Originally from Practitioner's Handbook On International Arbitration And Mediation- 3rd Edition

This chapter summarizes the relevant conventions, treaties, and statutes that govern international arbitrations in Japan, the institutions in Japan available for administering an arbitration, and the practical considerations of arbitrating in Japan. The principal institution in Japan for administering international arbitrations is the Japan Commercial Arbitration Association (JCAA), which administers arbitrations under a modified version of the UNCITRAL rules or in accordance with its own Commercial Arbitration Rules. In March 2004, the latter set of Rules underwent a major overhaul in coordination with the amended Arbitration Law of Japan that became effective on March 1, 2004. Significant changes include broad recognition of foreign awards and more explicit confidentiality, impartiality, and anticorruption obligations for arbitrators. Since the Foreign Lawyers Law was amended in 1996, foreign lawyers practicing outside of Japan may represent a party in an international arbitration in Japan. Judicial involvement in international commercial arbitrations in Japan is generally limited to enforcing or challenging arbitration agreements, and appointing and removing arbitrators. The courts will not enforce provisional arbitral awards because they are not final, except in the case of an award for an injunction. When arbitrating in Japan, parties should consider that many of the costs involved, such as those regarding travel, translation, and investigation, may be allocated to each party in a manner that is completely at the discretion of the tribunal; arbitrators may initiate their own search for evidence; and arbitral hearings are often held in discrete and non-continuous sessions approximately once a month. Under the Arbitration Law of Japan, an award must be dated and signed by the arbitrators. Additional requirements are imposed by the JCAA Commercial Arbitration Rules.

Introduction

Japan is steadily gaining recognition as a venue for arbitrating international commercial disputes. It is party to a number of international conventions and treaties, including the New York Convention, and can claim a respectable record of enforcing foreign arbitral awards. Parties to arbitrations held in Japan also enjoy recourse to the courts in the event that the arbitration process becomes derailed. Parties will find that they may petition a court for assistance in a number of contexts, such as to compel the testimony of witnesses or the production of documents, to appoint arbitrators in case of a party’s default, and to order provisional remedies.

Although Japanese arbitration procedures came under criticism in the early 1990s,1 a number of recent developments augur brighter prospects for arbitrating international commercial disputes in Japan. The most notable development was a major revision to Japan’s arbitration law that took effect on March 1, 2004. The new law is based on the UNCITRAL model law and is therefore in line with current international standards. Another development was the 1996 amendment to the Special Measures Law Concerning the Handling of Legal Business by Foreign Lawyers, a law that had previously allowed only local counsel to represent parties in court or in an arbitral proceeding. The 1996 amendment changed the prior law to allow foreign lawyers to represent parties in international arbitrations.

The main institution in Japan for arbitrating international disputes is the Japan Commercial Arbitration Association (“JCAA”). Parties arbitrating at the JCAA may proceed under a modified version of the UNCITRAL Rules or under the JCAA’s Commercial Arbitration Rules, and the arbitration may be conducted in Japanese, English, or both. As in most international arbitrations, parties are faced with very few mandatory rules, the exception being that the arbitrators must (1) treat each party “with equality”; (2) give “[e]ach party … a full opportunity of presenting its case in the arbitral proceedings”;2 and (3) disclose any circumstance that would give rise to justifiable doubts about any arbitrator’s impartiality or independence.