JAPAN AND HONG KONG AGREE ARBITRATION & MEDIATION COOPERATION

On 9 January 2019, Hong Kong’s Department of Justice and the Ministry of Justice of Japan signed a Memorandum of Cooperation (MoC) to “strengthen collaboration on international arbitration and mediation“. The MoC, a copy of which is available here, provides a general administrative framework for cooperation between Japan and Hong Kong in relation to international arbitration and mediation.

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JCAA Announces New Sets of Rules

Overview

The Japan Commercial Arbitration Association (JCAA) has issued an announcement that it is (i) amending its two current sets of arbitration rules and (ii) introducing a revolutionary set of rules designed to provide efficient and cheap civil-law style arbitration.

In its introduction to an initial call for public comments on the drafts, the JCAA made the frank admission that it: “has yet to play a significant role in the resolution of international disputes.”  The clear motivation for these new rules is to change this by offering a unique arbitration model that is attractive to a wide range of businesses.  Accordingly, the new sets of rules (the key features of which are explored below) seem to create a three tiered-system:

The new sets of rules will come into force on 1 January 2019.

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EU and Japan formally sign economic partnership agreement

On 17 July 2018, the EU-Japan Economic Partnership Agreement (EPA) was formally signed during the EU-Japan summit in Tokyo.  The EPA – the largest free trade agreement ever negotiated by the EU – has been years in the making and took significant time and effort to get to this stage. You can read more about the steps to date in our earlier post here.

The EPA aims to remove trade barriers between the EU and Japan, making it easier for firms to sell goods and services between the two economies. It will create the world’s largest open trade zone, covering nearly a third of global GDP, almost 40 percent of world trade and more than 600 million people.

The partnership also goes beyond trade, with wider social and political implications.  Given its scope of coverage, the EPA may encourage the development of global trade rules consistent with EU and Japanese standards.  The EPA also sends a powerful signal that two of the world’s largest economies explicitly reject trade protectionism. Continue reading

Japanese Supreme Court deals with issues relating to an arbitrator’s duty to disclose

Under Article 18(4) of the Japan Arbitration Act (“JAA“), arbitrators have an ongoing obligation to disclose circumstances which may give rise to justifiable doubts as to their impartiality or independence. In the latest judgement in a series of appeals relating to an application to set aside an arbitral award, the Japanese Supreme Court confirmed that this disclosure obligation will only be breached where an arbitrator is aware of such circumstances but fails to disclose them, or could have learned of such circumstances through a reasonable investigation but did not. Continue reading

EU – Japan Economic Partnership Agreement announced

On 6 July 2017 the EU and Japan announced an agreement in principle on their Economic Partnership Agreement (“EPA“).  The scale of this agreement is eye-popping: once in effect the EPA will cover nearly 40 percent of all goods exports, 10 percent of the Earth’s population, and about 30 percent of global GDP.  The breadth of goods covered by the EPA will be similarly substantial and includes agricultural and food products, the forestry sector, industrial products, the automotive sector, electronics, and services.  While some tariffs, such as those on wine, will disappear from the moment the EPA enters into force, other tariffs – including those on imports of Japanese automobiles to Europe and imports of European chocolates to Japan – will disappear over a number of years.  The net effect will be to remove tariffs from 99 per cent of all goods traded between the EU and Japan with one study suggesting consequent increases in EU exports to Japan of 34% and Japanese exports to the EU of 29%. Continue reading

Inside Arbitration: Issue #3 of the publication from Herbert Smith Freehills’ Global Arbitration Practice

We are delighted to share with you the latest issue of the publication from Herbert Smith Freehills' Global Arbitration Practice, Inside Arbitration.

In addition to sharing knowledge and insights about the markets and industries in which our clients operate, the publication offers personal perspectives of our international arbitration partners from across the globe.

