with local differences), is reminiscent of John Haley’s argument that Japan even in modern times is governed quite effectively by Authority Without Power (OUP, 1991). Regarding limited “power”, through legal enforcement mechanisms, legal sociologist Takao Tanase’s Community and the Law (co-translated for Elgar, 2010) highlights that Japan remains acutely aware that rigorously extending a “modern” legal system into socio-economic ordering can often be a double-edged sword – even as it has embarked on another wave of justice system reform this century.[7]
  • Relatedly, a final general lesson from comparative law methodology is to be aware of who we are comparing, ie which legal systems. The US is often an outlier, in its law and related socio-economic system,[8] so this Inquiry and later analyses should probably not focus much on that country. Australian jurists (and others) also often compare the UK, as the “mother country” still especially for basic legal principles, but we now borrow more instrumentally and widely, so should keep looking at other (continental) European as well as Asian countries. In particular, we can learn from the comparatively effective yet diverse pandemic responses adopted in East Asia, as mentioned in our joint blog posting added to this Submission.
  • With these methodological principles in mind, one conclusion that emerges from a preliminary comparative analysis of the pandemic is the importance of “proportionality” and “subsidiarity” principles in regulatory responses (including in international law, such as investment treaties[9] – often examined recently in Australian parliamentary inquiries).[10] As in public and private health, it is risky to jump in quickly with stronger measures, especially where there are uncertainties; to minimise side-effects and unexpected consequences, it is usually better to begin with less intensive interventions. Even when we set a short-term public health goal (like COVID-19 infection or especially death rates), and re-set goals as evidence becomes available or circumstances evolve, the response should be proportionate. It should seek to minimise adverse longer-term health effects (eg physical or mental health problems or suicides from sustained social isolation) and other adverse socio-economic impact (including economic contraction impacting on funding for the health and related social welfare systems). To get the balance right often means devolving decision-making authority to lower levels in government, with better information about constraints and impacts: the subsidiarity principle, well-developed say within the EU.
  • Japan seems to have pursued quite a proportionate response, only increasing restraints after infections started to escalate in March, rather like Sweden (but the latter with a much higher death rate). Yet Japan shows less devolution, arguably due to quite a centralised polity, despite the important policy-making contributions by Tokyo and Osaka governors. As a federal system, Australia has displayed more subsidiarity. Prime Minister Morrison and the federal government did usefully innovate around the Constitution by creating a “national cabinet” including premiers or leaders of all states and territories, to help coordinate pandemic responses in light of public health and economic advice. But states and territories across this huge island continent have still differed in timing, scope and implementation of pandemic responses, linked to infection and death rates but also arguably politics (with more centre-left states intervening more, notably Victoria eg not allowing solo fishing as golf as permitted “exercise”). Responses also vary even at local council level (with eg some even in New South Wales closing off city beaches to surfers, even if not necessarily at risk of police closing them down for exceeding state-level restrictions on crowds).
  • By contrast, New Zealand, a much stricter lockdown was implemented nation-wide with no regional variation, aiming at “eradication” rather than “management” of the virus.[11] In hindsight so far, given similar health outcomes so far compared to Australia, the policy seems less proportionate given the necessarily much greater adverse socio-economic impact (even in a more agrarian economy). Perhaps the policy was influenced by the electoral cycle, with Prime Minister Ardern before the pandemic viewed as facing a close election in September this year[12] – leaders don’t want to go to the polls amidst escalating death rates. But the policy could be implemented nation-wide because New Zealand still probably has what former constitutional law professor (and later Prime Minister) Geoffrey Palmer criticised as “the fastest law in the West”.[13] New Zealand still has a unitary state with only one house of parliament and no constitutional bill of rights, and quickly enacted new lockdown legislation,[14] attracting some belated and muted criticism.[15]
  • Another conclusion from a preliminary comparative analysis is that countries and their residents often tend to display a curious nationalism regarding their respective pandemic responses. New Zealanders mostly still seem very happy with their government’s measures. Perhaps this reflects a psychological defence mechanism to deal with a tough lockdown, or an undercurrent of historical deference to authority (“conservative reformism”, as put in an analysis comparing Japan’s “reformist conservatism” in legal education),[16] or a sense of nationhood premised on New Zealand leading the world (eg first to give votes to women, expanding the welfare state over the 20th century, then deregulating dramatically  in the 1980s while going “nuclear-free”), or more risk aversion generally. Another factor is that New Zealanders may feel a bit threatened by bigger resource-rich Australia. On the last point, it would be interesting to see how say smaller countries with closely linked larger neighbours (like Korea and Japan, or Japan and China) perceive comparative responses. It would also be interesting to research how emigres perceive the pandemic responses in their new countries. Perhaps they are very optimistic and supportive because they want to subconsciously justify their immigration choice (Nottage, as a New Zealander who emigrated to Sydney two decades ago, may be an example), or instead very critical (perhaps linked to different disappointments in having moved country).
  • A further point that emerges from comparative analysis is that wider narratives can differ even towards a global crisis with many commonalities. Trying with difficulty to discern Australia’s narrative towards disasters during its summer of bushfires, Tom van Laer was struck that the British government typically deploys a narrative of “we can endure this”. That was developed first doing the Blitz of London during World War II, and revived to deal with IRA and later terrorist attacks. The narrative in Australia seems much less definite and consistent, and perhaps this is because the country (let alone New Zealand) has fortunately had few natural and other disasters. The narrative response by Japan’s leaders nowadays seems quite British, but is worth investigating further in comparison also with Asian countries. We should also track how narratives are evolving as, at least in Australia and some countries, the COVID-19 pandemic shifts from being primarily a health crisis to being an economic crisis. The related narrative tension was highlighted quite early in Australia by Prime Minister Morrison talking about the pandemic being about both “lives and livelihoods”, but we should track how a new story-line develops compared to the countries, as suggested towards the end of our joint blog posting.
  • In addition, drawing more directly on the disciplinary perspective of narratology (how people use stories to persuade each other), Parliament first would benefit from working more systematically and curatorially with academics in developing and supplying official narratives, props, sites and endorsements. Limiting the potential for contradictions, such collaborations increase the likelihood citizens will cope with returning from the pandemic in a similar way. Parliament too may creatively use the experience of the pandemic. For example, mementos can materialize the successful return from the pandemic to the everyday world, a transition of which to be proud.
  • Second, emotionally distress because of the pandemic experience means that there is a vital role for Parliament to play in intentional interventions designed to help citizens cope with distress step by step. It is one thing to assert that citizens can be convinced that distress is cathartic; research findings instead show transforming that distress into benefits turns out to be complex and complicated, and may require a professional approach. To clarify, a reference to theatre may be helpful. In professional productions, trained actors typically are the ones to build narrative worlds. In “method acting” they blend their primary, ordinary lives into the narrative worlds and let the narrative worlds embrace them. Meanwhile they self-consciously realize the adopted narrative world is important but nonetheless different from the “real” world, a realization which eases coping with distress. The ease of getting out of the narrative of our pandemic world therefore constitutes a skill that drama schools teaching method acting could train citizens to do too. Meanwhile, extraordinary experience providers at large can consider offering intentional interventions like consultations, courses, counselling, discussions, therapies or training.
  • Third, this Senate Committee inquiry speaks to impactful issues in experiential industries more broadly. For example, both COVID-19 and virtual reality involve narrative worlds, which may present a costly challenge. These parallels explain the rise in addiction to certain video games and particularly richer virtual reality (e.g., Zoom) to which citizens can return whenever they like, for as long or as short a time as desired. For them, these realities stand as continuous identity reaffirmation and renewal, which can occur in no other way. To stop is to diminish the self. By contrast, the pandemic world will not continue forever to place a mental or physical burden on citizens. They therefore must treat their recent extraordinary experience as a series of happenings that transported their self profoundly but temporarily. They then can process it with awareness and abandon. Resumption of disbelief in the everyday world lies close to the heart of such successful retainment of ordinary life. Citizens ought to analogise the pandemic reality as a temporary narrative world, and become (or be made) aware that their alternate reality can only contribute to transformation of the everyday world if they at least periodically withdraw and reflect. The government has many opportunities and resources to help their citizens in this endeavour.

