Arbitration

The Process and Enforcement

Our office mediates cross border arbitration and foresees the enforcement of these decisions as a major role of our business.

The Japan Arbitration Tribunal facilitates disputes and cross border arbitrations.

1. The JCAA (Japan Commercial Arbitration Association) oversees cross border commerce disputes in accordance to an international standard.

Japan has long been a member of the New York Convention 1958, Recognition and Enforcement of Foreign Arbitral Awards, and moreover, the Arbitration Act, which was amended in August 2003, adopting the UNCITRAL Model Law on International Commercial Arbitration, thus it has become the international standard.
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The JCAA has made it possible to effectively solve disputes through arbitrations.
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The JCAA hears the proceedings under the Administrative and Procedural Rules for Arbitration UNCITRAL and moreover, in accordance to the Hague Convention 1961. As a member of The Hague Convention it is easy to authenticate private and official documents, thus selecting the JCAA is highly recommended.

2. Speed

Arbitration is preferred to litigation due to avoiding lengthy trial litigations, however each country is different. It is not necessarily always expedite in Japan. On the average it took JCAA 14 months to reach a decision. However, JCAA is working to resolve this problem, it has introduced an intensive hearing system, in which, if the claim is 20 million yen or less the decision must be made within three months.

Documents are organized quicker and the participants' statements are summarized in writing. As there is no process of an appeal at a higher court, the procedure is shortened.

3. Appointing an arbitrator

There are usually three arbitrators on one case. By agreement the arbitrators can be selected in advance, however if there is not an agreement each side selects one arbitrator and the two selected arbitrators select the third arbitrator.

Both parties may sometimes decide on having only one arbitrator.

The JCAA has a roster of arbitrators to choose from, and also someone from the general public may be chosen, even foreigners. When the arbitrator is a foreigner not only remuneration, but also the place of venue, travel expenses, accommodations, and interpreters fees must be considered.

Moreover, selecting an arbitrator with expertise in the conflict field is imperative. Someone arbitrating on intellectual property or construction should be knowledgeable in these industries respectively.

4. Enforcing the Decision

Arbitration decisions are much easier to enforce than of litigation, which is a major advantage in choosing arbitration over litigation. Members of the New York Convention adhere to cross border arbitration decisions. For example, China is not bound to Japanese court decisions, however; China is a member of The New York Convention, therefore must adhere to arbitrative decisions. Currently, 130 countries are members of The New York Convention, so that, enforcing a decision has become easier, and boasts an enforcement rate of 90%.

5. Cost

Administrative expenses for the arbitral tribunal and claim.
The JCAA: click here

Remuneration for the arbitrators: hourly rate is on average from 30,000 yen to 80,000 yen an hour. In addition to administrative costs, such as interpreting fees, documentation, etc., there are attorney fees and arbitrator selection fees.

6. Settlement

As the cost for arbitration can be quite high, some parties reach a settlement before going into arbitration. If the claim is withdrawn some fees are refunded, for example; within 30 days after the start of proceedings the administrative fees will be refunded. This encourages both parties to reach a speedy settlement, as quickly as within ten days. Requesting arbitration can also be used as a tactic to reach a settlement.

Kaneko Hirohito Law Office
Wako-Ginza 8-chome Bldg. 7F 8-10-4, Ginza, Chuo-ku Tokyo 104-0061, Japan [MAP]
Tel: 03-3574-8535 / Fax: 03-3574-7144 / Email: