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The Japan Commercial Arbitration Association

February 1996 JCA Newsletter Number 1

Foreign Lawyers Allowed to Represent
a Party in Japan

Report Submitted by Joint Study Group
on Representation in International Arbitration

The Study Group on Representation in International Arbitration, organized jointly in June 1994 by Japan's Ministry of Justice and the Japan Federation of Bar Associations (Nichibenren), submitted a conclusive report on October 25, 1995, to the Minister of Justice and the president of Nichibenren, requesting clarification through enactment of a law allowing foreign lawyers' representation in international arbitration conducted in Japan.
According to the report, the Study Group held 15 almost monthly meetings where six people, including experts, scholars and a lawyer, gave lectures. Two gaikokuho-jimu-bengoshi (foreign law solicitors) and two Japanese businessmen were also heard from. In November 1994, the Study Group conducted an on-the-spot survey by dispatching a couple of its members to Hong Kong, Singapore and Australia.
After repeated discussions, the Study Group concluded in the report that it should be specifically enacted that foreign lawyers may represent parties in international arbitration and that gaikokuho-jimu-bengoshi may represent parties in international arbitration without any limitation of the law of the country of primary qualification or designated law(s), and further concluded that it should make it a basis, when enacted, that the scope of international arbitration where foreign lawyers and gaikokuho-jimu-bengoshi may represent parties is to be determined as much as practicable by such objectively definite factors as the addresses and places of business of the parties, and so forth.





JCAA-DIS Cooperation Agreement Signed

On June 15, 1995, the JCAA signed a cooperation agreement with the German Institution of Arbitration (Deutsche Institution Fr Schiedsgerichtsbarkeit e.V. (DIS)).
The German-Japanese Trade Arbitration Agreement was entered into by the German Arbitration Commission (DAS) and JCAA on April 1, 1959, and was partially amended on February 25, 1982. After DAS and the German Institution of Arbitration were merged into DIS on January 1, 1992, JCAA and DIS talked about renewing the agreement.
The renewed agreement provides for mutual support in popularizing arbitration as a means of settling international commercial disputes, promoting wider use of arbitration, providing facilities or administrative services in arbitration proceedings, exchanging information and promoting mutual visits to the offices of JCAA and DIS. However, the agreement does not provide for any recommended arbitration clause.
In addition, a memorandum was signed between the two institutions. It confirms, among other things, that if the parties request arbitration under the arbitration clause recommended in the former German-Japanese Trade Arbitration Agreement, both institutions shall accept such a request.





Exchange Ceremony Held for the Russian-Japanese Commercial Arbitration Agreement and Memorandum

On October 19, 1995, an exchange ceremony for the Agreement and the Memorandum concluded between the JCAA and the Chamber of Commerce and Industry of the Russian Federation was held at the JCAA's office in Tokyo. The ceremony was attended by Mr. Ruzanov R.N., Trade Representative of the Russian Federation in Japan, and four other members from the Russian side, and by Mr. Yoshitoshi Munakata, president, and four other members from the JCAA side.
At the ceremony, Mr. Ruzanov and Mr. Y. Munakata delivered short addresses in which they both expressed the necessity for further cooperation in the settlement of disputes by parties engaged in transactions between the Russian Federation and Japan to continue the prosperity of both institutions. The attendants then toasted each other.
The agreement, which was signed on September 8, 1995, in Moscow by Mr. Stanislav A. Smirnov, president of the Chamber of Commerce and Industry of the Russian Federation, and subsequently countersigned in Tokyo on September 27, 1995, by Mr. Munataka, president of the JCAA, replaces the former agreement between the All-Union Chamber of Commerce of the USSR and the JCAA of 1956.
The arbitration clause recommended in the agreement is as follows:

