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Japan to review corporate dispute arbitration system

  • September 17, 2020
  • , Jiji Press , 9:23 p.m.
  • English Press

Tokyo, Sept. 17 (Jiji Press)–Japanese Justice Minister Yoko Kamikawa asked an advisory panel Thursday to study a law revision to change part of procedures for arbitrating international disputes between businesses in order to make the system more convenient.


The Legislative Council, which advises the minister, will consider introducing a mechanism to prevent firms involved in disputes from disposing of assets contested unilaterally.


Japan is looking to encourage firms to use the arbitration scheme by expanding its usability through the law revision.


“The usefulness of arbitration as a method of resolving international disputes is rising, but the number of cases being handled by our country remains low, so there’s a need to promote the use of arbitrations,” Kamikawa said at the start of the day’s meeting of the panel.


According to the Justice Ministry, there are only some 10 arbitration cases involving Japanese firms annually in recent years. Arbitration is a dispute resolution method under the arbitration law that does not involve courts, in which both sides select arbiters to negotiate a settlement.


The method can be used in more than 160 countries that are parties to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention. Decisions from arbitration procedures have the same legal power as a court ruling.


The method differs from a civil trial in that there is no limitation to the languages that can be used, and that a decision can be reached in just one session. As the procedures are conducted in private, it is seen to have little impact on the reputations of the firms involved.


Under the envisaged mechanism, parties to arbitrations will be forced to make sure that assets at the center of their disputes are maintained. In a dispute over real estate, for example, the party holding the property will be banned from selling it off.


Japan’s arbitration act was established in 2003 based on the United Nations’ model arbitration law. The model law was revised in 2006, but the Japanese law was left unamended, leading to calls for revisions.

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