1. UNCITRAL Model Law

After offering a set of ad hoc arbitration rules to the world business community in 1976, the United Nations Commission on International Trade Law (UNCITRAL) decided in 1981 to prepare a model international arbitration law for nations to adopt either fully or partly. The Working Group devoted five sessions to the project and in 1985, after carefully scrutinizing the draft and the many comments from member nations, UNCITRAL produced its Model Law on International Commercial Arbitration. 1 Over the last twenty years this instrument has come to be used by more than forty nations as a basis for their arbitration laws.

In Japan, throughout the twentieth century, negotiation and litigation were the usual means of settling disputes. Mediation was used extensively to settle domestic and family disputes. Arbitration, however, was rarely tried, and thus it was not felt necessary to revise or update the last chapter of the 1890 Code of Civil Procedure, 2 which contained twenty articles on arbitration. Teachers of civil procedure seldom had time to cover this chapter, and practitioners showed little interest in the scarcely used procedure.

After World War II, recalling how disputes in former times had been settled by merchants of the Hanseatic League and the guilds in England, some commercial law teachers and practitioners began showing interest in arbitration. Notably[Page725:] Professor T. Kitagawa (1916-1976), having returned to a free world after detention in Siberia, went about promoting an understanding of arbitration, through writings and lectures, with the zeal of an ardent missionary. 3His advisor, Professor T. Suzuki (1905-1995), the doyen of commercial law scholars, together with eminent scholars in civil procedure, Professors T. Kikui (1899-1991),

N. Koyama (b. 1917) and A. Mikazuki (b. 1921), set up an arbitration study group (Chûsai Kenkyûkai) in 1979. One of the group's tasks was to prepare a draft arbitration law on the basis of a careful comparative study of major or new arbitration laws in other countries. An initial draft, known as the Chûsaihô Shian (hereinafter 'First Draft'), 4 was produced after ten years, and was followed twelve years later by the 2001 draft, known as Chûsaihô 2001 Shian (hereinafter 'Second Draft'). 5 Also in 2001, the cabinet body responsible for justice reform-Shihô Seido Kaikaku Shingikai-issued an urgent call for a new legal framework for arbitration reflecting worldwide developments, including UNCITRAL studies. 6 A government study group was accordingly set up. In contrast to the approach taken two decades earlier, when it was felt that the UNCITRAL Model Law should be but one of several items consulted as part of a comparative study, the policy adopted in 2001 was to use the Model Law as the basis for the new law. The resulting arbitration law was promulgated in August 2003 and came into effect on 1 March 2004.7 7

2. Arbitration Law

The new Japanese Arbitration Law has ten chapters. Eight of these are given titles corresponding to those of the UNCITRAL Model Law. A number of the Model Law provisions are split into two or more sections and sometimes moved to different chapters. The two chapters not derived from the Model Law and the Supplemental Provisions deal with fees and expenses, penal sanctions and the effect of arbitration agreements in consumer and employment contracts. [Page726:]

Law, the author lists below those Model Law provisions that have been taken up in the Arbitration Law without significant change.

Provision

UNCITRAL

Japanese Model Law

Arbitration Law

Waiver of right to object Article 4

Article 27 Intervention by courts

Article 5

Article 4 Interim measures8

Articles 9, 17

Articles 15, 24 Number of arbitrators9

Article 10

Article 16 Appointment of arbitrators10

Article 11

Article 17 Challenge11

Articles 12-15

Articles 18-22 Tribunal's ruling on its own

Article 16

Article 23 jurisdiction (Kompetenz-Kompetenz) Equal treatment of parties

Article 18

Article 25 Freedom to determine rules

Article 19

Article 26 of procedure Place of arbitration

Article 20

Article 28 Language

Article 22

Article 30 Timing of parties' statements

Article 23

Article 31 Hearing and written proceedings

Article 24

Article 32 Default of a party

Article 25

Article 33 Expert appointed by tribunal

Article 26

Article 34 Form and content of award

Article 31

Article 39 Termination of proceedings

Article 32

Article 40 Correction, interpretation of award;

Articles 33-34

Articles 41-44 additional award; annulment12 Recognition and enforcement

Articles 35-36

Articles 45-46 of [Page727:] award13

In the following paragraphs the changes and additions made to the Model Law by the Arbitration Law will be described. Technical differences will be ignored14 and, as this is no more than a general overview, the explanations and qualifications may be insufficient in places.

Scope of application: place of arbitration, public arbitration, arbitrability

Unlike the UNCITRAL Model Law, the Japanese Arbitration Law applies to both domestic and international arbitration, so there is no provision restricting its application to international commercial arbitration or a lengthy definition of the term 'international', as in the Model Law. Instead, the scope of application of the Arbitration Law is delineated as follows in Article 1: 15

Arbitral proceedings where the place of arbitration is in Japan and court proceedings relating to such arbitral proceedings shall be governed by this law and what may be provided for in other laws or regulations.

The Arbitration Law does not apply to arbitrations where the place of arbitration is in another country, except in the case of applications for the dismissal of a court action or interim measures (Arts. 14(1) and 15).

Three important points should be noted. First, like the Model Law and various other national laws, the Japanese Arbitration Law does not define the place of arbitration. While assuming that it will usually be the place where the arbitral proceedings occur, 16 the Arbitration Law nevertheless allows the parties to choose their place of arbitration17and in so doing permits 'forum shopping'. Although, according to the drafters of the Arbitration Law, the place of arbitration is notional, it can be expected to be useful for determining the law governing the arbitral proceedings and the jurisdiction of courts. 18

Second, the 'other laws' referred to in Article 1 of the Arbitration Law are apparently the construction industry law, the law adjusting labour relations and the[Page728:]

law relating to the settlement of pollution disputes, which provide for government-funded arbitration. 19 The expression does not appear to mean other laws that might be thought to qualify the Arbitration Law.

Third, while Article 1(5) of the UNCITRAL Model Law allows a wide range of matters to be submitted to arbitration, the Japanese Arbitration Law (Art. 13) states that, unless otherwise provided by law, arbitration agreements are valid 'only where the object is a civil dispute (excluding divorce and separation) which may be settled by the parties'. Under the 1890 law, only arbitration agreements relating to disputes where the parties had the right to settle were valid. 20 A similar condition is found in the 1989 German law with respect to non-property claims. 21 In Japan, when the Second Draft was debated, views were expressed in favour of making any matter arbitrable unless contrary to a mandatory law, given that the tendency elsewhere in the world was to treat even competition and intellectual property law issues as arbitrable under certain conditions. Also, the expression 'having the right to settle' in the 1890 law was criticized as being difficult for laypersons to understand and there were calls for simpler language. However, the phrase nonetheless adopted in the Second Draft was 'right or legal relation which the parties may legally decide', 22 while the law itself took a more traditional approach by using the formulation quoted above. 23

Definitions

Unlike the UNCITRAL Model Law, the Japanese Arbitration Law does not define arbitration. It does, however, include a definition of arbitration agreement, which, in Article 2, is described as an agreement of the parties to refer the resolution of an already existing or future civil dispute fully or partly to one or more arbitrators and to abide by their award. It has been said that this definition implicitly defines arbitration. 24

Written communications

Communications are to be sent, and also mentions that when the current address cannot be verified, communications are effective if evidence can be[Page729:]

shown that an attempt at dispatch has been made, for instance by registered mail to the last known address (Art. 12(5)). 25 Article 12(2) allows the court to serve notifications on behalf of the parties in certain circumstances.

Extent of court intervention

Although the provisions of the UNCITRAL Model Law and the Japanese Arbitration Law relating to intervention by courts are substantially the same, they are mentioned here because of the importance in Japan of guarding against undue intervention by courts-not that courts have a tendency to intervene, but some people outside the courts, forgetful of the fact that arbitration was developed by merchants rather than States, mistakenly regard arbitration as a simplified civil procedure over which the State should have control and are suspicious of a method of dispute resolution that is conducted exclusively by private citizens such as lawyers, businessmen and engineers. This wariness was reflected in Article 4 of the First Draft, which stated that matters not provided for in the arbitration law should be dealt with as in civil procedure. Happily, Japanese arbitration law is no longer part of the Code of Civil Procedure, and Article 4 of the First Draft was dropped in the Second Draft. As finally adopted, Article 4 provides that courts may exercise their authority with respect to arbitration proceedings only where so provided in the Arbitration Law.