[1] https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/COVID-19

[2] See https://japaneselaw.sydney.edu.au/2020/05/covid-19-in-asia-and-beyond-we-are-story-characters-living-in-a-new-story-world/ and forthcoming via https://sbi.sydney.edu.au/coronavirus.

[3] As Prof Francis Fukuyama notes in a recent interview, the effectiveness of  COVID-19 responses lie less in regime type, but rather whether citizens trust their leaders, and whether those leaders preside over a competent and effective state: https://supchina.com/2020/05/01/francis-fukuyama-interview-covid-19/

[4] https://mainichi.jp/english/articles/20200516/p2g/00m/0na/010000c

[5] See generally our colleague A/Prof Andrew Edgar, https://auspublaw.org/2020/03/law-making-in-a-crisis-commonwealth-and-nsw-coronavirus-regulations/

[6] Compare eg Dr Holger Hestermeyer, http://constitutionnet.org/news/coronavirus-lockdown-measures-german-constitutional-court; and https://www.lepoint.fr/societe/coronavirus-le-conseil-d-etat-limite-le-pouvoir-des-maires-17-04-2020-2371882_23.php.

[7] Nottage, Luke R., Translating Tanase: Challenging Paradigms of Japanese Law and Society (May 27, 2006). Victoria University of Wellington Law Review, Vol.39, No. 4, pp. 755-778, 2009; Sydney Law School Research Paper No. 07/17. Available at SSRN: https://ssrn.com/abstract=921932

[8] Eg in comparative studies by Nottage on consumer law (especially product liability law), corporate governance, and contract law (many freely available via https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=488525) – all areas moreover that are now hit by the COVID-19 pandemic.

[9] See eg Nottage, Luke R., Rebalancing Investment Treaties and Investor-State Arbitration: Two Approaches (June 14, 2016). Journal of World Investment and Trade, Vol. 17, No. 6, pp. 1015-1040, 2016; Sydney Law School Research Paper No. 16/54. Available at SSRN: https://ssrn.com/abstract=2795396

[10] Nottage, Luke R. and Ubilava, Ana, Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry (August 6, 2018). International Arbitration Law Review, Vol. 21, Issue 4, 2018; Sydney Law School Research Paper No. 18/46. Available at SSRN: https://ssrn.com/abstract=3227401 

[11] On the pros and cons of the eradication vs management strategies, from an interdisciplinary academic perspective, see generally the recent Go8 Report at https://go8.edu.au/research/roadmap-to-recovery

[12] Gary Hawke, https://www.eastasiaforum.org/2019/12/20/ardern-stardust-and-a-closer-than-you-would-think-2020-election/

[13] Unbridled Power (1st ed 1979), later edition reviewed here: http://www.nzlii.org/nz/journals/OtaLawRw/2005/10.html)

[14] https://www.stuff.co.nz/national/health/coronavirus/120572466/coronavirus-virus-laws-rushed-through-in-last-parliament-before-lockdown.

[15] https://thespinoff.co.nz/covid-19/28-04-2020/the-legal-basis-for-the-lockdown-may-not-be-as-solid-as-weve-been-led-to-believe/

[16] Nottage, Luke R., Reformist Conservatism and Failures of Imagination in Japanese Legal Education. Asia-Pacific Law & Policy Journal, Vol. 2, pp. 28-65, 2001. Available at SSRN: https://ssrn.com/abstract=837045

“COVID-19 in Asia and Beyond: We Are Story Characters Living in a New Story World”

Prof Luke Nottage (Sydney Law School) and A/Prof Tom van Laer (Sydney Business School)

Contemporary societies worldwide, and across the Asia-Pacific, have joined another realm. We struggle to make sense of the pandemic, ranging from the decelerated experience that continuously working from home promises, through to the immersion into COVID-19 impacts via news and social media. Engaging with this new narrative world, and eventually emerging from it, creates an ongoing challenge, which neither health professionals, nor politicians, nor policymakers address in much depth. They place emphasis on “flattening the curve,” for viral infections and economic slowdown, rather than on the complexities of transportation, transformation, and trans-mutilation as depicted in narratology[1] (how humanity uses stories to understand the world) and as experienced by ordinary citizens.

An overlooked aspect of COVID-19 is the wider story told by this intense, gripping, yet temporary pandemic.[2] This extraordinary experience creates a new narrative world, in which citizens feel as if they have escaped into a different, distinctly encapsulated frame. Narrative worlds are coherent, representative situation models woven from the distinct physical and temporal settings, props, characters, and performances that make experiences stand out.[3] Examining a narrative world can help reveal important currents and issues in socio-economic and legal ordering, offering new insights for policymakers and researchers.

1. Learning from Our New Storyline

To illustrate, this pandemic makes us feel as if we are stuck in disaster movie, but with some interesting differences from the usual Hollywood[4] (or Bollywood[5]) narratives. Thinking first of the herors, the main ones are those combatting the invidious coronavirus pandemic: the health professionals, especially the government medical officers, the front-line doctors and nurses, but (curiously) not really the psychologists or pharmacists.

The other unexpected heroes are those that usually do not feature: the supermarket staff on checkouts or (even more invisibly) stacking shelves, the truck drivers, or those making or delivering takeaways.

A few politicians are heroes too (or villains), but in a much reduced cast. Only few leaders of governments are prominent. Opposition leaders struggle to remain relevant. Not to mention the hundreds of other parliamentarians that usually vie for and get some media attention.

Everyone else is like an extra: paid a little to do not very much over long periods! These multitudes merely provide a the backdrop for the heroes to develop the movie’s storyline.

Largely missing are other groups that sometimes feature in disaster movies, or indeed disaster management scenarios in real life. Belatedly, in Act II, the economists are surfacing more, as the health challenges from Act I become better known and outcomes are generally improving. Economists, including central bankers[6] who usually take a low profile,[7] need to work out how to maintain or revive economies amidst ongoing uncertainties over a cure or vaccine.

The jurists remain largely missing in action, despite the introduction of “executive rule” (with many parliaments suspended)[8] and limited access to courts (as traditional bastions for civil liberties). But data privacy lawyers have sometimes made an appearance, eg on safeguards for the new COVIDSafe tracing App being encouraged by the Australian government for contact tracing).[9]

We also rather rarely hear of the sociologists, philosophers, theologians and even political scientists, who usually help us to make broader sense of the societies we live in. Nor do we hear much from academics more generally, unless working with those developing vaccines or specialising in public health.[10] However, for example, some Australian universities are now trying to highlight their wider interdisciplinary expertise,[11] as the sector takes a large hit in revenue due to declines especially in foreign student enrolments.[12]

So the scenario we are living through and see unfolding around us offers an opportunity to test whether there is a reversal of “the death of expertise”. Tom Nichols reviewed that phenomenon in 2017, although focusing more on postmodern Western rather than Asian societies.[13] Seeing ourselves in a disaster movie, in this way, can also provide insights into which groups of experts figure more prominently in public policy making generally.