In this issue:

  • Paula Hodges QC, Peter Leon, Craig Tevendale and Chris Parker share their insights into the development of commercial arbitration on the African continent and consider dispute resolution choices for parties negotiating Africa-related contracts.
  • We consider the development of arbitration in Rwanda and the Kigali International Arbitration Centre "in conversation" with KIAC's secretary general, Dr Fidèle Masengo.
  • Peter Godwin, Regional Head of Disputes Asia, reflects on his 16 years in Asia and the changes in attitudes towards dispute resolution amongst Japanese parties.
  • Dr Patricia Nacimiento, Thomas Weimann and Dr Mathias Wittinghofer give their view on whether Germany is on its way to becoming a true arbitration powerhouse.
  • Chris Parker, Elaine Wong, Gitta Satryani and Elizabeth Kantor provide a global perspective on the availability of security for costs and claim in international arbitration.
  • Dr Larry Shore discusses his path into public international law and the development of his interest in treaty disputes, as well as the differences in arbitration practice in the US and the UK and trends in US arbitration.
  • We highlight a number of key considerations for parties negotiating contracts with state and state-owned entities across the globe and provide comparative into state immunity in five key jurisdictions.

We are pleased to present our clients with an infographic providing a snapshot of our global arbitration practice in the two years 2014-2016.

The infographic details the successes of our growing practice and our huge geographical reach. The infographic is available at this link and at page 25 of Inside Arbitration.

The full digital edition can be downloaded in PDF by clicking on this link.

We hope that you enjoy reading Issue #3 of Inside Arbitration. We would welcome your feedback.

JCAA introduces a new set of arbitration rules

The Japan Commercial Arbitration Association (JCAA) has introduced an amended version of its Commercial Arbitration Rules (the New Rules). The New Rules, which contain comprehensive amendments, came into force on 1 February 2014, following a consultation period. They will apply to all arbitrations initiated on or after that date. The changes are intended by the JCAA to update the rules in line with recent trends in the amendment of arbitration rules (such as the 2010 Amendments to the UNCITRAL Arbitration Rules). The changes largely achieve this aim, addressing current issues in international arbitration such as multi-party arbitration, emergency arbitrators and interim relief.

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Sovereignty over Islands and Consequences for Maritime Boundaries: The Dispute over Senkaku/Diaoyu/Diaoyutai Islands

The last few weeks have seen anti-Japanese protests in almost a dozen Chinese cities.  Demonstrators took to the streets apparently in response to the latest developments in a long-standing dispute between China and Japan concerning a group of islands in the East China Sea called Senkaku in Japan, Diaoyu in the People’s Republic of China (China) and Diaoyutai in the Republic of China (also known as Taiwan) that each of these countries claim as their own.  The archipelago, which consists of five uninhabited islands and three rocks situated approximately 120 nautical miles northeast of Taiwan and 240 nautical miles southwest of Okinawa, has been administered by Japan since its return from US trustee administration in 1972 despite claims to its territory by both Beijing and Taipei.

Tensions increased when on 15 August 2012, Chinese activists sailing from Hong Kong landed on one of the islands and raised flags of both China and Taiwan, before being detained and deported back to Hong Kong.  A few days later, about 150 Japanese activists sailed to the islands to support their country’s claim to the territory, sparking the weekend’s protests in China.

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Bilateral Investment Agreement signed between Iraq and Japan on 7th June 2012

A bilateral investment agreement or treaty (BIT) between Japan and Iraq was signed on 7th June 2012. This is the first BIT between Iraq and a major economy and is a significant and credible commitment by Iraq to the rights of foreign investors falling within the BIT’s protections.  The BIT will enter into force 30 days after diplomatic notes are exchanged between the two governments confirming necessary national legal steps have taken place.

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Tokyo District Court refuses to find that an arbitral award is contrary to the morality or public policy of Japan

On 26 February 2010, the Tokyo High Court upheld the Tokyo District Court’s Decision No. 3 of 28 July 2009, refusing to overturn an arbitral award pursuant to Japan’s Arbitration Law of 2003 (the “Arbitration Law“). Article 44 of the Arbitration Law sets out six grounds for setting aside an arbitral award, including: (a) that the party making the application was unable to present its case; and (b) that the award is contrary to public policy or morality in Japan.

The arbitral award under consideration had been rendered by a Tribunal sitting in Tokyo, applying the laws of Taiwan and administered under the International Arbitration Rules of the International Centre for Dispute Resolution (“ICDR Rules“) of the American Arbitration Association.

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