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The Japan Commercial Arbitration Association

January 2001 JCA

Number 9

International Commercial Arbitration Forum 2000 Held in Osaka and Tokyo: "The Recent Interesting Issues in International Commercial Arbitration" and "The Arbitrator's Rights and Duties"

The Japan Commercial Arbitration Association (JCAA) held its "International Commercial Arbitration Forum 2000" (Forum 2000) last November. In addition to administrative services for the arbitral proceedings, JCAA holds forums, seminars and symposiums every year in order to develop infrastructures for arbitration and to promote wider utilization of arbitration in Japan. Until 1999, an international forum inviting prominent foreign experts in the field of international arbitration was held once a year in either Tokyo or Osaka in turn. Given the recent rise of interest in arbitration and other ADR in Japan, Forum 2000 was held in 2000 in both cities; in Osaka on November 22, and in Tokyo on November 24. This article briefly introduces some of the discussions held at the Forum. (The reporter, Masahiro Kobayashi of JCAA, takes full responsibility for the content of this report.)

 This year's forum was, like "International Commercial Arbitration Forum 1999" (Forum 1999; see Newsletter No. 6), supported by the then Ministry of International Trade and Industry, the Ministry of Justice, the Japan Federation of Bar Associations, and ten other major organizations in Japan.

 Forum 2000 had the two themes of "The Recent Interesting Issues in International Commercial Arbitration" and "The Arbitrator's Rights and Duties". Forum 2000 focused on, among other subjects, the arbitrators themselves, who play the most important role in arbitration.

 At Forum 2000, Mr. Yasuhei Taniguchii coordinated the discussion provided by, and sometimes among, the three speakers, Mr. Stephen R. Bondii, Mr. Julian D.M. Lewiii, and Mr. Toshio Sawadaiv; and two guest commentators, Mr. Tadashi Ishikawav and Mr. Toshihiko Omotovi. Forum 2000 invited these two guest commentators from the so-called demand side of arbitration, because they were able to contribute a "customers' view" to the Forum. Each Panelist had a wealth of knowledge about and experience in international commercial arbitration. An audience of more than 300 lawyers, academics, government departments, and business people attended Forum 2000.

 After the opening address and introduction of the panelists by Mr. Norihiko Maeda, JCAA President, Mr. Tatsuya Kugo, Deputy Director-General of the International Trade Administration Bureau at the then Ministry of International Trade & Industry pointed out, among other things, his guests' remarks that ADR could be an effective and efficient resolution mechanism for disputes such as those that occurred in electronic B to B transactions and, in particular, B to C transactions.

 Forum 2000 proceeded with the guest speakers first making their presentations, and next the two commentators sharing their opinions on the issues presented. Then the coordinator organized panel discussion sessions followed by questions and answers.

Part I "The Recent Interesting Issues in International Commercial Arbitration"

 Mr. Bond began Part I of the Forum with the remarks "arbitration is an art, not a science" in the sense that there are no absolute truths in arbitration, and it was in constant evolution. He dealt with the following four issues; 1) the independence and impartiality of the arbitrator, 2) production of documents in international arbitration, 3) the arbitration of tort claims, and 4) confidentiality in mediation.

 According to Mr. Bond, in order to ensure that the arbitration proceedings are as fair and unbiased as possible, various steps are being taken by arbitral bodies to ensure the arbitrator's impartiality and independence, the former being needed for justice to be done, and the latter for justice to be seen to be done. Regarding the production of documents in international arbitration, Mr. Bond pointed to "The Rules on the Taking of Evidence in International Commercial Arbitration, 1999" (The International Bar Association) as a satisfactory attempt in this area. The rules provide a reasonable guideline for document production in arbitration by introducing the "category of documents" concept. As to the arbitration of tort claims, Mr. Bond stated that a carefully-drafted, broad arbitration clause could cover such claims as tortuous interference. With regard to confidentiality in mediation, Mr. Bond suggested that, if mediation was mandatory followed by arbitration, it should be explicitly stated that the procedural elements of mediation (such as actions in bad faith by a party) should not be regarded as confidential.

 Part II "The Arbitrator's Rights and Duties"

 After the coffee break, the Forum moved onto Part II, the arbitrator's rights and duties. Mr. Lew presented his thoughts on the arbitrator's rights and Mr. Sawada on the arbitrator's duties.

