In Japan, in accordance with a new government policy on the promotion of international arbitration in 2024, efforts are being made to promote international arbitration, including domestic and international promotional activities and human resource development.
What is international arbitration?
International arbitration is a dispute resolution mechanism where the disputing parties appoint arbitrators and agree to be bound by the arbitrators’ decision. International arbitration has been increasingly used on a global scale for resolving disputes over cross-border commercial transactions.
International arbitration has many advantages, for example:
- ease of treaty-based enforcement of arbitration awards in foreign countries;
- preserving trade secrets through the confidentiality of proceedings;
- appointment of specialized and neutral arbitrators.
International mediation is also a remarkable ADR method to resolve international commercial disputes.
Initiatives to promote international arbitration in Japan
To promote international arbitration, in 2017, the Government of Japan established the Inter-Ministerial Committee which formulated a government policy in 2018. Based on this policy, the Ministry of Justice of Japan initiated a five-year exploratory project in 2019 that was focused on building awareness of ADR among businesses and developing human resources.
Also, relevant domestic laws were updated as follows:
- The Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers Act was amended to expand the scope of “international arbitration cases” that can be represented by registered foreign lawyers in May 2020.;
- The Arbitration Act was amended to harmonize with the latest UNCITRAL Model Law in April 2023 and came into force in April 2024.
- The Act for implementation of the United Nations Convention on International Settlement Agreements Resulting from Mediation was enacted in April 2023 and came into force in April 2024. Japan became the 12th State Party to the Convention.
In light of such development, a practical Task Force consisting of private-sector experts was set up in July 2023 to review initiatives taken in the past five years. The Task Force compiled a report including what is necessary for further promoting international arbitration and mediation.
Following this report, the Inter-Ministerial Committee adopted a new government policy – the 2024 policy – in May 2024.
To implement the 2024 policy, the MOJ is actively promoting international arbitration and mediation.