Japan - National Report - World Arbitration Reporter (WAR) - 2nd Edition

Originally from:  

World Arbitration Reporter - 2nd Edition - Looseleaf

World Arbitration Reporter - 2nd Edition - Electronic

JAPAN

Masafumi Kodama∗

I. INTRODUCTION: ARBITRATION IN JAPAN –
HISTORY AND INFRASTRUCTURE

A. History and Current Legislation on Arbitration

1. Historical evolution of law relating to arbitration

The first statute on arbitration in Japan was enacted in 1890 as part of the Code of Civil Procedure. This set of provisions, modelled after nineteenth-century German law, has just 20 articles and, from a modern viewpoint, several shortcomings. Some examples include that more grounds for setting aside an arbitral award were recognized; the default number of arbitrators was two and if they could not agree on an award, the arbitration agreement would be terminated; and the process for enforcing an arbitral award required a formal oral hearing.

Japan joined the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) in 1961, but the old arbitration law had not been significantly amended during the twentieth century — for more than 110 years. However, around 2001, the Japanese government initiated an overall reform of the law and judicial system. As part of this process, the arbitration law was also reformed by modelling it after the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”). This new Arbitration Act (the “Act”), enacted in 2003 and effective on March 1, 2004, totally modernized Japanese arbitration law.

2. Current law and possible reform projects

As stated above, the Act is modelled after the Model Law. The Act has 55 articles and 22 supplementary provisions and incorporates most of the provisions of the Model Law. The Act also contains some provisions not in the Model Law.

JAPAN

I. INTRODUCTION TO ARBITRATION IN JAPAN – HISTORY INFRASTRUCTURE

A. History and Current Legislation on Arbitration

1. Historical evolution of law relating to arbitration

2. Current law and possible reform projects

3. Confidentiality of public awards

a) Privacy of proceedings

b) Publication of awards

B. Arbitration Infrastructure and Practice in Japan

1. Major arbitration institutions

2. Number of cases and other statistics and comparison with litigation

II. CURRENT LAW AND PRACTICE

A. Arbitration Agreement

1. Types and validity of agreement

a) Clauses and submission agreements

b) Minimum essential content

c) Form requirements

d) Interpretation of arbitration clauses

2. Enforcing arbitration agreements

3. Effects on third parties

a) Partial successor

b) Guarantor

c) Director of legal entity

d) Insolvency trustee, debtor-in-possession

4. Termination and breach

B. Doctrine of Separability

C. Jurisdiction

 D. Arbitrability

1. Subjective arbitrability  

2. Objective arbitrability

a) “Civil Dispute”

b) “May be resolved by settlement”

i. Intellectual property

ii. Antitrust

iii. Domestic relations

iv. Divorce, separation

v. Exception by law

E. Arbitral Tribunal

1. Status and qualifications of arbitrators

a) Number of arbitrators

b) Relevant codes of ethics

2. Appointment of arbitrators

a) Methods of authorities of appointment

b) Payment agreements

c) Resignation and its consequences

3. Challenge and removal

4. Arbitrator liability and immunity

F. Conducting the Arbitration

1. Law governing procedure

a) Determination of law and rules governing procedure

b) Notion and role of seat of arbitration

c) Mandatory rules of procedure

i. Equal treatment

ii. Due process

2. Conduct of arbitration

a) Basic procedural principles

b) Party autonomy and arbitrators’ power to determine procedure

c) Style and characteristics of the oral hearing

d) Submissions and notifications; deadlines and default

e) Legal representation

3. Taking evidence

4. Interim measures of protection

a) Types of measures

b) Enforcement mechanisms

5. Interaction between national courts and arbitration tribunals

6. Multi-party, multi-action and multi-contract arbitration

7. Law and rules of law applicable to the merits

8. Costs of the arbitration

a) Arbitration costs

b) Security for costs

G. Arbitration Award

1. Types of awards 

2. Form requirements  

a) Essential content

b) Reasons

c) Time limits for making award

d) Notification to parties and registration

3. Decision making  

4. Settlement  

5. Correction, supplementation, and amendment

H. Challenge and Other Actions against the Award

1. Setting aside

a) Grounds

b) Time limits

c) Limiting judicial review of awards by contract

d) Effects of successful challenge

2. Appeal on the merits

III. RECOGNITION AND ENFORCEMENT OF AWARDS

A. Domestic Rules Governing Enforcement

1. Formal requirements for enforcement of awards

2. Enforcement procedure

B. Various International Regulatory Regimes

IV. APPENDICES AND RELEVANT INSTRUMENTS

 A. National Legislation (See CD-ROM)

B. Major Arbitration Institutions

C. Cases 

D. Bibliography

Masafumi Kodama was admitted to practice law in Japan in 1993 and in New York, U.S.A. in 1999. Mr. Kodama handles various international and domestic dispute resolution cases (including arbitration), insolvency cases and transaction cases. He has been a Partner of Kitahama Partners in Osaka, Japan since 2001, and has served as Secretary General of Japan Association of Arbitrators, Kansai Chapter since 2005. Between 2004 and 2008, Mr. Kodama also served as professor at the Law School of Kobe Gakuin University. He received his B.A. from University of Tokyo and his LL.M. from Cornell Law School.