10 ASIAN LEGAL BUSINESS – JAPAN E-MAGAZINE DECEMBER 2023 Japan has been on a quest to burnish its hitherto muted reputation as an international arbitration hub. The government has pulled out all the stops to boost the country’s attractiveness as the region’s premier seat for cross-border arbitrations and dispute resolutions, refusing to be sidelined by neighbouring arbitration powerhouses including Hong Kong and Singapore. One of the reasons is the increased willingness of Japanese parties to embrace international arbitration in a deviation from the traditional disputeadverse attitude. The number of Japanese parties in arbitrations administered by the Singapore International Arbitration Centre (SIAC) quadrupled between 2010 and 2020, with more than half the parties being claimants. “Perhaps due to parties’ preference for expertise of arbitrators, we have seen an increased number of arbitration cases, for example, in the areas of maritime and energy disputes,” says Kohei Murakawa, a senior partner at Atsumi & Sakai. “Industry specific arbitration and investment arbitration can be areas where international arbitration will increase in the medium to long term in Japan.” Fumiyasu Miyazaki, an attorney at Japan’s Ministry of Justice (MoJ), cites Japan’s “deeply integrated” economy into the global market as the reason for a robust international arbitration ecosystem. “As international business transactions increase, so does the potential for international disputes. Having a robust arbitration framework in Japan becomes crucial to resolving these disputes efficiently, and thus will be beneficial not only for Japanese entrepreneurs but also foreign investors,” he notes. In April, Japan completed its introduction of long-awaited amendments to the Arbitration Act. The earlier version, enacted 20 years ago, was based on the 1985 UNCITRAL Model Law on International Commercial Arbitration (Model Law), which itself underwent revisions in 2006. The updated act aims to harmonise international arbitration practice in Japan with modern global standards in the wake of “the growing demand from practitioners and business industries that seek a reliable arbitration hub in Asia,” notes Miyazaki. LEGISLATIVE BREAKTHROUGH The Bill for Partial Amendment of the Arbitration Act was submitted to the National Diet of Japan in February. After two months of deliberations, the Japanese parliament unanimously passed and promulgated the bill. One of the most prominent revisions covered the different categories of interim measures that an arbitral tribunal may order, and court procedures to enforce interim measures issued by an arbitral tribunal. “The Japanese court now has the authority to enforce tribunal-ordered interim or provisional measures. The amendments clearly set out what types of interim orders may be ordered by the tribunal, making slight adjustments to the wording from the Model Law in order to accommodate the Japanese legal system,” explain Yoshimi Ohara and Kara Quek, attorneys at Nagashima Ohno & Tsunematsu. Lawyers also highlight the venues for arbitration-related court proceedings, which under the amendments have been extended to cover the Tokyo and Osaka District Courts. “For example, a prevailing party of an arbitral proceeding may request the Tokyo or Osaka District Court to issue an execution order to enforce the arbitral award, if the case has certain proximity to Japan,” note Murakawa of Atsumi & Sakai. This revision is believed to help the two district courts concentrate expertise in hearing arbitration disputes in Japan. “This will allow parties seeking to arbitrate in Japan to receive support for their arbitration – whether in the form of recognition, enforcement, or otherwise – from a court which is more well-versed in arbitration and therefore more suited to meet their needs,” say Ohara and Quek of Nagashima Ohno & Tsunematsu. Other notable changes include oral arbitration agreements, which may now qualify under the Model Law as long as the oral agreement refers to a written arbitration agreement. The Japanese court now also has the discretion to waive the requirement for Japanese translations of some, or all, of the evidence, including arbitral awards being enforced. “These legislative reforms will further contribute to make Japan more arbitration-friendly jurisdiction, which guarantees impartial, just and expedited dispute resolutions and its enforcement,” says Miyazaki of Japan’s MoJ. CONSIDERATIONS REQUIRED Murakawa suggests that the government should consider providing further guidelines on third-party funding, which he says is most closely related to the financial interests of Japanese parties. ARBITRATION AMBITIONS 仲裁センターを目指す日本 Image: kuzmaphoto/ BY SARAH WONG