"All disputes, controversies or differences which may arise between the parties, out of or in connection with the present contract, shall be finally settled by arbitration pursuant to the Japanese-Russian Commercial Arbitration Agreement. The award to be rendered shall be final and binding upon both parties."
In cases where the parties insert the above arbitration clause, the agreement further provides as follows:
"The terms of the agreement referred to in this arbitration are as follows: The place of arbitration shall be, unless otherwise agreed between the parties, the country in which the respondent has its place of business. In case such place is the Russian Federation, the arbitration shall be conducted at the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation in accordance with the rules thereof. In case such place is Japan, the arbitration shall be conducted at the Japan Commercial Arbitration Association in accordance with the Commercial Arbitration Rules thereof."
Apart from the arbitration clause, the agreement provides that the Chamber of Commerce and Industry of the Russian Federation and the JCAA undertake to cooperate in advancing international commercial arbitration through increased use of the facilities of each organization and exchange information, materials and publications.
On the other hand, in order that the respective arbitration institutions may accept requests for arbitration under the former agreement of 1956, the memorandum provides in Article 2 thereof that the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation is the successor to the Arbitration Court at the Chamber of Commerce and Industry of the USSR and has the right to settle by arbitration international commercial disputes to be brought before the Arbitration Court at the Chamber of Commerce and Industry of the USSR, taking into consideration Supplement I to the Law of the Russian Federation on International Commercial Arbitration Court of July 7, 1993, No. 5338-1.
Additionally, Article 3 of the memorandum stipulates that the jurisdiction of the respective arbitration institutions over a specific dispute will be determined in accordance with the rules of applicable arbitration law.


Quarterly Changes to Newsletter

We at the JCAA are pleased to introduce our first issue of JCA Newsletter, which replaces the Quarterly, the first edition of which was published in 1958.
In the Quarterly, we endeavored to provide you with information on international and domestic arbitration in Japan, as well as on our activities.Changing the name and format of the magazine reflects our zeal to give you even more useful and up-to-date information.
We hope this newsletter will serve as a bridge between you and us, deepening mutual understanding and friendship.


New Japanese-Polish Commercial Arbitration Agreement Signed

Taking the opportunity presented by the liquidation of the Polish Chamber of Foreign Trade, which was wholly succeeded by the Polish Chamber of Commerce, the JCAA and the Polish Chamber of Commerce recently renewed the Japanese-Polish Commercial Arbitration Agreement entered into on May 8, 1957.
The new Japanese-Polish Commercial Arbitration Agreement, effective from May 29, 1995, recommends to parties engaged in transactions between the two countries the following arbitration clause:
"All disputes, controversies or differences which may arise between the parties, out of or in connection with this contract, shall be finally settled by arbitration at the Japan Commercial Arbitration Association according to the Commercial Arbitration Rules of the said Association, in cases when the defendant is a Japanese party, or at the Court of Arbitration at the Polish Chamber of Commerce, Warsaw, according to the rules of the said court, in cases when the defendant is a Polish party. The arbitral award shall be final and binding and the parties undertake to execute it voluntarily and without any delay."
It further provides that both institutions undertake to cooperate in promoting international commercial arbitration.
In addition, the memorandum attached to the agreement provides the following matters:
"The JCAA and the Court of Arbitration at the Polish Chamber of Commerce confirm the Court of Arbitration at the Polish Chamber of Commerce represents and declares that the former Polish Chamber of Foreign Trade has been wholly succeeded by the Polish Chamber of Commerce, the agreement concluded in 1957 between the JCAA and the Polish Chamber of Foreign Trade has been replaced by the Japanese-Polish Commercial Arbitration Agreement and the request for arbitration submitted under the arbitration clause recommended in the agreement concluded in 1957 shall be accepted."