Courts performing specific functions

The UNCITRAL Model Law requires States to specify which courts perform supportive or supervisory functions. In the case of Japan, they are specified as follows in Article 5 of the Arbitration Law:

1.the district court designated by the agreement of the parties,

2.the district court in whose jurisdiction the place of arbitration is situated (where the place of arbitration lies within the jurisdiction of a single district court), or

3.the district court having ordinary jurisdiction over the respondent (for instance, on the basis of its domicile or principal office).

If more than one court is competent, the court with which request was filed first will perform the supportive and supervisory functions. [Page730:]

for optional oral hearings, appeals against court decisions, court involvement before the place of arbitration has been determined26 and inspection of court records (Arts. 6-9); application of the Code of Civil Procedure where courts perform certain functions (Art. 10) 27 or the Supreme Court Rules relating to proceedings performed by the court (Art.11). It should be kept in mind that the rationale behind Article 5 of the UNCITRAL Model Law and Article 4 of the Japanese Arbitration Law is to keep the involvement of the courts to a minimum and to ensure a strict interpretation of whether certain provisions are mandatory.

Arbitration agreement

As explained above, Article 13 of the Japanese Arbitration Law defines the substance of a valid agreement to arbitrate. As to the form of the agreement, the UNCITRAL Working Group had already agreed, at the time the Arbitration Law was enacted, that the Model Law requirement that it be in writing needed revision and had agreed on revised wording. Reflecting UNCITRAL deliberations, the Japanese Arbitration Law recognizes the validity of an arbitration agreement in electromagnetic form-i.e. produced by electronic, magnetic or any other data-processing means that are imperceptible to our natural senses (Art. 13(4)).

refer the matter to arbitration, provided certain conditions are met (Art. 8). The Japanese Arbitration Law, on the other hand, would require the action to be dismissed for lack of any means of implementing the order to arbitrate. 28[Page731:]

Interruption of limitation period

The Japanese Arbitration Law has added a paragraph to Article 21 of the UNCITRAL Model Law, in which the date of commencement of arbitral proceedings is defined. This addition states that a claim made in arbitral proceedings shall have the effect of interrupting the limitation period, except where the arbitral proceedings do not end with an arbitral award (Art. 29(2)). 29

Direct application of governing law

Both the UNCITRAL Model Law (Art. 28) and the Japanese Arbitration Law (Art. 36) require that the rules of law chosen by the parties be applied. If the parties have not indicated their choice, the Arbitration Law provides that the substantive law of the State with which the dispute is most closely connected shall be applied (Art. 36(2)). This is an improvement over the UNCITRAL Model Law, which opts for the roundabout method of determining the applicable law through the conflict-of-law rules of the tribunal's choice. However, it remains to be considered whether the application of the law to both cross-border and domestic transactions will cause a problem and whether the parties may choose the law governing property matters. The Arbitration Law uses the term 'law' rather than 'rules of law', although the commentary by the drafters of the law states that 'law' here is synonymous with the 'rules of law' of Article 28 of the Model Law. This is unnecessarily misleading: the expression 'rules of law' should have been used due to the wider meaning it has in the Model Law. 30

Presiding arbitrator

Unlike the UNCITRAL Model Law, the Japanese Arbitration Law requires arbitrators to appoint a presiding arbitrator (Art. 37).

Settlement (Arb-Med)

Article 30 of the UNCITRAL Model Law prompted the enactment of the first three paragraphs of Article 38 of the Japanese Arbitration Law, which provide that the arbitral tribunal may make a ruling on agreed terms, if requested by the parties, that such ruling will have the effect of an arbitral award, and shall be made in writing and state that it is an arbitral award. The Arbitration Law goes a step further by adding in the fourth paragraph that the arbitral tribunal, or one or more arbitrators appointed by it, may, with the parties' consent, attempt a settlement. [Page732:]

Naturally, this must be construed as permitting an attempt at settlement any number of times during the arbitral proceedings. Such a technique may be called chûchô or Arb-Med. 31 A settlement may be recorded as an award or in another form such as a settlement agreement. It has been commented that this provision reflects the fact that settlement is frequent in the practice of arbitration in Japan, but that the conditions of the tribunal's involvement are unclear and need clarifying. 32

The Japanese Arbitration Law also contains the following provisions, which are not in the UNCITRAL Model Law.

