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The Japan Commercial Arbitration Association

March 2001 JCA

Number 10

ADR and Chamber of Commerce & Industry

There are more than 500 local Chambers of Commerce & Industry ("CCIs") in Japan. As a major entity in each local economy, a CCI could play a very important and effective role in promoting ADR within its territory. In fact, 85% of them provide in their charters that dispute resolution through ADR (mediation, conciliation and/or arbitration) is one of their missions. JCAA has made an arrangement with more than 200 of these local CCIs that they would refer such a dispute to JCAA for resolution.

On February 15, 2001, a speech titled "ADR, Judicial Reform and Chamber of Commerce & Industry" was delivered by Mr. Norihiko Maeda, JCAA President, at the Japan Chamber of Commerce & Industry ("JCCI"). The speech was made in association with their 497th board meeting. Mr. Kosaku Inaba, President and other senior executives of JCCI, along with approximately 200 presidents, vice presidents and senior executives of major local CCIs attended the meeting.

The purpose of the speech was to impress in the minds of those top CCI executives the importance and benefit of ADR and, no less importantly, to make them aware of their own capacities to expedite dispute resolution through ADR. The speech was prepared in plain language with many examples and the audience maintained its interest throughout the speech. The speech began with a general explanation of ADR. Since ADR presupposes the existence of a "dispute," Mr. Maeda first characterized it as a conflict that was made evident, with its resolution being requested. He then explained methods of dispute resolution from various viewpoints, including who would resolve it (judges, arbitrators, etc.) and who would select those neutrals. ADR was then defined as any method of dispute resolution (other than litigation) where a neutral third party or parties was/were involved. In Japan, ADR is widely recognized as arbitration (chusai), conciliation (chotei) and mediation (assen).

The speech stressed the advantage of ADR in the sense that it allows of flexible resolution. Mr. Maeda referred to a couple of actual cases of disputes between real state developers and residents, one which was resolved by litigation, and the other through arbitration which provided a far more satisfactory resolution.

ADR itself is regarded as a key element in judicial reform, and has recently been the subject of spirited discussions in Japan. The speech, however, pointed out the difference in approach, that is, ADR being discussed in such judicial reform context is regarded as rather a supplemental measure for governance by authority. On the other hand, people expect ADR to be a tool to obtain, to the maximum extent possible, satisfactory resolution of disputes, such a resolution often being difficult to obtain through litigation. In the latter sense, Mr. Maeda emphasized the role of CCIs.

Article 9, item 12 of the Chamber of Commerce Act provides that local CCIs can conduct arbitration, conciliation or mediation for resolution of commercial disputes. Although it is not mandatory to do so, 85% of CCIs do provide such functions in their charters as previously mentioned. Yet, they have had almost none such cases so far. The speech presented possible reasons for such non existence of disputes before local CCIs, i.e. that such a dispute, even if there was one, might be resolved through patient settlement negotiation by the involved parties and never come to attention of a CCI. Alternatively, an involved party might just accept or silently bear whatever he was forced to face as a consequence of the dispute, no matter how dissatisfied or even detrimental it was, perhaps because he considered there was nothing he or a CCI could do.

Mr. Maeda emphasized that one of CCI' important roles should be to bring to light such an involuntary acceptance of the result of commercial disputes, and guide it along the right lines for proper dispute resolution. Some examples of the role expected from local CCIs, he illustrated, would be for them to prepare an adequate stage or occasion for settlement negotiations between the parties (mediation) or to help the parties nominate proper conciliator(s) (conciliation). With regard to arbitration, he suggested they refer it to JCAA. Until now, it seems there has not been a very strong demand for ADR in Japan. However, Mr. Maeda pointed out that there had been no demand for cellular telephones before they were introduced, and that just silently accepting whatever one faces in commercial disputes could mean there is a potential demand for ADR. Consequently, he proposed to make such a potential demand more apparent by conducting pre-sales activities, that is, to widely conduct publicity activities for ADR promotion along with jointly developing appropriate ADR schemes in cooperation with CCIs, JCCI and bar associations.