[Court Decision]

Law Applicable to Validity of Arbitral Clause and Its Scope

Tokyo Court of Appeal, May 30, 1994
Hanrei Jihou No. 1499, pp. 68-73 (1994)

On October 2, 1987, Appellant (Plaintiff), a Japanese company, entered into a contract with an American circus company (RINGLING), in which RINGLING was to run a certain circus performance for Appellant in Japan during two years from 1988 till 1989. For the first year, RINGLING performed its obligation to run the performance, but for the second year, attendance became much lower than in the first year, and the Appellant suffered a large amount of loss thereby. The Appellant alleged that the Appellee (Defendant), the representative and major shareholder of RINGLING, fraudulently induced the Appellant to enter into the contract by expressing its intention to perform the highest-level circus, and received from the Appellant an advance payment for remuneration although they had planned from the beginning to omit part of the second-year performance, and claimed damages arising from a tort committed by the Appellee.
The Appellee submitted to the court, inter alia, a plea of procedural hindrance under the arbitration agreement included in the contract, and alleged that the Appellant's claim should be dismissed. The contract had an arbitration clause reading:

In the event that any dispute involving the interpretation or application of the terms and conditions of this Agreement cannot be settled, such dispute, on written request of either party, shall be submitted to arbitration in accordance with the rules and procedures of the International Chamber of Commerce relating to the arbitration of commercial disputes. Any arbitration proceeding initiated by RINGLING shall take place in Tokyo and any arbitration proceeding initiated by JEC (Appellant) shall take place in New York.
The Tokyo District Court ruled in favor of the Appellee and dismissed the Appellant's claims. The Appellant appealed to the Tokyo Court of Appeal.
The Tokyo Court of Appeal affirmed the judgment rendered by the Tokyo District Court and reasoned as follows.
The judgement of the Court found that:

I. Law Applicable to Arbitration Agreement

1. Scope of Arbitration
In the arbitration agreement, such necessary matters to perform arbitral proceedings are provided for, one of which is the scope of the dispute to be referred to arbitration. The law applicable to those matters, which is the issue related to the legal effect of a contract in the domain of private autonomy, is determined by the intention of the parties (Article 7, Paragraph 1 of Hourei) although they are special matters of the dispute resolution method, and in the absence of that intention, in view of the nature of the agreement providing that certain legal proceedings are conducted in a specific place, it should be inferred that the parties intended to apply the law of the place of the arbitral proceedings. In this case, there are no circumstances where this inference is denied.
It should be understood that a filing party can be exempted from the exclusion effect of an arbitration agreement only if its request for arbitration filed in the country of the other party is not admitted to fall under the scope of the arbitration agreement, that is, as stated above about the law applicable to arbitration agreement, only if, in principle, any arbitration may not be requested for the relevant claim under the law of the other party's country.
2. Effect of Arbitration Agreement on Court Procedural Law
The arbitration agreement has a certain legal effect on the court procedural law (normally, the effect of excluding litigation), and such effect should be generally determined by lex fori. The effect of excluding litigation by arbitration agreement is nevertheless the reflective effect by providing for the settlement of a certain scope of the dispute without resort to litigation, and thus the scope of the dispute which the exclusion effect extends to should be determined, in principle, by the law applicable to arbitration agreement.

II. Personal and Subject Matter Jurisdictions of Arbitration Agreement

From the interpretation of the personal and subject matter jurisdictions of the arbitration agreement indicated by the United States Arbitration Act and the court cases based on this act, as well as from the fact that the order directing the parties to proceed to arbitration by the United States District Court of New York became final and so forth, it should be understood that the Appellant may ask for an arbitral award against the Appellee in the United States to recover the damages in relation to this claim.
1. United States Arbitration Act and United States Court Cases Based on This Act
The United States court cases found that, under the general principle that the effect of an arbitration agreement and the scope of arbitrable issues should be interpreted in the direction toward expanding such effect and scope in cases in which the arbitration agreement refers to arbitration of all disputes arising from a certain transaction, disputes on the issue of a personal act done as an employee of one of the parties in relation to the concerned transaction and disputes on fraud perpetrated by one of the parties in inducement to enter into a contract, are respectively included in the scope of the concerned arbitration agreement and should be settled by arbitration.
2. Finality of Order by United States Court to Direct Parties to Refer to Arbitration
In the court case where RINGLING and Appellee made a motion in New York City against Appellant and its representative director to compel arbitration and seek an injunction order, the following judgment was rendered on November 21, 1990 and became final. That is (1) Appellant and its representative director are ordered to request arbitration pursuant to the Rules of International Chamber of Commerce in accordance with the provision of the concerned arbitration agreement; (2) it is confirmed that the claims filed by the Appellant in the present action are covered by the provision of the concerned arbitration agreement; (3) Appellant and its representative director are ousted from proceeding to the action pending the arbitration required under the provision of the concerned arbitration agreement.

