Arbitration-Related Developments in Japan in 2024

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THE AUTHOR:
Benedikt Kaneko, Associate at Gleiss Lutz

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In 2017, the Japanese government adopted a policy to promote Japan as a seat for international arbitral proceedings and the use of international arbitration in Japan. In May 2024, the Japanese government adopted a follow-up policy, reaffirming its commitment to continue promoting international arbitration in Japan. The arbitration-related developments of 2024 show Japan’s continued efforts to follow this policy, which led to several noteworthy developments in Japan’s arbitration landscape.

This article highlights the arbitration-related key developments in Japan in the year 2024, which include amendments to Japan’s Arbitration Act, new rules and institutional advancements of Japan’s arbitral institutions, as well as developments concerning mediation as a dispute resolution mechanism.

Amendments to Japan’s Arbitration Act

On 1 April 2024, amendments to Japan’s Arbitration Act entered into force. These amendments largely reflect the integration of the UNCITRAL Model Law 2006 into the Arbitration Act.

The amendments enable court-assisted enforcement of tribunal orders for interim measures to preserve rights and evidence (Articles 24 and 47-49). Noteworthy in this regard is Article 49, which grants courts the authority to impose penalties on a party if that party violates or is likely to violate an order for interim measures.

To concentrate arbitration-related expertise, the Tokyo and Osaka District Courts have jurisdiction over all arbitration-related matters, in addition to the district courts’ existing jurisdiction. Additionally, if the court finds it appropriate, the requirement to file Japanese translations in arbitration-related court proceedings may be waived (Article 46(2) and 47(2)).

Launch of the Japan Commercial Arbitration Association Advisory Board

The Japan Commercial Arbitration Association (JCAA) announced the establishment of the JCAA Advisory Board on 25 October 2024. The mission of this board is to enhance the JCAA’s contribution to the development of international arbitration and to ensure that Japan remains at the forefront of global dispute resolution. The JCAA Advisory Board is chaired by Hiroyuki Tezuka and includes leading arbitration practitioners not only from Japan but also from the Asia-Pacific region, the United States, and Europe.

This geographically diverse composition underscores the JCAA’s commitment to promoting best practices and potentially incorporating emerging global trends into its framework and approach to administering arbitral proceedings. Given that the JCAA’s Commercial Arbitration Rules were last amended in 2021, including the settlement-centered JCAA Interactive Arbitration Rules, it would not be surprising to see incremental changes to the JCAA arbitration rules in 2025 or 2026, which will likely implement global trends and best practices.

Amendments to the Tokyo Maritime Arbitration Commission Arbitration Rules

Given Japan’s geographical profile as an island nation, it is unsurprising that it has a strong and robust shipping and maritime economy. The arbitral institution in Japan focusing on maritime arbitration is the Japan Shipping Exchange’s Tokyo Maritime Arbitration Commission (TOMAC). Effective 1 April 2024, TOMAC adopted amendments to its three sets of arbitration rules: the Ordinary Rules, Simplified Rules, and Small Claims Arbitration Procedure (SCAP) Rules.

The Ordinary Rules are TOMAC’s default arbitration rules. The amendments implement changes that reflect the Arbitration Act’s relaxed form requirements for arbitration agreements (see Article 13(6) Arbitration Act), the possibility for the arbitral tribunal to issue orders for interim measures in accordance with Article 24 Arbitration Act, as well as clarifying the possibility to conduct virtual hearings, the procedure for withdrawing an application for arbitration, and the procedure for correcting an arbitral award.

Amendments to the Simplified Rules (claims with a value of less than JPY 20,000,000) and SCAP Rules (claims with a value of less than JPY 5,000,000) are mostly clerical and do not meaningfully alter the existing procedure.

New Expedited Arbitration Rules of the International Arbitration Center in Tokyo

In addition to the 1998-established Japan Intellectual Property Arbitration Center, Japan is home to another arbitral institution specializing in IP disputes: the 2018-established International Arbitration Center in Tokyo (IACT). The IACT, after introducing its Arbitration Rules in 2018 and Mediation Rules in 2022, adopted the IACT Expedited Arbitration Rules on 12 February 2024.

The Expedited Arbitration Rules shall apply in any IACT case with a claim value of no more than USD 50 million or if both parties agree to their application (Article 1). This amount seems quite high, and at first sight, it might not be obvious how the IACT’s Expedited Arbitration Rules ensure more efficient and expedited proceedings. For example, they extend the time period for respondent’s response to a notice of arbitration from 21 days under the IACT Arbitration Rules to 30 days under the IACT Expedited Arbitration Rules.

A closer look reveals that the IACT Expedited Arbitration Rules eliminate the most unique feature of IACT arbitral proceedings: the substantive scrutiny of an arbitral award by a supervisory panel under Article 40 of the IACT Arbitration Rules. Under this unique feature, a panel of five neutral and qualified IACT arbitrators, established on a case-by-case basis, consisting mostly of former IP judges — generally one arbitrator each from the U.S., Europe, China, Japan, and Korea — is selected by the IACT Secretariat. The panel conducts a substantive scrutiny that can take more than one month, including submissions by each party and potentially even another hearing, before providing their recommendations to the arbitral tribunal. Eliminating this unique feature under the IACT Expedited Arbitration Rules will undoubtedly shorten the time needed to render awards in IACT arbitral proceedings.

Mediation Related Developments

Japan’s ratification legislation of the United Nations Convention on International Settlement Agreements Resulting from Mediation (2019) (“Singapore Convention on Mediation”) entered into force on 1 April 2024. Settlement agreements in Japan may now generally be enforced under the Singapore Convention on Mediation by applying for enforcement to the Tokyo or Osaka District Courts. This is applicable if the courts can exercise jurisdiction due to assets or property being located in Japan, the underlying dispute’s subject matter relating to Japan, or the respondent falling under the general jurisdiction However, it should be noted that Japan only applies the Singapore Convention on Mediation if the parties to the settlement agreement agree on its application, thereby potentially limiting its application.

At the same time, the JCAA adopted amendments to the JCAA Commercial Mediation Rules, effective as of 15 April 2024. The rules have implemented the Singapore Convention on Mediation since 2020 but now include further incremental amendments aimed at facilitating parties’ discussions on the application of the Singapore Convention on Mediation (Article 12.2 (4) (e)). Additionally, the amendments introduce strict confidentiality protocols in line with the UNCITRAL (United Nations Commission on International Trade Law) Model Law on International Commercial Mediation.

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ABOUT THE AUTHOR

Dr. Benedikt Yuji Kaneko is an associate at Gleiss Lutz. He advises clients on disputes and contentious proceedings, focusing on international commercial and investment arbitrations with a connection to Asia, particularly Japan, Korea, Singapore and China. He is admitted to the German Bar (Rechtsanwalt) and the New York Bar (Attorney at Law).

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*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.