Finally, Mr. Maeda drew the audience's attention to the arrangement that JCCI planned to conduct various promotional activities for ADR in the fiscal year 2001, with a budget of approximately 24 million Japanese Yen from the Ministry of Economy, Trade and Industry. Because JCAA has a close relation with JCCI, many of these activities are being entrusted to JCAA. JCAA is committed to carry out these activities in the coming fiscal year (starting April 2001).

A Japanese summary of "ADR, Judicial Reform and Chamber of Commerce & Industry" appears on March 2001 issue of "JCA Journal." Its amplified full text (in Japanese) will also be found on JCAA Home page (http://www.jcaa.or.jp).

APEC ADR EEP 2000 in Bangkok (2) - Workshop Report

JCAA and the Institute for International Studies and Training have been playing a key role in APEC's Alternative Dispute Resolution Executive Education Project 2000 (ADR EEP 2000). The first major activities of ADR EEP 2000 were held in Bangkok from November 14th through 17th, 2000 and Newsletter No. 9 reported on the seminar held on November 15th. This Newsletter reports its workshop that was held on November 14th, 16th and 17th, 2000. ADR EEP 2000 is a series of various activities to promote ADR in APEC regions through executive education. (See JCA Newsletters Nos. 4, 5, 6 and 9.) The project consists of three major stages: a workshop, seminars, and a symposium. The workshop held in Bangkok last November was one of such activities.

Experts from various APEC regions participated in the workshop. Those experts were representatives of arbitral and other ADR institutions, law professors, judges and other professionals in the field of ADR and/or executive education. (Please see the photograph on the next page.)

Due to its own culture and history, each APEC region has various situations and attitudes toward disputes and dispute resolutions. These differences may well affect how to implement ADR EEP 2000. A preliminary survey was therefore conducted prior to the workshop. In the survey, the experts were questioned as to how these differences were perceived in reference to disputes (dispute avoiding or more confrontational, international versus domestic), educational efforts (about arbitration or other ADR), the target audience, program components and other related matters. The results of the survey were reported at the outset of the workshop so that each expert could share a common basis for discussion. Also, most of the experts had prepared papers on the current ADR and executive education status and presented the salient part at the workshop.

The discussions during the workshop included various important points about ADR EEP 2000, such as: a) effectiveness of ADR to make minority or disadvantaged groups equal partners of business due to ADR's flexibility, b) a caveat that ADR should be chosen in situations when it is likely to be effective since ADR is not an almighty method to resolve disputes, and c) constantly changing and/or developing status about ADR mechanisms in various economies to be reflected in ADR EEP 2000, d) the importance of clear definitions of ADR-related terminologies.

The workshop participants then proceeded to discuss various important factors for designing most appropriate framework for ADR EEP 2000. These factors included scope and coverage of the "dispute" process within the context of ADR EEP 2000. For the project to be able to be attractive to its target audience, it was decided that the project could include any part of the following processes: Parties starting business talks to achieve a transactionObstacles ariseOvercoming the obstacles through negotiationReaching an agreement Disputes ariseA dispute resolution through negotiation by the parties concerned If not resolved, negotiation facilitated by a third partyIf still not resolved, dispute decided by a third party.

With regard to the target audience of ADR EEP 2000, Mr. Norihiko Maeda, as the project overseer, explained, the targets were the "consumer" of ADR (i.e., business people and their legal advisers). In addition, students in law schools and management development courses could be included as they were the future "consumer" of ADR.

Also included in these factors was identification of the relevant skills and knowledge to be imparted through ADR EEP 2000. These relevant skills would include the drafting of an ADR contract, negotiation, mediation and arbitration; the relevant knowledge would include the differences in various ADR methods, the legal effect of various ADR methods and different legal and cultural backgrounds.

Other factors that were considered during the workshop included the duration of the program, as well as having a strategic approach for the project to add value to existing educational activities about ADR in APEC regions.

The experts then worked on the prototype designs of ADR education programs. Two types of blueprints were proposed, both short duration (one half-day) awareness-raising programs and a two-day program, which would include some skills development. These prototype designs would be improved, adjusted and fine-tuned through continued discussion among experts for actual pilot seminars, the next stage of ADR EEP 2000. In addition to the seminar type of program design, the project may also carry out other alternative activities, such as breakfast/lunch meetings with business people, round-table discussions or visits to the Supreme Court to meet judges and see documentation of best practices (e.g., video taping of testimonials).