2.       Other Insights from and for Japan and Other Asian Societies

The COVID-19 pandemic also highlights the resilience or perhaps revival of community norms in contemporary societies, even in highly developed Asia-Pacific economies. We often observe the importance of such norms from disaster management studies.[14]

In particular, in the short-term relief phase, examples of cooperative and altruistic behaviour tend to far outweigh selfishness or illegal behaviour (such as looting), contrary to the fears of Thucydides during the Athenian plague of 430BC.[15] This often extends to the post-disaster reconstruction phase, although politics and business as usual can then resurface, and effectiveness depends significantly on measures of “social capital” (such as participation in neighbourhood associations or religious groups) that vary across states and even localities. The impact of such community norms and institutions can also make a big difference in the disaster-planning phase.[16] Rural Taiwan’s effective cooperation against Covid-19[17] provides an interesting recent example for further comparative studies.

Japan’s response is also fascinating. It maintained economic activity longer than many Asian countries, although so for example did Taiwan and Korea.[18] Japan’s original policy stance has been criticised by some commentators, especially perhaps those sceptical about an earlier administration’s management of the 2011 earthquake/tsunami/radiation disasters. Yet Japan’s (still) low per capita death rate,[19] as well as another strong recent electoral result for the Abe Administration in 2019,[20] could explain this original policy stance. Nonetheless, as infections and testing grew,[21] the government declared a state of emergency last month — recently extended[22] — and “encouraged” dramatic reductions of sales and movements.[23]

Unusually, the central and local governments did not set criminal sanctions and use the police to enforce the restrictions. Instead they relied on appeals to narratives of civic virtue and consideration for others, albeit underpinned by the more instrumentalist power (and eventually practice) of “shaming” some miscreant businesses by “warning” the public if they remained open.[24]

An official reason for not mobilising the police was this would violate civil liberties enshrined in Japan’s (post-War, US-inspired) Constitution. Yet that, like other constitutions around the world, have provisions arguably justifying tougher interventions and sanctions.[25] One more likely explanation is that such measures, especially if introduced by a centre-right government, would remind its citizens (and neighbouring countries) of Japan’s militarist past – countering persistent efforts to substitute a narrative of “modern” freedoms and even pacifism.[26]

Another explanation is that Japanese leaders and policy-makers are aware that communitarian norms and respect for authority (and experts) remain comparatively strong. An analogy in Sweden, where leaders and policymakers still rely on community rather than legal norms despite a much higher death rate.[27]

Japan’s evolving experiment therefore raises another longstanding question: the importance of law in contemporary socio-economic ordering. Commentators have persuasively criticised an earlier “cultural relativist” theory that low civil litigation rates or less reliance on detailed contracts can simply be explained by “pre-modern” consensus-oriented or Confucian norms. Instead, they identified cost-benefit motivations for elites or individuals behind such outcomes.[28] Building on both storylines, the government itself has tried to promote a more active use of the legal system since the economic slowdown from the 1990s, including through wide-ranging justice system reforms.

Yet Japan seems to have reached a new equilibrium,[29] allowing an enhanced role for law while being cautious of its over-reach and conscious of the usefulness of maintaining strong communitarian values.[30] This balance, or tension, arguably becomes more visible in disaster situations in Japan, as also during the 2011 earthquake/tsunami/radiation disasters. It is therefore a topic worth comparing now across other Asian countries.

3. Emerging from the Pandemic into Another Narrative World

Over the course of the pandemic narrative world’s end, it will transcend its extraordinary nature. Sociologists and historians remind us that many tangible improvements come out of disasters.[31] Yet the narrative world that originates in the pandemic will also feed or “bleed” into the everyday world. Citizens can either transform this bleed into benefits that enrich their lives, or “trans-mutilate” it so that their lives remain immune. Reflecting on the discourses that surround the COVID-19 pandemic, we observe that many people “seek bleed out.” They want triggers, they want change, and they want transformation.

Deconstruction of the pandemic’s narrative world can have a pronounced transformative effect on these people. After the COVID-19 pandemic is over, many citizens will reveal how their behaviour, feelings, and thoughts in the narrative world are leaving traces with them afterwards, because of the world’s absence. By keeping the portal wedged open, traces of the narrative world’s presence will remain with these COVID-19-survivors and spread discernibly into the wider everyday world. Coping with these traces will offer purgative relief from these distressing emotions.

COVID-19 will change us. It will force us to face personal demons; to ask ourselves essential questions about the nature of humanity, of love, of choice. It will teach us new things about hope, and about loss. We will feel like we leave parts of ourselves stumbling around in that disaster movie. In return, we will bring back home a new piece of our humanity, of our innocence. We will thus become more aware of other worldviews through the extraordinary experience of the COVID-19 pandemic. Because of its absence, people will become more conscious of conspicuous consumption, of new relationships and sides to our identities.

However, challenged to negotiate the portal threshold between the narrative and the everyday world, not all citizens will gratefully receive these valuable aids to narratively sourced enculturation and instruction. Some COVID-19-survivors will not use narrative-provided meanings to further their worldviews and identity projects, and suit new consumption purposes and relationship statuses. Various survivors will fence off the narrative world of the pandemic, close the portal, and as such engage in strategies that trans-mutilate the narrative benefits passed onto them. The emotional distress they suffer will be cathartically powerless.

We wonder whether leaving our current novel narrative world will help consumers eventually. Will citizens suffer more after this episode, because they have experienced the benefits, yet are unable to escape their daily lives? We answer that citizens will suffer more soon after this narrative world has ended—but less eventually—if they analyse and take away the narrative benefits so as to transform the daily lives they can never escape.

[1] van Laer, Tom, Jennifer Edson Escalas, Stephan Ludwig, and Ellis A. van den Hende (2019), “What Happens in Vegas Stays on Tripadvisor? A Theory and Technique to Understand Narrativity in Consumer Reviews,” Journal of Consumer Research, 46 (2), 267–85. doi:https://doi.org/10.1093/jcr/ucy067

[2] “[F]or peripatetic (auto)didacticism is the homo narrans’s preferred mode of knowing” (italics in original): Joy, Annamma and John F. Sherry (2003), “Speaking of Art as Embodied Imagination: A Multisensory Approach to Understanding Aesthetic Experience,” Journal of Consumer Research, 30 (2), 259-82. doi:https://doi.org/10.1086/376802

[3] Gerrig, Richard J. (1993), Experiencing Narrative Worlds: On the Psychological Activities of Reading, New Haven, CT: Yale. doi:https://yalebooks.yale.edu/book/9780300054347/experiencing-narrative-worlds

[4] E.g. Contagion (2011), https://www.imdb.com/title/tt1598778/

[5] E.g. Bhopal Express (1999), https://www.imdb.com/title/tt0281656/

[6] https://www.eastasiaforum.org/2020/05/03/central-bankers-open-up-the-pandemic-box/

[7] Prof Annelise Riles, https://einaudi.cornell.edu/annelise-riles-secret-life-central-bankers

[8] E.g. my colleague A/Prof Andrew Edgar: https://auspublaw.org/2020/03/law-making-in-a-crisis-commonwealth-and-nsw-coronavirus-regulations/

[9] https://www.sydney.edu.au/news-opinion/news/2020/04/28/experts-examine-the-covid-19-tracing-app.html

[10] As somewhat of an exception, as a blog funded by Australian universities, see https://theconversation.com/au/topics/coronavirus-5830.