 First, Mr. Lew presented to the audience the very basis of arbitrator's rights; we expect an arbitrator to organize and control the arbitration process, to act fairly and equally to both parties, to act efficiently to minimize costs, and finally to resolve the issues in dispute, and make an award. We therefore give the arbitrator power and rights necessary to meet these requests. We in turn are expected to recognize such authority of arbitrator. Such power and rights are based upon the parties' agreement, subject to mandatory law, and the applicable arbitration rules and arbitration laws. Mr. Lew stated that the arbitrator's terms of appointment, including the right to remuneration, must be known at the outset of arbitration in order to facilitate the process of arbitration.

 It is also important, Mr. Lew continued, that arbitrators know what issues are to be dealt with. He referred to the ICC terms of reference procedure which are used to define the scope of the dispute and at least some of the issues in the arbitration. Properly-used terms of reference can contribute to effectiveness and efficiency in arbitral proceedings. Mr. Lew stressed that party autonomy in arbitration proceedings remains one of the key distinguishing features of arbitration.

 Next, Mr. Sawada brought to the audience the other side of the arbitrator's rights, that is, the arbitrator's duties. As Mr. Lew mentioned, an arbitrator is given power and rights to control arbitration proceedings. As such, an arbitrator has in turn a duty to conduct the proceedings with diligence. Mr. Sawada referred to the "Rules of Ethics of International Arbitration" (The International Bar Association). He also discussed practical points that need to be considered by the party when selecting an arbitrator in order to avoid undue delay at a later stage of arbitration.

 With respect to the duty of the arbitrator to secure for the parties sufficient opportunities for arguments during the proceedings, Mr. Sawada pointed out that giving the parties "reasonable opportunity" (U.K. Arbitration Act 1996) rather than "full opportunity" (UNCITRAL Model Law) would be sufficient, considering an appropriate balance between the parties' autonomy and efficiency.

 Mr. Sawada also provided his thoughts on settlement and mediation in relation to arbitration. Well recognizing the critical arguments on this complicated subject, he pointed out that particularly for the ongoing, future relationship between the parties, introducing mediation during arbitration proceedings subject to the parties' agreement could serve as a good mechanism to resolve the dispute in a constructive way. Mr. Sawada at the same time pointed out three important elements for such an approach; namely, the presence of person(s) with decision-making authority during the process, both parties having the intention to continue a future business relationship and the willingness to reach an agreement.

Throughout Part I and Part II, the two commentators provided their views on the issues discussed. To illustrate just a few, Mr. Ishikawa stressed the importance of a careful approach to candidates for a party-appointed arbitrator on this point, so as to prevent the other party from challenging the impartiality. He also stated that the terms of reference could facilitate the arbitration process considerably. Mr. Ishikawa stated that the parties should cooperate in document production with reasonable limitations for an efficient arbitration process. Mr. Omoto pointed out the practical problems of document production and situations where the relationship of bargaining power between the parties had a great effect on the parties' autonomy in arbitral proceedings, and sometimes the parties' agreement would be difficult to obtain. He also suggested with respect to mediation and arbitration in general, that the two be held concurrently, rather than putting mediation before arbitration.

 The discussion at the Forum was also enriched by questions from the floor and answers from the panel, which Mr. Taniguchi carefully led as the coordinator. Finally, Mr. Taniguchi concluded the panel discussion by providing two fundamental elements; that arbitration, although it was entrusted to the parties' autonomy, was still subject to the legal system and therefore harmonization between the two would be important. The other was the difference in legal, social and cultural backgrounds among countries. At Forum 2000, these problems were well discussed from different viewpoints.

 Forum 2000 was completed successfully due to the cooperation of the persons and organizations concerned. JCAA expressed its deep appreciation to the guest panelists for the input of their expertise, to the organizations concerned for their sponsorship, and to the audience for participation.
iProfessor of Tokyo Keizai University, Professor Emeritus of Kyoto University, Council Member of International Council for Commercial Arbitration, Member of Appellate Body of WTO's Dispute Settlement Body, Senior Advisor to JCAA
iiPartner of White & Case LLP, Paris; Former Secretary General of ICC International Court of Arbitration
iiiPartner, Herbert Smith London; Head of the School of International Arbitration, Centre for Commercial Law Studies, Queen Mary, University of London;
ivProfessor Emeritus of Sophia University, Chairman of the Japanese Council on International Transactions, Vice Chairman of the ICC International Court of Arbitration, Senior Advisor to JCAA
vSenior Partner of Oh-Ebashi Law Office
viIndependent Consultant(Construction Management & Dispute Resolution), Fellow Member of the Chartered Institute of Arbitrators, International Panelist of American Arbitration Association, Former Deputy General Manager of international Civil Department of Taisei Corporation

JRC Sets Up Study Group to Deliberate on ADR Mechanisms

The Judicial Reform Council (Shihoseido Kaikaku Shingikai), which was established under the Cabinet in 1999 with the mission to put forward an effective judicial reform plan for the 21st century, said in its interim report released in November 2000 that more efforts should be made to develop ADR mechanisms.

