Arbitration is a non-court alternative method of resolving disputes. Disputing parties agree that one or several individuals (i.e. arbitrator(s)) can decide about the dispute after receiving evidence and hearing arguments. Compared to court litigation, arbitration can usually be completed more quickly and is less formal.
The Arbitration Act, governs arbitration seated in Japan, which incorporates most of the provisions of the UNCITRAL Model Law on International Commercial Arbitration 1985 (before the amendments adopted in 2006).
The Supreme Court Rules on Procedures of Arbitration Cases provides the procedural rules applicable to court cases concerning arbitration proceedings.
Japan Commercial Arbitration Association (JCAA) is the most commonly used in international arbitrations seated in Japan.
Other arbitration organisations include the Tokyo Maritime Arbitration Commission (TOMAC) of the Japan Shipping Exchange, specialising in maritime arbitration, and the International Arbitration Centre in Tokyo (IACT), specialising in IP arbitration.
The Act enables parties to exercise autonomy to decide the applicable procedural rules. In practice, where parties use an arbitration institution, the parties normally agree on the rules of the arbitration institution. The JCAA offers the following three sets of arbitration rules, each of which has its own features.
- UNCITRAL Arbitration Rules (2010) and Administrative Rules for UNICTRAL Arbitration (2021).
- Commercial Arbitration Rules (2021).
- Interactive Arbitration Rules (2021)
The Commercial Arbitration Rules (the ‘Rules’) apply as the default rules at the JCAA unless parties agree otherwise.
4. Expedited procedure
Under the Rules, if the amount in dispute is no more than 300 million yen, the expedited arbitration procedure is applicable. In particular,
- the number of arbitrators is one;
- proceedings are in principle conducted on a document-only basis; and
- the final award will be rendered within 3 months (if the amount in dispute is 50 million or less) and within 6 months (if the amount in dispute is more than 50 million) from the appointment of the arbitrator.
Parties can agree on the rules on disclosure. Even if there is no express agreement, an arbitral tribunal has the power to order a party to produce documents. It is a common practice for the IBA Rules on the Taking of Evidence in International Arbitration to be used as guidelines.
Japan is a civil law jurisdiction and has no broad document discovery proceedings in civil litigation. Therefore, the scope of the disclosure in arbitration may be narrower than the same in arbitration in a common law jurisdiction.
Legal fees are not fixed by the law. Contingency fees (i.e. where lawyers are entitled to a success fee calculated as a percentage of the damages recovered) are permitted.
The cost of arbitration will be appropriated between the parties in accordance with the parties’ agreement. In the absence of the parties’ agreement, each party will bear its own costs. If the parties agree, the tribunal can make an award or an independent ruling allocating the costs of the arbitration between the parties.