[11] https://go8.edu.au/research/roadmap-to-recovery

[12] https://www.abc.net.au/news/2019-08-21/australian-universities-too-dependent-on-chinese-students-report/11427272

[13] https://global.oup.com/academic/product/the-death-of-expertise-9780190469412?cc=au&lang=en&

[14] Nottage, Luke R. and Nasu, Hitoshi and Butt, Simon, Disaster Management: Socio-Legal and Asia-Pacific Perspectives (May 12, 2013). ASIA-PACIFIC DISASTER MANAGEMENT: COMPARATIVE AND SOCIO-LEGAL PERSPECTIVES, Simon Butt, Hitoshi Nasu and Luke Nottage, eds., Springer, pp. 1-58, 2014; Sydney Law School Research Paper No. 13/36. Available at SSRN: https://ssrn.com/abstract=2263953

[15] Frank Furedi, Coronavirus: Pandemics remind us of the power of community [[=“Adversity Begets Brave New World” in print version] The Australian (2-3 May 2020)

[16] Daniel Aldrich, https://press.uchicago.edu/ucp/books/book/chicago/B/bo13601684.html

[17] https://www.eastasiaforum.org/2020/04/30/rural-taiwans-community-cooperation-against-covid-19/

[18] https://www.economist.com/asia/2020/03/30/south-korea-keeps-covid-19-at-bay-without-a-total-lockdown

[19] https://asiatimes.com/2020/04/why-japan-gets-no-covid-19-respect/

[20] https://www.eastasiaforum.org/2019/07/25/abe-and-the-ldp-remain-dominant-after-japans-upper-house-elections/

[21] https://www.eastasiaforum.org/2020/04/28/japans-timid-covid-19-response/

[22] https://www.theguardian.com/world/2020/may/04/japan-to-extend-state-of-emergency-covid-19-amid-fears-second-wave-could-cripple-tokyo-hospitals

[23] https://www.japantimes.co.jp/news/2020/05/03/national/japan-partially-relax-interpersonal-contact/#.Xq9dzpolGUY

[24] https://time.com/5813619/japan-coronavirus-lockdown/

[25] https://www.japantimes.co.jp/opinion/2020/04/14/commentary/japan-commentary/coronavirus-japans-constitution/#.Xq9e_ZolGUY

[26] See generally Gustafsson et al (2019) https://www-tandfonline-com.ezproxy1.library.usyd.edu.au/doi/full/10.1080/09557571.2019.1623174

[27] https://www.theguardian.com/world/commentisfree/2020/apr/21/sweden-covid-19-policy-trust-citizens-state

[28] Abe and Nottage (2006 1st ed) http://www.austlii.edu.au/au/journals/ELECD/2006/184.html

[29] Wolff, Leon and Nottage, Luke R. and Anderson, Kent, Introduction: Who Rules Japan? (February 19, 2015). WHO RULES JAPAN? POPULAR PARTICIPATION IN THE JAPANESE LEGAL PROCESS, L. Wolff, L. Nottage and K. Anderson, eds, Edward Elgar, UK & USA, 2015; Sydney Law School Research Paper No. 15/10. Available at SSRN: https://ssrn.com/abstract=2567552

[30] Nottage, Luke R., Translating Tanase: Challenging Paradigms of Japanese Law and Society (May 27, 2006). Victoria University of Wellington Law Review, Vol.39, No. 4, pp. 755-778, 2009; Sydney Law School Research Paper No. 07/17. Available at SSRN: https://ssrn.com/abstract=921932

[31] Furedi 2020, op cit.

Endurance in Japanese Law

Written by Leon Wolff (QUT), with Giorgio Fabio Colombo (ANJeL-in-Europe Convenor, Nagoya U), Luke Nottage (USydney) and Heather Roberts (ANU)

The five articles collected in Issue 49 of the Journal of Japanese Law (for the northern hemisphere “Spring” of 2020) is a celebration of Europe’s enduring legal engagement with Japan. It reflects on the strength of legal links between Europe and Japan – some long-lasting; others fleeting; and yet others, emerging and evolving. It investigates the persistence of institutional practices and norms in Japanese legal system, large tracts of which have been adopted and adapted from 19th century continental European law as well as some recent legal innovations inspired by European examples. And it celebrates this work, whether by way of country reports or scholarly investigations, in this Journal – the world’s only enduring journal dedicated to Japanese law, published and edited in Europe. 

The reports and papers in this issue, and some more to come in the next issue, emanate from a Japanese law conference held on 23 September 2019 in the university town of Pavia in the Lombardy region of northern Italy.[1] Jointly organised by the Australian Network for Japanese Law (ANJeL) and Professor Giorgio Fabio Colombo, an Italian expert on the Japanese legal system based at Nagoya University, this event was intended to be an inaugural ANJeL-in-Europe event. The monastic-like University of Pavia, with a history tracing back to the 14th century, certainly made for an impressive site to inspire hopes for future research activities on Japanese law in Europe into the future. ANJeL, too, has strong connections with Europe. ANJeL co-director Luke Nottage, for example, has held research fellowships in Germany and Italy as well as having made explicit comparisons with European law in his corpus of scholarship on Japanese business and consumer law. Co-director Leon Wolff, as his surname might indicate, has German heritage. And, as a cross-institutional network established in 2002 for research, teaching and community engagement,[2] ANJeL has welcomed European experts to its advisory board, European researchers to its global conferences, and European law teachers to its signature offshore teaching program in Kyoto and Tokyo co-organised at Ritsumeikan University campuses each February. 

Less than six months after the Pavia event, ANJeL’s plans to base future collaborative research events on Japanese law in Europe have been put on ice. This is due to the sudden and shocking intervention the COVID-19 global pandemic. Since the initial reports of a novel coronavirus emerging from the live animal wet markets in Wuhan, China, COVID-19 has spread relentlessly across the world. According to the World Health Organisation, it had infiltrated 23 countries, infecting about 2 million people and causing 123,000 deaths.[3] Northern Italy, where the ANJel-in-Europe conference was held, became one the worst hit epicentres for the disease. The per-capita death rate remained the highest at the time of writing. This public health crisis has not only cost lives; it has shuttered swathes of the global economy, halted travel and reconfigured human interaction. Uncertainty is the new norm. It is unclear when the pandemic will be brought under a control; when a vaccine will become available; what restrictions will be imposed or relaxed; or how the world will change after the worst is over.

One thing, however, is certain. The pandemic will not endure. Although it will carry long-lasting effects, it will come to an end.

This observation stands in contrast to the overarching theme of this collection of papers: endurance. Specifically, the contributors have posed two linked research questions that engage this theme. The first is about the nature of the legal relationship between Japan and different parts of Europe. Why is there longstanding legal exchange between Japan and some parts of Europe, and only fleeting or emerging links in others? What historical and contemporary trends explain the unevenness in the Europe-Japan legal relationship? The second question concerns the functioning of key Japanese legal institutions, specifically, the judiciary, the legal profession and the criminal justice system. To what extent do the traditional functions of these legal institutions endure or persist despite the overlay of reform, the forces of (post-)modernisation and the pressure of interest groups? And how do we explain Japan’s tendency for institutional evolution rather than transformative change?