 While stressing the need to develop the present judicial mechanisms, the report says that for the realization of a more accessible and user-friendly judicial system, ADR mechanisms must also be developed.

 In this regard, JRC set up a study group in December 2000 to deliberate on, among other subjects, the infrastructures needed for ADR mechanisms to develop, and ideal forms of cooperation between the courts and ADR organizations.

 The study group comprising representatives from ministries and agencies in charge of ADR, the Japan Federation of Bar Associations, and the Supreme Court will hold four meetings by the beginning of March 2001 and will submit its opinions to JRC. JRC is planning to include the opinions in a final report to be released in June 2001.

JCAA-SMC Cooperation Agreement Signed

Sharing the view that building a lasting institutional link is desirable for the effective promotion of ADR in Japan and Singapore, JCAA and the Singapore Mediation Centre (SMC) concluded a cooperation agreement on November 20, 2000. The agreement was signed in Singapore by JCAA President Norihiko Maeda and SMC Chairman Goh Joon Seng.

 SMC, a non-profit organization and a subsidiary of the Singapore Academy of Law, has been dedicated since its establishment in 1997 to promoting the amicable and fair settlement of disputes mainly through administering mediation as well as providing training in negotiation and mediation skills.

JCAA President Norihiko Maeda, right, shakes hands with SMC Chairman Goh Joon Seng in agreement

 This is the second cooperation agreement that JCAA has concluded with a Singaporean institution. The first one was concluded with the Singapore International Arbitration Centre (SIAC) in 1992.

 The conclusion of the agreement was inspired by and linked to the Japanese Government's move toward concluding an economic partnership agreement with Singapore. Prior to scheduled inter-governmental talks, a joint study group established by the two governments released a report in September 2000, positioning ADR as a speedy, amicable and fair dispute settlement mechanism for business entities in the two countries.

 The report then calls on both governments to promote the awareness of and access to the use of ADR through the collaborative efforts of such ADR organizations as JCAA, SMC and SIAC.

 The report further encourages JCAA and other organizations to cooperate with each other in the following areas:
a.the provision of mediation and arbitration services;
b.the provision of training in negotiation, mediation and arbitration skills;
c.the provision of consultancy services for dispute avoidance, dispute management and ADR mechanisms; and
d.the provision of facilities for arbitration hearing and assistance in selecting and appointing suitable arbitrators in appropriate cases.
JCAA and SMC finalized the text of the agreement in line with those views and recommendations.

 So far, including the above, JCAA has entered into 41 cooperation agreements with ADR institutions worldwide.

APEC ADR EEP 2000 in Bangkok (1) - Seminar Report

JCAA and the Institute for International Studies and Training (IIST) have been playing a key role in APEC's Alternative Dispute Resolution Executive Education Project 2000 (ADR EEP 2000) since 1998. The first major activities of ADR EEP 2000 were held in Bangkok during November 14th through 17th, 2000. The activities in Bangkok consisted of a seminar and a workshop, and this Newsletter reports on the speeches and materials prepared for the seminar.

 ADR EEP 2000 is a series of activities to promote ADR in the APEC region through executive education. Mr. Norihiko Maeda, JCAA President and Chairman Emeritus from the Business Management Network of the APEC Human Resources Development Working Group, is the project overseer. The project includes three or four seminars in the APEC region for executive education on ADR, and the seminar in Bangkok was one such event forming part of the APEC project. (For more background, purpose and other details of ADR EEP 2000, see JCA Newsletters Nos. 4, 5 and 6.)

 The seminar, held on November 15 at the Hilton Bangkok International at Park Nai Lerd, was hosted by the Thai Arbitration Institute and titled "ADR and Debt Restructuring: the Road to Economic Recovery," reflecting one of the major concerns in the recent economic situation in the region. An audience of approximately 100 people attended both from within and outside of Thailand.

