NEW JAPAN INTERNATIONAL DISPUTE RESOLUTION CENTER OPEN FOR BUSINESS IN OSAKA

The newly established Japan International Dispute Resolution Center (JIDRC) opened its first hearing venue on 1 May 2018. Located within Japan's second largest metropolitan area, the JIDRC-Osaka is the product of cooperation between the public and private sectors and is reported to be the first facility in Japan to provide specialised international arbitration hearing services. It represents a welcome addition to the international dispute resolution landscape in Japan.

Internationalising arbitration and mediation in Japan

Earlier this year, we wrote about the new Japan International Mediation Center (JIMC) in Kyoto, which has been established by the Japan Association of Arbitrators (JAA) and Doshisha University, and will collaborate with the Singapore International Mediation Centre (SIMC).  Whereas the primary purpose of the JIMC is to facilitate private negotiation, conciliation and settlement processes for parties, the JIDRC-Osaka aims to provide a venue for parties to hold hearings in Japan on cross-border arbitrations under procedural and substantive rules of their choosing. The opening of the JIMC and the JIDRC-Osaka in quick succession demonstrates the focus of the Japanese government, in conjunction with private practitioners, on providing venues and methods for parties to resolve cross-border disputes in Japan with certainty and confidence.[1]

The JIDRC

The facilities at the JIDRC-Osaka are intended to be used for institutional or ad-hoc arbitrations and other ADR processes.  It is set up to host disputes between Japanese and foreign companies or purely between foreign companies, where those parties have chosen to seat their arbitration in Japan and/or wish to use Japan as a convenient or neutral location for their hearing.  It is also possible that the venue may be used as a facility to hear domestic arbitrations between Japanese companies.

We understand that the facilities in Osaka include three hearing rooms of varying sizes. Reports suggest that the JIDRC-Osaka has already received at least three bookings for hearings in ongoing international arbitrations, involving a mix of Japanese and international parties and under a range of institutional rules.

Established by a small group of Japan-based international arbitration experts, part of the JIDRC's overall mandate is to raise the profile of international arbitration in Japan. It is also part of the Japanese government's push to establish Japan as an internationally-recognised destination for cross-border dispute resolution.

The JIDRC plans to establish another hearing venue in Tokyo ahead of the 2020 Tokyo Olympics, with the intention of accommodating a range of different of disputes, including sports-related matters.

Comment

Historically, the number of international arbitrations seated in Japan been relatively low. This is despite the fact that Japan has a modern Arbitration Act (first enacted in 2004) that is largely consistent with the UNICITRAL Model Law on International Commercial Arbitration and a generally pro-arbitration judiciary. One factor that some commentators have attributed to the limited number of international arbitrations that are seated in Japan is the lack of suitable hearing facilities in the jurisdiction.  Whilst the JIDRC-Osaka should go some way to filling this gap, it still remains to be seen whether Japan will be successful in establishing itself as a leading hub for international arbitration and dispute resolution in Asia Pacific.  However, support from both the government and private practitioners appears to be at an all-time high and recent signs suggest that things are certainly moving in the right direction.

Herbert Smith Freehills' market-leading dispute resolution team in Tokyo has been awarded the 'International Arbitration Law Firm of the Year' at the Asia Legal Business Japan Law Awards for eight consecutive years (since the Award's inception) and advises Japanese and international clients on international arbitrations seated in jurisdictions all around the globe.

If you would like more information on the JIDRC, JIMC or ADR in Japan more generally, please feel free to get in touch with any of the contacts listed below, or your usual Herbert Smith Freehills contact.

[1] The official articulation of this policy can be found in the Cabinet Decision dated 9 June 2017, 'Basic policy on Economic and Fiscal Management and Reform' available in English here.