A report on “The State of Japanese Legal Studies in Europe” is the first comprehensive attempt to map Japanese legal studies across Europe. Reflecting on the trajectory of Japanese legal studies across the continent, the relative influence of Japanese Studies or Comparative Law on this trajectory, and the key research or teaching initiatives, the team of contributors covers Italy (Giorgio F. Colombo), France (Béatrice Jaluzot), Israel (Wered Ben-Sade), Scandinavia (Roger Greatrex), Spain (Francisco Barberán), Belgium and The Netherlands (Dimitri Vanoverbeke), Germany (Harald Baum and Moritz Bälz) and the United Kingdom (Luca Siliquini-Cinelli). Although the Japanese legal system is accessible to many European legal researchers because the Japanese system of codified laws draws heavily on a patchwork of European transplants, the motivations among Europeans to engage seriously with Japanese law vary widely. It might be inspired by the strong tradition of Japanese law scholars to research aspects of  European law and forge scholarly links (such as France); the growth of the Japanese economy since the 1970s and its significance to European economies (such as Germany and the Low Countries); the lure of Japanese society and culture (such as Italy and Spain); or the personal passions and scholarly initiatives of individual researchers (all countries, but consider especially Israel and Scandinavia). Japanese law scholarship – whether long-lasting (France), rich and voluminous (Germany), emerging (Italy), patchy (Scandinavia) or nascent (Israel) – finds diverse expression across Europe.

The next three articles explore different legal institutions in Japan: the legal profession (Masako Kamiya), the judiciary (Souichiro Kozuka) and the criminal justice system (David Johnson and Dimitri Vanoverbeke). In “The Style and Role of Judgments by Japanese Courts: How They are Written and Read”, Kozuka argues that case reporting decisions in Japan reflect a deliberate judicial policy of social conservatism. Specifically, which decisions get published in official reporter series, and how they should be written, reflects an institutional imperative to maintain public confidence in the court system through the cautious development of social policy through law; this contrasts with the broader goals of the common law system to ensure  incremental and coherent development of legal doctrine itself. Kozuka, however, rejects the view that the courts, especially the Supreme Court, are archly conservative. Rather, through an analysis of recent legal decisions on controversial issues, the Court and the Japanese judiciary as a whole ensure that the development of social policy through the law is carefully aligned with legislative history, accepted canons of statutory interpretation and criterion-referenced balancing tests.

In “Disciplinary Procedure: What it Tells Us about Practicing Attorneys in Japan”, Kamiya explores the disciplinary and dispute resolution procedures available to clients dissatisfied with the conduct of their case by their lawyers. Kamiya argues that, to be sure, lawyers take ethical and misconduct complaints seriously, and the Japanese Bar’s oversight powers can be successful in punishing and weeding out serious offenders of legal ethics. However, Kamiya makes the case that bar associations’ complaints-handling and dispute resolution procedures do little to enhance the autonomy and dignity of the legal profession. This is because ethical oversight is premised on the narrower, neo-liberal view of the legal profession as a market-based service-provider rather than a broader, public-oriented philosophy of lawyers defending the rule of law and constitutional freedoms.

In “The Limits of Change in Japanese Criminal Procedure”, Johnson and Vanoverbeke express reservations about the substantive impact citizen participation has had on the Japanese criminal justice system. Although Japanese citizens judge can make findings of fact and law in serious criminal cases as lay judges, can participate in criminal trials as victims of crime, and can review non-charge decisions by prosecutors, these reforms have not had the desired democratic impact that reformers envisaged. The authors argue that this is because the reforms are too narrowly targeted and, as a result, have largely cemented the status quo rather than transformed criminal justice.

In “Gender and Law Scholarship in the Law in Japan Field: A Comprehensive Bibliographic Study”, Levin and Hiraoka provide a valuable resource for researchers by indentifying around 150 works published between 1962 and 2019, divided into multiple sub-topics. Indeed, their listing suggests that gender is not only an “enduring” topic in the English-language literature on Japanese law, but also perhaps an “escalating” topic. The second edition of Japanese Business Law in Western Languages[4] had already identified around 40 publications in English (plus several in German and French) directly related to women or gender, including one as early as 1979,[5] in its Part III (Individual Works: Selective Bibliography 1970-2012). This is despite that Bibliography volume being focused on Japanese law related to business, and deliberately not attempting to be comprehensive. Most of those 40-odd publications were listed under Labor Law, which also included many publications on part-time work generally. Some such publications are also listed, noting their indirect impact on women, in this helpful more recent and wide-ranging bibliography by Levin and Hiraoka.

These articles make important contributions to our understanding of the endurance of institutional design and function in the Japanese legal system. In particular, they show that conservatism — whether it is in the cautious management of reported case law, the neo-liberal philosophy that defines legal ethics, or the narrowly-focused scope of criminal justice reforms — ensure gradual transformation[6] rather than radical change in important areas of the Japanese legal system.

[1] For the conference program, key participants and abstracts of presentations, see https://japaneselaw.sydney.edu.au/2019/04/japanese-law-compared-past-present-and-future/.

[2] For more information, including about (gratis) membership, see http://www.anjel.com.au/.

[3] See https://www.who.int/emergencies/diseases/novel-coronavirus-2019 (as of 15 April 2020).

[4]Harald Baum, Luke Nottage, Joel Rheuben and Markus Thier,Japanese Business Law in Western Languages: An Annotated Selective Bibliography (Hein, New York, second edition, 2013).

[5] Catherine Brown, “Japanese Approaches to Equal Rights for Women: The Legal Framework”, in: Law in Japan 12 (1979) 29-56. These publications were identified by searching under “equal opportunity” or “equal opportunity law” (8 separate publications), “equality” (11), “gender” (7), “women” (11) and “sexual harassment” (3)– without double-counting those with several of these terms in the titles.

[6] Compare also Luke Nottage, Leon Wolff and Kent Anderson (eds) Corporate Governance in the 21st Century: Japan’s Gradual Transformation (Elgar, 2008), especially chapter 2 (with a version also at https://ssrn.com/abstract=885367).

Submission to ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) upgrade consultation

[The following analysis provided to Australia’s Department of Foreign Affairs and Trade (Regional Trade Agreements Division) is relevant also for assessing Australia’s other trade and investment agreements, including with Japan bilaterally and through regional treaties such as the CPTPP and the recently concluded Regional Comprehensive Economic Partnership.]

Thank you for the opportunity to provide a submission to this important public consultation. I see some others are online,[1] and please upload there my present submission. Unfortunately other commitments probably preclude my attendance at the Thursday 2 April meetings in Sydney, but please let me know that day’s timetable as one or more of my co-researchers cited below may be willing and able to attend.

1. For the Services chapter, an important matter for Australia to review will be provisions around delivery of education. The coronavirus epidemic this year has highlighted that Australia’s FTAs (even more recent ones as with China) often do not include commitments allowing cross-border supply (ie service delivery over the internet), which may otherwise conflict with the national laws in our overseas partners.[2] As well as negotiating more expansive commitments, Australia should seek to draft in provisions around procedures for meeting and discussing urgently with counterparties about counter-measures during public health emergencies, as suggested by our A/Prof Jeanne Huang at the recent SCIL International Law in Review conference (in the context of China-Australia FTA upgrades). Such procedural provisions could also be extended to other chapters, including Trade in Goods.

2. For the Investment chapter, AANZFTA in 2009 originally lacked significant liberalisation commitments.[3] A work program for negotiations around expanding market access was envisaged but never completed.[4] This AANZFTA upgrade should at least lock in (through Schedules) liberalisation commitments made under other treaties concluded by Australia with counterpart ASEAN states (including the still undisclosed RCEP), but should go further to provide “value added”. If a Work Program is agreed for further negotiations, the revised AANZFTA should include commitments about when and how to meet, including provisions allowing for public consultation.