Remuneration of arbitrators

In the absence of agreement between the parties, the arbitral tribunal fixes at a reasonable level the fees of the arbitrators and a deposit to cover the costs of the arbitration (Arts. 47 and 48 ). If the deposit is not paid, the tribunal may suspend or terminate the proceedings. The costs of the arbitration are borne by the party that paid them if the parties have not agreed how they shall be shared. The tribunal may decide how they shall be shared if the parties agree on its doing so (Art. 49). The Arbitration Law does not define the costs of the arbitration.

Bribery

Penalties are prescribed for arbitrators, or persons who agree to act or have acted as arbitrators, if they demand, accept or agree to accept a bribe, or cause bribery to a third person, or take or fail to take action because of bribery (Arts. 50-52). A briber who is not an arbitrator is also punishable (Art. 54). These provisions were previously in the Penal Code, alongside provisions on the bribery of public officials. 33 The part applicable to arbitration was transferred from the Penal Code to the Arbitration Law, which adds that these provisions are applicable to offences committed abroad (Art. 55). However, the penal provisions of the Arbitration Law are optional, for if a foreign city is chosen as the (notional) place of arbitration the Japanese arbitration law becomes inapplicable.

Consumer and labour-related agreements

Two supplementary-and temporary ('for the time being')-provisions are worthy of note: consumers are permitted to rescind arbitration agreements, and arbitration agreements relating to work conditions and individual labour-related disputes are void (Supplemental Provisions, Arts. 3 and 4). [Page733:]

3. ADR Law

In December 2001, the Office for the Promotion of Justice Reform set up an ADR study group, known as Kentôkai. During its chequered existence, the group held numerous meetings but was dogged by difficulties and much mean-dering. 34 Materials produced in July 2003 after twenty sessions of work and the receipt of outside comments were marked by a lack of clarity in the basic concepts used and a disregard of situations that should have been given atten-tion. 35 Many individuals and organizations filed opinions against the proposed accreditation system, and within the group views were sharply divided. Against this background, the group officially shut up shop in January 2004, but the work was resumed three months later by those who were determined to prepare a bill. 36 The bill was made public in October 2004 and, with little further change, became law before the end of the year.

The long title of the law is: Saibangai Funsô Kaiketsu Tetsuzuki no Riyô no Sokushin ni kansuru Hôritsu (Law on Promotion of the Use of Dispute Resolution Processes outside Courts). 37 The first three chapters cover general provisions (chapter one), services offered by accredited dispute resolution processes (chapter two) and exceptions to the use of those processes (chapter three). 38 Article 1 of the law contains the expression 'dispute resolution processes outside courts' (saibangai funsô kaiketsu tetsuzuki), covering all types of dispute resolution mechanisms, including arbitration and mediation. However, the only part of the law applying to arbitration is the short first chapter (Arts. 1-4) setting forth general principles of ADR and the State's responsibility to make ADR better understood. 39 The longer three following chapters (Arts. 5-27) apply to mediation and all types of ADR other than arbitration.

The expression 'dispute resolution process outside courts' is defined as a process whereby, at the request of the parties and on the basis of a contract with them, [Page734:]

a private service provider helps in the settlement of a civil dispute over which the parties are entitled to settle (Art. 2). Logically, this should include settlement tried in the course of arbitration, which is a feature of the 2004 Japanese Arbitration Law. 40 This is not the case, however, because chapter two, as mentioned above, is regarded as not applying to arbitration.41 The terms tetsuzuki jisshisha (person administering the process), ninshô funsô kaiketsu tetsuzuki (accredited dispute resolution process) and ninshô funsô kaiketsu jigyôsha (accredited dispute resolution process provider) do not denote arbitrators or arbitration. The term tetsuzuki jisshisha would normally mean mediators or conciliators, and ninshô funsô kaiketsu jigyôsha accredited mediators. 42

Most of the rest of the ADR law concerns accreditation by the Government. Article 5 states that providers of private dispute resolution processes may be accredited by the Minister of Justice.