At the end of the workshop, the experts agreed on the following future actions: discussions to refine the curricula, information sharing among experts, network of experts for collaborations, organizing future activities/seminars, and possible linking with other APEC activities.

This workshop produced a firm basis for ADR EEP 2000. Yet, it was just the start of the project. It is expected that the experts in the field of ADR, who did (or did not) participate in the workshop would cooperate in the future to make the project as valuable as possible so that ADR might be able to serve as an effective means of resolving international commercial disputes to further facilitate trade and investment within APEC regions.

APEC ADR EEP 2000 Thai Workshop Participants

Front Row (LR)
    Ms. Yuko Takano, staff member, Institute for International Studies and Training (Japan)
    Mr. Custodio O. Parlade, President, Philippine Dispute Resolution Center, Inc. (Philippines)
    Mr. Voravuth Dvadasin, Chief Justice, the Chiang Mai Juvenile and Family Court (Thailand)
    Mr. Norihiko Maeda, President, The Japan Commercial Arbitration Association (Japan)
    Ms. Etsu Inaba, Senior Researcher, APEC Business Management Network Center, Institute for International Studies and Training (Japan)
    Mr. Carlos E. Jorquiera M., President, The Inter-American Commercial Arbitration Commission; President, Chile Arbitration Center (Chile)
    Ms. Khampang Samerpitak, legal officer, The Thai Arbitration Institute (Thailand)
Middle Row (LR)
    Mr. Prachya Yuprasert, Judge, The Arbitration Office (Thailand)
    Mr. Anan Chantara-opakorn, Professor, Thammasat University (Thailand)
    Mr. Sittipong Tanyapongpruch, Judge, The Arbitration Office (Thailand)
    Mr. Husseyn Umar, Vice Chairman and Board Member, Indonesian National Board of Arbitration (BANI) (Indonesia)
    Mr. Toshihiko Omoto, Construction Project Consultant (Japan)
    Mr. Phijaisakdi Horayangkura, Professor, Chulalongkorn University (Thailand)
    Mr. Arthur B. Ridgeway, Registered Psychologist (Canada)
    Mr. Malcolm Smith, Professor, The University of Melbourne (Australia)
    Mr. Peter S. Caldwell, Council Member, Hong Kong International Arbitration Centre (Hong Kong)
    Mr. Loong, Seng Onn, Deputy Director, Singapore Mediation Centre (Singapore)
    Mr. John Barkai, Professor, University of Hawaii Law School (USA)
    Mr. Carlos Rodriguez Gonzalez-Valadez, Lawyer (Mexico)
    Mr. Masahiro Kobayashi, General Manager, The Japan Commercial Arbitration Association (Japan)
Back Row (LR)
    Mr. Jong-Hee Kim, President, The Korean Commercial Arbitration Board (Korea)
    Mr. Masaharu Onuki, General Manager, The Japan Commercial Arbitration Association Osaka Office (Japan)
    Mr. Takao Tateishi, Administrator, Tokyo Maritime Arbitration Commission of The Japan Shipping Exchange, Inc. (Japan)

Patent Attorneys Allowed to Represent a Party in Arbitral Proceedings

Effective January 6, 2001, Japan has revised its Patent Attorney Law mainly to expand the scope of Japanese patent attorney' practices. Under the revised law, Japanese patent attorneys have gained the right to represent a party to the proceedings of an arbitration case before designated organizations when the case is related to industrial property rights.

JCAA has been designated by the government as one of two such organizations. The other is the Arbitration Center for Industrial Property, set up jointly in 1998 by the Japan Federation of Bar Associations and the Japan Patent Attorneys Association.

This is the first drastic revision since the law was enacted in 1921. The primary objective of the revision is to provide better protection for industrial property rights by giving patent attorneys a broader scope in their practices. It is expected that the revised law will help increase global competitiveness of Japanese industries and revitalize small and medium sized enterprises.

The JCA Newsletter is published by:

The Japan Commercial
Aribitration Association


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