 The first session of the seminar focused upon the possibility of utilizing ADR for debt restructuring. The session was first welcomed by Justice Prasobsook Bundech, chairman of the organizing committee and the Chief Justice of the Central Intellectual Property and International Trade Court, and opened with a speech by Justice Santi Thakral, Acting President of the Supreme Court. The seminar then continued with a keynote speech by Justice Krongkiet Khomson, Secretary-General of the Office of the Court of Justice, who reported on, among others, the movement in Thailand to cope with the current problem of non-performing loans through ADR. Mr. Pisit Leeahtam, Deputy Minister of Finance, reiterated the possibility of using ADR to resolve non-performing loan problems in Thailand as well as in the Philippines. Next, Mr. Krit Kraichitti, Deputy Director-General of the Department of Economic Affairs at the Ministry of Foreign Affairs pointed out the importance of learning from experience in the APEC region to overcome economic disputes through ADR, which would offer more cooperative and non-confrontational options. Then, Mr. Robert F de Ocampo, President of the Asian Institute of Management and former Secretary of Finance of the Philippines, gave a speech on facilitating economic recovery and growth by ADR. Mr. Ocampo offered a broad view of the intertwined relationship between continuous economic growth and the infrastructure to support it, including an efficient mechanism for dispute resolution, and pointed out, among others, the advantages of ADR from the viewpoint of social development in general for conscientious citizens.

 The second session of the seminar was presented as a panel discussion and comments on the "Past, Present and Future of ADR in Growing Trade and Investment" chaired by Professor Sansern Kraichitti, Former Chief Justice of the Court of Appeal, and featured APEC experts, most of whom were representatives of the organizations for dispute resolution in the region. These experts were Mr. Carlos Eugenio Jorquiera, President of the Inter-American Commission of Commercial Arbitration and President of the Chile Arbitration Center; Mr. M. Husseyn Umar, Vice Chairman of the Indonesian National Board of Arbitration; Mr. Norihiko Maeda from Japan; Mr. Jong-Hee Kim, President of the Korean Commercial Arbitration Board; Mr. Custodio O. Parlade, President of the Philippine Dispute Resolution Center, Inc.; and Professor Anan Chantara-opakorn of Thammasat University, Thailand. All of them made valuable contributions to the seminar. At the presentation, JCAA President Mr. Maeda offered the audience an example of the advantages of ADR from the viewpoint of its flexible and constructive nature, explained JCAA history and Japanese features of dispute resolution. He then emphasized the importance of executive education on ADR in the business context, that forms the core of ADR EEP 2000. After these valuable presentations, another group of APEC experts provided their thoughts and comments. These experts were Professor Malcolm Smith from the University of Melbourne, Australia; Mr. Peter Caldwell, Ex-Secretary General and Council Member from the Hong Kong International Arbitration Centre; Mr. Rodney Gates, international consultant from New Zealand and former Ambassador to Japan; and Professor John Barkai from the University of Hawaii, USA. The seminar was concluded with a closing speech delivered by Mr. Maeda.

 This seminar was a part of ADR EEP 2000 and it was held back-to-back in Bangkok with its first major workshop. The seminar and workshop gave a strong driving force to the project. Establishing a close network among ADR experts in the APEC region was just one example of the successful outcomes of the Thai activities. The workshop on November 14, 16 and 17, 2000 and the future progress of ADR EEP 2000 will be reported on in the following JCA Newsletters.

APEC ADR EEP 2000 Thai Seminar Participants

Front Row (LR)
Mr. Carlos Rodriguez Gonzalez-Valadez, Lawyer (Mexico)
Mr. Ninnat Olanvoravuth, Secretary-General, Chulalongkorn University (Thailand)
Mr. Loong, Seng Onn, Deputy Director, Singapore Mediation Centre (Singapore)
Ms. Nieves R. Confesor, Professor of Asian Institute of Management; former Secretary of Labor and Employment (Philippines)
Mr. Custodio O. Parlade, President, Philippine Dispute Resolution Center, Inc. (Philippines)
Mr. Peter S. Caldwell, Council Member, Hong Kong International Arbitration Centre (Hong Kong)
Mr. John Barkai, Professor, University of Hawaii Law School (USA)
Mr. Voravuth Dvadasin, Chief Justice, the Chiang Mai Juvenile and Family Court (Thailand)
Mr. Sittipong Tanyapongpruch, Judge, The Arbitration Office (Thailand)
Back Row (LR)
Ms. Etsu Inaba, Senior Researcher, APEC Business Management Network Center, Institute for International Studies and Training (Japan)
Mr. Jong-Hee Kim, President, The Korean Commercial Arbitration Board (Korea)
Mr. Husseyn Umar, Vice Chairman and Board Member, Indonesian National Board of Arbitration (BANI) (Indonesia)
Mr. Robert F. de Ocampo, President, Asian Institute of Management ; former Secretary of Finance of the Philippines (Philippines)
Mr. Krit Kraichitti, Deputy Director-General, Department of Economic Affairs, Ministry of Foreign Affairs (Thailand)
Mr. Krongkiet Khomson, Secretary-General, the Office of the Court of Justice (Thailand)
Mr. Rodney J. Gates, International Consultant, Arbitrator and Mediator (New Zealand)
Mr. Prasobsook Bundech, Chairman of the organizing committee and the Chief Justice of the Central Intellectual Property and International Trade Court (Thailand)
Mr. Santi Thakral, Acting President, the Supreme Court (Thailand)
Mr. Norihiko Maeda, President, The Japan Commercial Arbitration Association (Japan)
Mr. Prachya Yuprasert, Judge, The Arbitration Office (Thailand)
Mr. Sansern Kraichitti, former Chief Justice, the Court of Appeal (Thailand)

The 2nd Symposium of International Commercial Arbitration in the Asia-Oceania Region -"Revision Problems Associated with Arbitration Laws"- in Nagoya

The 2nd Symposium of International Commercial Arbitration in the Asia-Oceania Region - "Revision Problems Associated with Arbitration Laws" - was held at the Nagoya Congress Center in Nagoya City on the 25th and 26th of November, 2000. The Institute for Socioeconomic Dispute Studies of Meijo University's Graduate School of Law, headed by Professor Kaoru Matsuura of Meijo University, organized the Symposium.

 The Symposium focused on the various problems to be considered in revising Arbitration Laws, such as hybrid dispute resolution, interim relief in arbitration, arbitrability, formation of arbitration agreements, appointing and challenging arbitrators, remittance of arbitration awards to tribunal for reconsideration, etc. Nine overseas experts from Asia and Oceania and two Japanese experts gave presentations on the above topics. Lively and fruitful discussions followed most of them. The attendants were mainly law professors and lawyers who contributed to the two-day symposium by generating enthusiastic and lively questions and comments.

 The symposium began with the opening address by Mr. Masaki Aminaka, President of Meijo University, and continued with an outline of the two-day symposium by Professor Matsuura.

 The following topics were reported and discussed in the symposium:

 The first session was coordinated by Mr. Yoshihisa Hayakawa, Associate Professor of Rikkyo University. Mr. Michael C. Pryles, from Minter Ellison solicitors in Australia gave a repot on the topic " Multi-tiered Dispute Resolution Clause" and Professor Roger Pitchforth of Massey University, New Zealand gave a presentation on the topics "Regulations as to hybrid dispute resolution processes" and "Court Annexed ADR".

 Professor Yasuhei Tanigchi of Tokyo Keizai University moderated the second afternoon session. The topic "The meaning and definitions of an award for the purpose of enforcement under the New York Convention" was reported on by Mr. Michael C. Pryles and "Regulations as to hybrid dispute resolution processes and in particular as to combination of arbitration with conciliation" was reported on by Mr. Yasunobu Sato, Associate Professor of Nagoya University. "Combination of Arbitration with Conciliation" was reported on by Mr. Wang Sheng Chang, Vice Chairman of CIETAC from the People's Republic of China, and "Granting of Interim Relief in Arbitration" was reported on by Mr. Custodio O. Parlade, Managing Partner of Benitez Parlade Africa Herrera Parlade & Panga from the Republic of the Philippines. "Interim Orders" was reported on by Mr. M Sornarajah, National University of Singapore, and the same topic "Interim Orders" was also reported on by Professor Matsuura.

 Professor Matsuura coordinated the third session in the morning of the following day. The topic " Arbitrability" was reported on by Mr. M. Sornarajah, and "Formation of Arbitration Agreements" and "The Appointment of Arbitrators in case of the parties' failure to appoint Arbitrators" was reported on by Professor John Huan Wen Chen of the Legal Research Institute of National Defense and Administrative Academy, from Chinese Taipei. "The Selection, Appointment, Challenge, and Replacement of Arbitrators" was reported on by Mr. Custodio O. Parlade.

 At the fourth session in the afternoon, Mr. Kim Sangsoo, Associate Professor of Dongguk University, from the Republic of Korea gave a presentation on the topics "The relationship between the New York Convention and arbitration legislation on the enforcement of an arbitral award" and "The time limit for rendering the arbitral award." The Topic "Legislative Proposal on Remittance of Arbitration Awards to a Tribunal for Reconsideration by Court of Law" was reported on by Mr. Wang Sheng Chang and also by Professor Matsuura. Mr. Toshio Sawada, Vice President of the ICC International Court of Arbitration, Professor Emeritus of Sophia University moderated the fourth session.

 JCAA has been supporting this project. Mr. Norihiko Maeda, JCAA President, Mr. Masaharu Onuki, General Manager of JCAA's Osaka Office, and Mr. Tatsuya Nakamura, Deputy General Manager of the Arbitration Department participated in the symposium.

The JCA Newsletter is published by:

The Japan Commercial
Aribitration Association


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