There is no obligation to obtain such accreditation, and mediation without accreditation is not necessarily illegal.43 It would therefore not be illegal under this law for the International Chamber of Commerce (ICC) to offer its ADR services in Japan.

The creation of a category of accredited mediators as distinct from nonaccredited mediators is rather like classifying doctors into licensed physicians and folk healers. In a country like Japan, where officialdom is traditionally exalted, accreditation will carry considerable weight and have legal effects. 44 Commencement of accredited mediation could interrupt the running of the limitation period. If the mediator finds that mediation will not succeed and terminates accredited mediation and if, within a month of notice of such termination, the parties commence litigation, the litigation will be deemed to have commenced at the time of the request for the accredited dispute resolution process, i.e. the mediation (Art. 25). In certain cases, accredited mediation could be a reason for suspending litigation (Art. 26).

Natural persons or corporate bodies wishing to be providers of accredited dispute resolution processes must satisfy sixteen requirements (Art. 6). Amongst other[Page735:]

things, the process must be administered by a suitable individual; if that person is not an attorney licensed to practice in Japan (bengoshi), then access to a bengoshi must generally be ensured (Art. 6(5)). Service providers must have rules on the conduct of the proceedings.

The law contains various provisions allowing the government to protect people from possible harm resulting from the use of non-governmental service-providers. Applications for accreditation must be accompanied by various documents including a list of the applicant's property evidencing that the applicant is financially sound (Art. 8(2)4). Accredited mediators must keep records of the cases they handle and other details as might be required by the Ministry of Justice (Arts. 16.4, 16.6). If the Ministry of Justice has good reason to believe that an accredited dispute resolution service provider no longer has the necessary knowledge or financial strength, it may have its officials enter the office of the service-provider, inspect its books and records and question it 'to the extent necessary to ensure the sound operation of the accredited dispute resolution service' (Art. 21).

The ADR law reflects above all the paternalism of a State that believes it needs to protect its people from the as yet unfelt but potential harm from undesirable non-governmental mediation. Those aspiring to the status of accredited suppliers of out-of-court dispute resolution services could have a long wait before them, for the law will not become effective until a later date within two-and-a-half years of the promulgation of the ADR Law. That date will be specified by a Cabinet order. 45

4. Attorneys Law

As the legislative work on the Arbitration Law and the ADR Law progressed in the early years of the twenty-first century, the spotlight turned to Article 72 of the 1949 Attorneys Law, which provides as follows: 46[Page736:]

Persons who are not bengoshi or bengoshi juridical persons, as a business, may not as to . . . and other general legal matters, for the purpose of receiving compensation, deal with legal advice, representation, arbitration or settlement or other legal work, or lend good offices, provided that the foregoing does not apply where there is a provision to the contrary in this or another law.

This is not a statute to exclude foreigners, but rather to exclude persons who are not bengoshi. The phrase 'as a business' does not necessarily require the continuous handling of many cases. 47 In some circumstances it may be justified to regard the handling of even one case as a business. As the Supreme Court observed, the act performed must be of a business character and must be undertaken with the intention of being repeated even if it is not actually repeated. 48

The Attorneys Law originally provided for an exception allowing foreign lawyers specially authorized by the Supreme Court to practise. This exception was removed in 1955. 49 When the ADR Law takes effect, it will be possible for non-lawyers to be accredited as mediators. However, this is not an exception recognized by the Attorneys Law. It is worth noting that Japan has a long and fine tradition of non-bengoshi mediation, particularly in domestic cases conducted under mediation laws.

Who then may act as an arbitrator or mediator or represent a party or give opinions?