3. For the Investment chapter, on protections for foreign investors (including significantly now into ASEAN compared to a decade ago),[5] Australia presumably goes into upgrade negotiations using its most recent significant treaties as a starting point, especially the US-style template (building on NAFTA and epitomised by the CP/TPP) that has become the most common drafting approach around the Asia-Pacific region more generally.[6] However, views around ISDS-backed protections have changed in recent years, regionally (with the EU proposing several novel features, impacting also on Asia[7]) and in multilateral forums (UNCTAD, ICSID and especially UNCITRAL). Australia needs to become more consistently pro-active (arguably working with close partners especially New Zealand) in addressing persistent concerns about ISDS-backed protections in investment agreements, and this review of AANZFTA therefore should propose:

3.1 Minimising costs and delays through promoting amicable settlement,[8] by allowing a disputing party to require the other to attempt to mediate an investment dispute, before proceeding to arbitration. (This was provided under Australia’s recently signed bilateral FTA with Indonesia, although that was seemingly proposed by Indonesia and only allows the host state to compel mediation,[9] whereas an investor should be able to compel it too.).

3.2 Maximising transparency around ISDS (including disclosure around third-party funding) by explicitly adopting the UNCITRAL Transparency Rules (as under Australia’s recently revised BIT with Uruguay), and/or including similar provisions in the upgraded AANZFTA investment chapter text (as under the CP/TPP and/or Australia’s recent bilateral FTA with Peru).[10] Greater transparency benefits almost all stakeholders, not just (especially democratically accountable) host states but also foreign investors (able therefore to better expose protectionist or other vested interests in host states, to the detriment of other groups in those host states).[11] This is also consistent with Australia’s current efforts to ratify the UN Mauritius Transparency Convention; but that only retrofits greater ISDS transparency around pre-2014 treaties even if counterparties ratify that multilateral instrument too in future.

3.3 Further enhancing legitimacy around ISDS by expressly prohibiting “double-hatting” (arbitrators acting also as counsel), as under the CPTPP Code of Conduct,[12] as well as recent EU treaties (albeit for its now-preferred “investment court” alternative to traditional ISDS). Curiously Australia has not provided such an express prohibition in any other treaty, even its recent FTA with Peru (although both states are supposed to issue Guidance for ISDS arbitrators now that it is in force, so that prohibition might still be added there).

3.4 Australia should propose the “public welfare notice” procedure added uniquely in its FTA with China. This usefully suspends ISDS claims while the home state discusses with the host state potential defences relating to public welfare interests in the host state.[13]

3.5 However, as another aspect relating to public health risks such as coronavirus, the AANZFTA upgrade should consider express provisions expediting cross-border movement of senior management related to foreign investments, even in emerging emergency situations.

4. For the Competition chapter, this should be upgraded at least to CPTPP-style standards, but it should be boosted by more expansive Consumer Protection provisions especially now that ASEAN states have made significant (albeit sometimes patchy) progress in this field over last decade as part of building the ASEAN Economic Community.[14] I understand my Business School colleague Prof Gail Pearson has completed an ACCC-funded scoping project, so urge that to be publically disclosed so further informed comment and publically discussed. I also repeat my longstanding calls for Australia to seek provisions in FTAs that require or at least allow respective regulators to exchange consumer product safety accident-related information with their counterparts abroad. This could also be extended to sharing information about consumer credit related risks.[15]

5. The AANZFTA upgrade should also propose a chapter on Environmental Protection, as this is another public concern around FTAs. In particular this should incorporate this FTA’s dispute settlement procedures into other listed environmental protection treaties. The inspiration should be the CPTPP, but drafting improvements are helpfully suggested by our A/Prof Jeanne Huang.[16]

[1] https://www.dfat.gov.au/trade/agreements/in-force/aanzfta/Pages/general-review-of-the-asean-australia-new-zealand-fta.aspx

[2] Huang, Jeanne, https://erga-omnes.sydney.edu.au/2020/02/coronavirus-outbreak-and-teaching-chinese-students-online-legal-issues-that-australian-universities-should-know/

[3] Bath, Vivienne and Nottage, Luke R., The ASEAN Comprehensive Investment Agreement and ‘ASEAN Plus’ – The Australia-New Zealand Free Trade Area (AANZFTA) and the PRC-ASEAN Investment Agreement (September 26, 2013). INTERNATIONAL INVESTMENT LAW: A HANDBOOK, M. Bungenberg, J. Griebel, S.Hobe & A. Reinisch, eds., Nomos Verlagsgellschaft: Germany, 2015; Sydney Law School Research Paper No. 13/69. Available at SSRN: https://ssrn.com/abstract=2331714

[4] Bath, Vivienne and Nottage, Luke R., International Investment Agreements and Investor-State Arbitration in Asia (February 26, 2020). Sydney Law School Research Paper No. 20/08. Available at SSRN: https://ssrn.com/abstract=3544458 (footnotes omitted):

“The AANZFTA provides that the provisions on NT in the Investment Chapter will not come into effect until the Schedules of Reservations were finalized (Art 11.16) under a Work Program. Further negotiations on an MFN provision were also to take place under the Work Program (Art 11.16).  This has not been completed. Indeed, review of the investment chapter was paused in 2017 pending the finalisation of the RCEP, although the Economic Ministers of ASEAN, Australia and New Zealand noted in late 2019 the Upgrade Negotiations to amend the AANZFTA (for the second time) as a result of a review which will include the investment chapter.”

[5] See ASEAN Investment Report 2018 ch1, via https://asean.org/asean-investment-report-2018-published/

[6] Alschner, Wolfgang and Skougarevskiy, Dmitriy, The New Gold Standard? Empirically Situating the TPP in the Investment Treaty Universe (November 20, 2015). Journal of World Investment & Trade, Vol. 17, pp. 339-373 . Available at SSRN: https://ssrn.com/abstract=2823476 or http://dx.doi.org/10.2139/ssrn.2823476

[7] Kawharu, Amokura and Nottage, Luke R., Models for Investment Treaties in the Asian Region: An Underview (September 21, 2016). Arizona Journal of International and Comparative Law, Vol 34, No. 3, pp. 462-528, 2017 ; Sydney Law School Research Paper No. 16/87. Available at SSRN: https://ssrn.com/abstract=2845088

[8] See generally, forthcoming in JWIT: Ubilava, Ana, Amicable Settlements in Investor-State Disputes: Empirical Analysis of Patterns and Perceived Problems (March 13, 2019). Sydney Law School Research Paper No. 19/17. Available at SSRN: https://ssrn.com/abstract=3352181

[9] 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). Sydney Law School Research Paper No. 20/12. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3548358

[10] Ibid.

[11] Burch, Micah and Nottage, Luke R. and Williams, Brett G., Appropriate Treaty-Based Dispute Resolution for Asia-Pacific Commerce in the 21st Century (May 24, 2012). University of New South Wales Law Journal, Vol. 35, No. 3, pp. 1013-1040; Sydney Law School Research Paper No. 12/37. Available at SSRN: https://ssrn.com/abstract=2065636

[12] See Nottage, Luke R. and Ubilava, Ana, Costs, Outcomes and Transparency in ISDS Arbitrations: Evidence for an Investment Treaty Parliamentary Inquiry (August 6, 2018). International Arbitration Law Review, Vol. 21, Issue 4, 2018; Sydney Law School Research Paper No. 18/46. Available at SSRN: https://ssrn.com/abstract=3227401;

and Concept Paper on Arbitrator Independence via https://www.cids.ch/academic-forum-concept-papers

[13] For more details see Nottage, Luke R., Investment Treaty Arbitration Policy in Australia, New Zealand – and Korea? (August 13, 2015). Journal of Arbitration Studies, Vol. 25, No. 3, pp. 185-226, 2015; Sydney Law School Research Paper No. 15/66. Available at SSRN: https://ssrn.com/abstract=2643926