III. Exclusion of Application of United States Law by Virtue of Public Policy Rules

In Japan..., the interpretation saying that an arbitration agreement entered into by a legal entity necessarily applies to a dispute involving any of the representatives of such legal entity is not generally construed to be reasonable. In addition, ...there would be different views as to whether the agreement to refer to arbitration a dispute arising out of a contractual relationship also applies to a dispute on fraud in inducement to enter into a contract. However, we cannot say that, since there is a difference between the result of applying the American law and that of applying the Japanese law, the former result is forthwith contrary to public policy. Such result is construed to be excluded only in the case that it materially expands the scope of an arbitration agreement in light of the above interpretation of the Japanese law, exceeds the limit admitted in Japan, causes a result materially contrary to socially accepted ideas and is admitted to be contrary to public policy and good morals.
The substantial issue in this action is the same as the case of accusing default by RINGLING, ...RINGLING's substance is Appellee itself... . It may not be said at all that this case is greatly different in substance from the claims against RINGLING based on the contractual responsibility for its default and so forth, and that, if this arbitration agreement is applied in this case, it will cause a result substantially contrary to the Appellant's expectations about the scope of application of said agreement when it was entered into, and it may not be said to the extent of its application in this case that the interpretation made so far of the United States law is contrary to the public policy of Japan.





Seminar Held September 5 by JCAA

On September 5, 1995, JCAA held a seminar in Tokyo on the theme "Preparing for and Managing an International Commercial Arbitration: Practical Advice for Corporate In-House Counsel." The speakers were Mr. Stephen R. Bond, an ex-secretary general of ICC, International Court of Arbitration, and Mr. Christopher R. Seppala, chairman, FIDIC Task Group on Subcontract Documents, and Professor Kazutake Ohkuma was a moderator for the seminar. The speakers presented 15 guidelines or rules for avoiding an arbitration or, if this cannot be done, for preparing for and managing a successful and cost-effective arbitration. About 60 people attended the seminar, mostly businessmen from the international business and legal sections of Japanese corporations. There were several questions from attendees about the practice of international arbitration that were answered well by both of the speakers, and the seminar achieved excellent results.


Recommended Arbitration Clause

In drawing up contracts, parties are recommended to
include the following arbitration clause:

"All disputes, controversies or differences which may arise between the parties hereto, out of or in relation to or in connection with this Agreement shall be finally settled by arbitration in (for instance, Tokyo, Osaka, Kobe, Nagoya), Japan in accordance with the Commercial Arbitration Rules of The Japan Commercial Arbitration Association. The award rendered by the arbitrator(s) shall be final and binding upon the parties hereto."

If you need our Commercial Arbitration Rules,
please contact our arbitration department.



Recent Article on Arbitration in Malaysia

Its Current State and Issues for Discussion

by Professor Vincent Powell-Smith


This article is one of the articles published recently in JCAA's Research Institute on Commercial Arbitration, and it focuses on the current Malaysian law of commercial arbitration. This article describes the following issues:

  • Applicable agreements
    - Arbitrable matters
    - Qualifications of the arbitrator
    - Evidence and procedure in arbitration
    - The arbitrator's award
    - Judicial control of arbitration
  • Legal Representation
  • The Regional Center for Arbitration at Kuala Lumpur
  • Reform of Malaysian arbitration law

    In the last issue, Professor Powell-Smith observes that the arbitration law of Malaysia, which is modelled on outdated English legislation, is not well suited to the needs of the international commercial community and that Malaysia urgently needs a new Arbitration Act. In this regard, he made several comments, inter alia, that Malaysia should not follow the current trend in England which has rejected the Model Law on International Commercial Arbitration formulated by UNCITRAL.
    This published article is priced at ¥1,500 plus mailing charge. If you are interested in purchasing it, please contact the arbitration department (fax no. +81-3-3287-3064) of JCAA.





    Regulations for Arbitrator's Remuneration Published

    The JCAA has laid down the Regulations for Arbitrator's Remuneration, effective January 1, 1995, to set the amount of arbitrator's remuneration. The regulations were drawn up by one of the subcommittees of the JCAA's Study Group to Investigate Means for Enhancements of the International Commercial Arbitration System in Japan and were approved by the JCAA's Board of Directors on December 13, 1994.
    The main purpose of these regulations is to clarify how to determine the arbitrator's remuneration fixed by the association pursuant to Rule 56 of JCAA's Commercial Arbitration Rules.
    These regulations adopt the notion that the arbitrator's remuneration should be determined based on the amount equal to the Hourly Rate as provided for therein, multiplied by the time spent by the arbitrator for the arbitral proceedings.
    Additionally, as one of the features, they provide the upper limit of the arbitrator's remuneration according to the amount or economic value of a claim, so that the parties may foresee how much the maximum amount of the arbitrator's remuneration will be.
    The text of the regulations is shown as follows:

    Regulations for Arbitrator's Remuneration
    Effective January 1, 1995

    Article 1. Application of these Regulations
    These Regulations shall apply to the arbitrator's remuneration and related matters for arbitration under the Commercial Arbitration Rules of the Japan Commercial Arbitration Association (hereinafter called the "Association").

    Article 2. Arbitrator's Remuneration
    The basic amount of an arbitrator's remuneration shall be based on the amount equal to the Hourly Rate multiplied by the number of the Arbitration Hours. Taking into consideration the complexity of the case, the speed of examination proceedings, the circumstances of each arbitrator, the role of the third arbitrator and other circumstances, the Association shall determine, within the upper limit specified in the annexed table, the amount of remuneration for each arbitrator pursuant to these Regulations.

    Article 3. Arbitration Hours and Hourly Rate
    1. The term "Arbitration Hours" means the time spent for hearings and the time reasonably required for preparation for arbitral proceedings and related matters; provided that, only one-half of the traveling time the arbitrator spends for arbitral proceedings shall be added to the Arbitration Hours except for the time spent for preparation for arbitral proceedings.
    2. Taking into consideration their experience as arbitrators, the complexity of the case and related matters, the Association will determine, before the establishment of the arbitration tribunal, an Hourly Rate out of ¥40,000, ¥30,000 and ¥25,000 for each arbitrator upon hearing the party's opinion as to the remuneration of the arbitrator appointed by that party and upon hearing all the parties' opinions as to the remuneration of the sole or third arbitrator; provided that the Hourly Rate for the third arbitrator shall not be lower than those for the other arbitrators.
    3. Notwithstanding the provisions of the preceding paragraph, all the parties and the arbitrator(s) may unanimously agree to any other Hourly Rate whatsoever before conclusion of the examination proceedings. The parties, when reaching such agreement, shall without delay notify the Association of the agreed Hourly Rate.
    4. If one of the arbitrators has been entrusted by the arbitral tribunal to draw up a draft of the arbitration award or to do any other things, an amount equal to Hourly Rate multiplied by the number of hours spent for the entrusted work shall be added to the amount calculated pursuant to the preceding three paragraphs, and such total amount shall be the basic amount of remuneration for that arbitrator as calculated under the provisions of Article 2.
    5. The arbitrator(s) shall provide the Association with a monthly report stating the time reasonably required for preparation for arbitral proceedings and related matters as well as the traveling time set forth in the proviso of Paragraph 1 of this Article.

    Article 4. Reduction of Hourly Rate
    1. When the Arbitration Hours exceed 60 hours, the Hourly Rate shall be reduced by 10% for every 50 hours in excess of the initial 60 hours, provided that the reduction shall not exceed 50% of the original Hourly Rate and provided further that the Hourly Rate for the time spent for the entrusted work by the arbitrator entrusted to do such work as set forth in Article 3, Paragraph 4 shall be equal to that arbitrator's original Hourly Rate.
    2. At the time of calculating the number of hours set forth in the preceding paragraph, the traveling time set forth in the proviso of Article 3, Paragraph 1 shall not be counted.

    Article 5. Reduction of Arbitrator's Remuneration
    In case an arbitrator loses his/ her status as an arbitrator due to his/her resignation or other reasons during arbitral proceedings, the Association may, in consideration of the circumstances, reduce the arbitrator's remuneration calculated under the provisions of Articles 2 through 4.

    Article 6. Committee for Reviewing Arbitrator's Remuneration
    1. If any arbitrator or party considers the application of the provisions of Articles 2 through 5 inappropriate, that arbitrator or party may request the Association to review the applications of such provisions. Such request shall be made as early as possible, and at the latest by the time of concluding the examination proceedings.
    2. In case a request under the provisions of the preceding paragraph has been made to the Association, the Committee for Reviewing Arbitrator's Remuneration (hereinafter called the "Committee") shall decide whether or not the request has merit. If the Committee accepts the request, it may set the arbitrator's remuneration at any appropriate amount notwithstanding the provisions of Articles 2 through 5.
    3. The Committee's determination under the provision of the preceding paragraph shall be final and no appeal shall be allowed against the arbitrator's remuneration so determined.

    Article 7. Payment of Arbitrator's Remuneration
    1. The Association shall pay to the arbitrator his/her remuneration without delay upon the arbitrator's rendering of an arbitration award or upon the withdrawal of the request for arbitration.
    2. The Association shall pay to the arbitrator his/her remuneration without delay upon the arbitrator's loss of his/her status as an arbitrator due to his/her resignation or other reasons.

    Article 8. Arbitrator's Expenses
    1. The arbitrator shall be entitled to reimbursement by the Association of his/her actual expenses incurred to the extent required for arbitral proceedings, including expenses for travel, hotels, meals and other expenses, and which are defined as "necessary expenses incurred during the proceedings" in Rule 55 of the Commercial Arbitration Rules of the Association.
    2. The travel expenses shall include air, train and taxi fares.
    3. The arbitrator's expenses set forth in Paragraph 1 shall be paid by the Association when the arbitrator has provided documentary evidence thereof to the Association.


    Annex to The Regulations for Arbitrator's Remuneration

    -Upper Limit of the Arbitrator's Remuneration-

    1.A sole arbitrator
    Amount or Economic Value of Claim Maximum Amount of Remuneration
    Not more than ¥20,000,000

    More than ¥20,000,000 but
    not more than ¥100,000,000

    More than ¥100,000,000 but
    not more than ¥500,000,000

    More than ¥500,000,000 but
    not more than ¥1,000,000,000

    More than ¥1,000,000,000 but
    not more than ¥5,000,000,000

    More than ¥5,000,000,000
    10%

    ¥2,000,000 plus 2.5% of
    excess over ¥20,000,000

    ¥4,000,000 plus 1.5% of
    excess over ¥100,000,000

    ¥10,000,000 plus 0.4% of
    excess over ¥500,000,000

    ¥12,000,000 plus 0.1% of
    excess over ¥1,000,000,000

    ¥16,000,000 plus 0.08% of
    excess over ¥5,000,000,000
    Claim whose economic value cannot be calculated As determined by the Association
    2. Two or more arbitrators
    [(Maximum Amount of Remuneration of a sole arbitrator) x (number of arbitrators) x 0.8] shall be the maximum aggregate remuneration for two or more arbitrators.