[14] Nottage, Luke R. and Malbon, Justin E. and Paterson, Jeannie Marie and Beaton Wells, Caron Y., ASEAN Consumer Law Harmonisation and Cooperation: Backdrop and Overarching Perspectives (June 3, 2019). Luke Nottage, Justin Malbon, Jeannie Marie Paterson and Caron Beaton-Wells, “ASEAN Consumer Law Harmonisation and Cooperation: Achievements and Challenges”, Cambridge University Press (2019); Sydney Law School Research Paper No. #19/32. Available at SSRN: https://ssrn.com/abstract=3398046

[15] Nottage, Luke R., Free Trade Agreement and Investment Treaty Innovations to Promote More Sustainable Financial Markets for Consumers (July 2, 2014). THE GLOBAL FINANCIAL CRISIS AND THE NEED FOR CONSUMER REGULATION: NEW DEVELOPMENTS ON INTERNATIONAL PROTECTION OF CONSUMER, C. Lima Marques, D. P. Fernandez Arroyo, I. Ramsay, G. Pearson, eds., Orquestra Editora, Brazil, 2012; Sydney Law School Research Paper No. 14/59. Available at SSRN: https://ssrn.com/abstract=2461568

[16] Huang, Jie Jeanne and Hu, Jiaxiang, Can Free Trade Agreements Enhance MARPOL 73/78 Compliance? (October 3, 2018). Tulane Maritime Law Journal, Vol. 43. 2018, pp. 59-91; Sydney Law School Research Paper No. 18/62. Available at SSRN: https://ssrn.com/abstract=3259734

“New Frontiers in International Arbitration for the Asia-Pacific Region”: Symposium 17 June 2020 (2-5pm) at/with Taylor’s University, Kuala Lumpur

Supported also by the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), Sydney Southeast Asia Centre (SSEAC) & Asian International Arbitration Centre (AIAC)

This half-day symposium brings together academic researchers and practitioners in international dispute resolution, exploring new developments regionally impacting on international commercial arbitration as well as investor-state dispute settlement (ISDS). These extend to initiatives around cross-border mediation, international commercial courts, and China’s Belt and Road project. The symposium builds on a research project over 2019 between the University of Sydney and Hong Kong University (focusing on Australia, HK, China, Japan and Singapore)[1], to examine more closely developments also in Malaysia and other parts of Asia.

Please register your attendance for this complimentary symposium via email to avijayalakshmi.venugopal@taylors.edu.my.

Time Session
2-2.10 pm Welcome Message Mr. Harmahinder Singh Head, Taylor’s Law School, Taylor’s University
2.15-2.40 pm Mediating Japan-Korea Trade and Investment Tensions[2] Professor Luke Nottage Sydney Law School, University of Sydney
2.45-3.10 pm Recent Developments of Institutional Arbitration in China: Specialization, Digitalization and Internationalization[3] Associate Professor Jie Huang Sydney Law School, University of Sydney
3.15-3.40 pm Malaysia’s Involvement in International Business Dispute Resolution[4] Dr. A. Vijayalakshmi Venugopal Taylor’s Law School, Taylor’s University
3.45-4 pm Closing Remarks Professor Luke Nottage & Dr. A. Vijayalakshmi Venugopal
4-4.40 pm Refreshments  

Speakers’ Profiles

Dr Luke Nottage (BCA, LLB, PhD VUW, LLM Kyoto) specialises in comparative and transnational business law (especially arbitration, investment law, contract and consumer law), with a particular interest in Japan and the Asia-Pacific. He is Professor of Comparative and Transnational Business Law at Sydney Law School, founding Co-Director of the Australian Network for Japanese Law (ANJeL), and Associate Director of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). He has held fellowships at other leading institutions in Japan and Australia as well as Germany, Italy, Canada and Thailand.

Luke’s 16 books include International Arbitration in Australia (2010, eds), Foreign Investment and Dispute Resolution in Asia (2011, eds), International Investment Treaties and Arbitration Across Asia (2018, eds), Contract Law in Japan (2019) and ASEAN Consumer Law Harmonisation and Cooperation (2019, both co-authored).

He has or had executive roles in the Australia-Japan Society (NSW), the Law Council of Australia’s International Law Section, the Australian Centre for International Commercial Arbitration, and the Asia-Pacific Forum for International Arbitration. Luke is also a Rules committee member of ACICA and listed on the Panel of Arbitrators for the AIAC (formerly KLRCA), BAC, JCAA, KCAB, NZIAC, SCIA and TAI. Luke has consulted for law firms world-wide, the EC, the OECD, the UNDP, ASEAN and the Japanese government; and has contributed to arbitration and consumer law reform and investment treaty-making in Australia. He qualified as a lawyer in New Zealand in 1994 and in New South Wales in 2001.

Dr Jie (Jeanne) Huang, SJD (law) Duke University School of Law in the US; Master of International Law and LLB, Shanghai University of International Business and Economics in China. Dr. Jeanne Huang is an associate professor at the University of Sydney Law School in Australia. She is widely known for her research on legal issues in digital trade and e-commerce, international investment and Chinese law. She has published four books and authored many articles in leading peer-reviewed law journals, such as Journal of International Economic Law and Journal of Private International Law. Twelve of her articles are indexed by SSCI. She has received funding from University of Sydney, University of New South Wales, China National Social Science Fund general project (equivalent to Australian ARC), China Ministry of Education, the China Law Society, Shanghai Philosophy and Social Science Fund, and Shanghai Government Development and Research Centre Fund on research topics related to international trade and investment regulations.

Dr. A. Vijayalakshmi Venugopal (LLB, MEd(Psy), LLM, PhD) is a Senior Lecturer in Taylor’s Law School, teaching various modules in the LLB and LLM degrees, including Alternative Dispute Resolution, Law of the World Trade Organization and International Sale of Goods. She has supervised a number of LLM theses on international arbitration. She is the author of 3 books and various articles on law. She has also presented conference papers on and been a trainer in education. She qualified as an advocate and solicitor in Malaysia.

[1] https://japaneselaw.sydney.edu.au/2019/02/

[2] Claxton, James M. and Nottage, Luke R. and Williams, Brett G., Mediating Japan-Korea Trade and Investment Tensions (December 3, 2019). Sydney Law School Research Paper No. 19/73. Available at SSRN: https://ssrn.com/abstract=3497299.

[3] Jie (Jeanne) Huang (2019), Recent Developments of Institutional Arbitration in China: Specialization, Digitalization and Internationalization, in Julien Chaisse & Jiaxiang Hu (Eds), International Economic Law and the Challenges of the Free Zones, (pp. 251-275), Wolters Kluwer.

[4] Venugopal, A. V., Malaysia’s Involvement in International Business Dispute Resolution, in Ali, S., Jetin, B.; Nottage, L.; and Teramura, N., New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution, Wolters Kluwer.

“Ghosn is gone”: criminal justice and corporate governance in Japan

[Updated 10 July 2020] Japan welcomed in the New Year of the Mouse (or Rat) with intense media coverage nationally and internationally about former Nissan CEO then President, Carlos Ghosn, who escaped bail on 29 December 2019 to return to his native Lebanon. The ongoing saga (with background eg here) mainly highlights pros and cons of Japan’s evolving criminal justice system, where almost all prosecutions are successful. That 99% conviction rate can be seen positively: prosecutors carefully try to second-guess judges, without subjecting the accused to unnecessary trials. This enhances rule of law values such as predictability and equal treatment, even for alleged white-collar crimes (often not successfully pursued, as we have seen world-wide after the Global Financial Crisis, even in the US). [There is a similarly high conviction rate for US federal prosecutions generally, since so few are contested at trial, as pointed out by Bruce Aronson.] But there remain concerns that Japanese prosecutors unfairly force confessions and the criminal justice system undermines other rule of law values. [These various aspects were discussed along with background shifts in the global auto industry in a 30-minute ABC National Radio program, “Ghosn has flown – the rise and fall of an auto industry mogul”, which aired on 9 February 2020 and is available as a podcast here (with extracts from my interview appearing around mid-way.)] The Ghosn affair also uncovers Japan’s relative paucity of extradition treaties, as I mentioned in a 3 January 2020 Bloomberg news article reproduced below (reprinted in the Japan Times, which continues extensive coverage).

The Ghosn case also highlights the latest (December 2019) amendments to Japan’s Companies Act, “designed to increase transparency in executive compensation at major companies in the wake of the ouster of Nissan Chairman Carlos Ghosn, who was arrested last year for allegedly understating his compensation. He has continued to deny allegations of financial misconduct. Boards of directors will now be required to disclose outlines of executive pay, such as whether it is offered in cash or shares and in a fixed or variable amount.” The revised Act also now requires companies to have at least one outside director, rather than on a “comply or explain why not” basis as under the 2014 amendments. But the revision won’t take effect until June 2021. In addition, almost all listed companies already had at least one outside director, and indeed a growing majority had at least two outside directors satisfying stricter “independence” requirements, under the 2015 Corporate Governance Code (slighted revised in 2018) that continues to apply on the comply or explain basis.

Further, as a Japan Times editorial had concluded in February 2019 (“Empower outside directors“) regarding the Companies Act amendments then being proposed by the Ministry of Justice’s law reform council:

“After the arrest of Ghosn on that and other charges that raised questions about corporate governance at the major automaker, Nissan is reportedly considering increasing the number of outside directors from the current three. However, the charges against Ghosn, who is alleged to have wielded unquestioned power within the automaker, including in deciding executive pay effectively at his own discretion, also put into question whether the outside directors have been able to play substantial roles in overseeing the firm’s management.

The arrest and indictment last year of a former outside director of an electric parts manufacturer listed on the TSE’s first section, on charges of insider trading of the firm’s shares based on confidential information he obtained thanks to his position — also highlighted the question of the quality of outside directors that companies are bringing in.

Many companies are believed to look for candidates among top executives of other firms, academics and lawmakers. The companies often reportedly face difficulties finding the right person with sufficient knowledge and expertise on corporate management. In fact, many well-qualified people are reportedly serving as outside directors at several companies simultaneously. Another question is whether the companies that tap them have established an in-house environment in which these directors can fulfil the roles expected of them, such as by providing them with sufficient access to the firm’s relevant information or by enabling them to be regularly heard by the company’s top management.

Merely making it mandatory under the law for companies to have outside directors on their board won’t be enough. A legal step like this needs to be accompanied by measures that ensure they can actually contribute to improving their company’s governance.”

Ghosn’s Escape From Japan Ramps Up Pressure on Foreign Suspects

By  Lisa Du ,  Bruce Einhorn , and  Isabel Reynolds 3 January 2020, 5:55 pm AEDT

  • Foreigners expected to face tougher time posting bail
  • Ex-Nissan boss paid record bail bill, then fled the country

The Tokyo district court let Carlos Ghosn post bail last March, overruling prosecutors’ objections that he was a flight risk. After all, how could one of the most recognizable foreigners in the country flee while under round-the-clock surveillance?

As the world learned this week, the court was wrong and Ghosn’s stunning escape is bound to bode ill for future foreign suspects seeking to post bail. Yet longer term, the fallout could carry broader implications for the pace of reforms to a justice system some regard as draconian.

“It’s ironic that Ghosn criticized the Japanese justice system as hostage justice, because the prosecutor’s judgment turned out to be right since he actually fled,” said Hiroki Sasakura, a professor at Keio University Law School in Tokyo. “His action might have a reverse effect on the criminal justice system, especially the Japanese court’s way of thinking, which was turning more liberal.”

Given the high-profile nature of the suspect, Japan’s legal system was already under heightened global scrutiny, with critics lambasting prosecutors for detaining the fallen automotive titan so long.

Even after gaining release from prison, the former head of Nissan Motor Co. and Renault SA had restricted access to family members and paid the highest bail fees in Japanese history: 1 billion yen ($9.2 million) for his first bail and then another 500 million yen after he was rearrested on new charges. And the court ordered his three passports — from Brazil, France and Lebanon — be confiscated.

(Ghosn’s Legal Odyssey and What It Says About Japan: QuickTake)

Japan is unusual for its lengthy pre-trial detentions, strict bail conditions and long delays before suspects are given their day in court, said Luke Nottage, a professor at the University of Sydney Law School and co-director of the Australian Network for Japanese Law.

More Lenience

In response to criticism from defense attorneys and after the introduction of a new jury trial system and pretrial procedures, Japanese courts in recent years were more lenient in allowing bail, Keio’s Sasakura said. A backlash has already begun, with Ichiro Aisawa, a lawmaker from Japan’s ruling Liberal Democratic Party, denouncing the decision to give Ghosn bail in the first place.

“This should have never happened,” Aisawa wrote on Twitter. “We need to establish measures so we don’t screw up ever again.”

In Japan, authorities are allowed to detain suspects for two 10-day periods for questioning before a decision is made on whether to indict. Sometimes suspects are rearrested on new charges as a way to detain them longer.

Prosecutors rarely pursue cases they think they can’t win, and Japan is known for its near-perfect conviction rate.

Those indicted in Japan may apply for bail as they await trial. About 34% of those detained received bail in 2018, according to the Japan Bail Support Association. That’s up from 15% a decade ago.

‘Rigged’ System?

Such statistics reinforce the criticism by Ghosn, who issued a statement on Dec. 31 from Lebanon saying he had fled there to escape what he called Japan’s “rigged” justice system. This may lead to further calls for a more balanced system, according to Yuichi Kaido, a lawyer who has campaigned for changes to Japan’s criminal justice system.

“I think the international community will look at Japan’s criminal justice system with great severity,” Kaido said. “There will be harsh questions raised there about Japan’s criminal justice system, including the death penalty and what is called hostage justice.”

However, the Ghosn case isn’t likely to have a lasting impact on Japan’s attractiveness as an investment destination, according to Deborah Elms, executive director of Asian Trade Centre, a Singapore-based advisory firm. Foreign companies considering investments in Japan won’t be deterred by the situation surrounding Ghosn, she added, with Asian companies accustomed to unpredictable rules.

“This is just another example of an uncertain legal system that can be worked to your advantage or could come back and bite you,” she said.

Japan should resist internal calls to retaliate by making it even more difficult for suspects to win release from prison ahead of trial, said Nobuo Gohara, a former prosecutor who has been critical of the handling of Ghosn’s case.

“It’s very unfortunate that the efforts of his attorneys to obtain bail and the court’s judgment against the prosecutors to allow it was betrayed,” Gohara wrote in a blog post. “But we shouldn’t simplify the issue to that the court shouldn’t have allowed bail.”

There’s a change that may win widespread support after Ghosn’s escape: a push for more extradition treaties. Japan has only two bilateral agreements, with the U.S. and South Korea. That compares with more than 30 for South Korea and more than 100 for the U.S.

“It’s just one of those areas where they haven’t given much thought and diplomatic attention,” said Nottage, the University of Sydney Law School professor. “The Japanese government might be thinking about maybe we need more extradition treaties.”

— With assistance by Kana Nishizawa