    What Is "Place of Arbitration"?

    This seems an easy question, but it is actually not so easy to explain.
    As is generally known, there is no meaning of place of arbitration explicitly defined thus far in any arbitration laws and conventions.
    Dr. A.J. van den Berg, in "Non-domestic arbitral awards under the 1958 New York Convention," Arbitration International, Vol. 2, No. 3 (1986), p. 202, takes the view that there are two meanings, one of which is the legal sense called "seat of arbitration," and the other the physical sense. The former is to trigger the applicability of lex loci arbitri and is determined by the parties in their arbitration agreement. In addition, the place of arbitration in the legal sense must be mentioned in the arbitral award as the place where the award is made. Such mention determines whether arbitral awards are "made in the territory of a state other than the state where the recognition and enforcement of such awards are sought," the first criterion of the New York Convention's field of application. On the other hand, the latter, physical sense connotes the place or places where the hearing is held, where the arbitrators administer evidence and where the arbitrators deliberate and sign the award.
    The same view is submitted by Dr. F.A. Mann, in "Where is an award 'made'?" Arbitration International, Vol. 1, No. 1 (1985), p. 108, stating that an award is "made" at the arbitral seat without regard to where the arbitrator actually signs the award.
    In this way, the above views hold that the place of arbitration will be identical to the place where an award is made. Recently, as is well known, however, unlike the above views, the English House of Lords held that the place where an award was made was the place where the arbitrator actually signed the award, [1991] 2 Lloyd's Rep 435, and it seems to evoke some controversy and raise the question of not only where an award is made but what the place of arbitration is. As stated in the judgment by Lord Oliver of Aylmerton referring to the wisdom of the advice in Redfern & Hunter, Law and Practice of International Commercial Arbitration, in practice it is certainly safer (if less convenient) for the arbitrators to actually meet at the place of arbitration for the purpose of checking, signing and dating their award.
    The next question is artlessly raised as to whether the parties, following the "seat" theory with regard to lex arbitri, may choose without any quantitative restriction any "place of hearings" and "place of arbitration." That is, may the parties choose Tokyo as the place of hearings and Paris as the place of arbitration because they feel that Tokyo is geographically convenient and want the arbitration to be governed by French arbitration law? In this regard, it is observed by Jonathan Hill, in The Law Relating to International Commercial Disputes (1994), p. 478, that if the most convenient geographical location for the hearings is country X, but the parties want the arbitration to be governed by the law of country Y, the parties should choose country Y as the seat and conduct the hearings in country X. Such a choice seems theoretically possible, but instead it will return to the question at the outset of what "place of arbitration" is. If the parties may so choose, should it be observed that they may directly choose the law governing the arbitration, without taking a roundabout way of choosing the place of arbitration?

    - by Tatsuya Nakamura, Manager, Arbitration Department, JCAA




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    E-mail:
    jcaa-osk@mail.infomart.or.jp

    Kobe Office
    The Kobe Chamber of Commerce & Industry
    1, Minatojima-Nakamachi 6-chome Chuo-ku, Kobe 650, Japan

    Nagoya Office
    The Nagoya Chamber of Commerce & Industry
    10-19, Sakae 2-chome Naka-ku, Nagoya 460, Japan

    Yokohama Office
    The Yokohama Chamber of Commerce & Industry
    2, Yamashita-cho Naka-ku, Yokohama 231, Japan

    For further information, kindly address enquiries to any of the above offices.
    If you have any comments or questions on this newsletter, please contact our arbitration department.


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