According to Articles 3 and 72 of the Attorneys Law, a bengoshi may act as an arbitrator or mediator, represent a party in arbitration and mediation, and give opinions. A gaikokuhô jimu bengoshi (foreign law attorney) may practise the law of the country where he or she originally qualified to practise (genshi-kakukoku-hô) or a designated foreign law (tokutei gaikokuhô). 50 The Foreign Attorneys Law does not say whether a gaikokuhô jimu bengoshi may act as an[Page737:]

arbitrator, and the argument that this is not permitted is not untenable. It does, however, provide that a gaikokuhô jimu bengoshi may represent a party in arbitration if the arbitration is international (Art. 5-3). The expression 'international arbitration case' here means an arbitration on private law matters where the place of arbitration is in Japan and all or some of the parties have their domicile or principal place of business or head office in a another country (Art. 2.11). Cases relating to Japanese competition law and cases between, for instance, the Japanese subsidiary of a foreign corporation and a foreigner domiciled in Japan would not qualify as international arbitration cases even if the place of arbitration were in Japan. Although the Foreign Attorneys Law does not say that a gaikokuhô jimu bengoshi may mediate, any person may act as a mediator if accredited to do so under the ADR Law when it comes into force. 51 A gaikokuhô jimu bengoshi may represent a party in a mediation that takes place as part of an international arbitration (Art. 5-3). It is lawful for a gaikokuhô jimu bengoshi to give advice on the laws of the country where he or she originally qualified to practise or on a designated foreign law accredited by the Minister of Justice (Arts. 3(1), 5, 16). However, it would be illegal to express views on laws other than those, such as a treaty or international customary law that does not form part of the designated foreign law or the law of the country where the primary qualification was obtained.

The activities of foreign lawyers who do not have the status of a gaikokuhô jimu bengoshi are more restricted. Although the Attorneys Law does not allow them to be arbitrators, the Foreign Attorneys Law provides that a foreign lawyer who is not employed in Japan may represent a party in international arbitration if asked to do so in a foreign country and if such appointment was accepted in the foreign country (Art. 58-2). As far as mediation is concerned, a foreign lawyer is in the same position as a gaikokuhô jimu bengoshi, except that the law permitting a gaikokuhô jimu bengoshi to engage in mediation in connection with an international arbitration case does not apply to foreign lawyers. When it comes to offering legal advice, the Attorneys Law considers this as work separate from arbitration or mediation. Although the law is silent on legal advice by foreign lawyers, it would be impractical and unreasonable to prohibit them from giving advice even when they are allowed to represent a party.

Most restricted of all are those who are neither bengoshi, gaikokuhô jimu bengoshi or foreign lawyers without the status of a gaikokuhô jimu bengoshi. Many businessmen and university professors have in the past acted as arbitrators, or even counsel, and rendered opinions. The illegality of their activity was[Page738:]

condoned until the enactment of the Arbitration and ADR Laws shook sleeping dogs from their slumber. However, the public has shown little interest in the issue and many lawyers seem to feel it is best to let sleeping dogs lie. At the present time, two theories justify maintaining the status quo. First, it is held that a customary law permitting non-bengoshi to act as arbitrators has been formed as a result of acquiescence over many years. This is debatable. Illegality might have been condoned simply due to the scarcity of cases. Second, some feel that although arbitration by non-bengoshi violates Article 72 of the Attorneys Law, it is an activity justified under Article 35 of the Penal Code, which provides that 'an act done as justifiable business' is not punishable. The kind of situation envisaged by the Penal Code here is when violence becomes justified in sport such as boxing. When it comes to applying such reasoning to the illegality of non-begoshi arbitration, distinctions need to be made. For instance, arbitration by a company executive with a good basic legal background who could see things from a broad perspective based on long business experience may be justified, but not by an erudite and experienced lawyer steeped in legal procedure that departs from the true tradition of arbitration as a personal art and a simple procedure.

While the ADR Law provides for a system of accreditation to enable nonbengoshi lawfully to conduct mediation, no similar system exists for arbitration. In response to the question of whether non-bengoshi may nevertheless arbitrate, raised by Mrs T. Hamayotsu in the Judicial Affairs Committee of the House of Councillors, Usio Yamazaki, Secretary General of the Office for the Promotion of Justice Reform, replied:

As you point out, Article 72 of the Attorneys Law prohibits non-lawyers from engaging in arbitration as paid business unless otherwise provided in another law. Regarding this 'another law', the Arbitration Law, which was given your [the Diet's] approval last year, has come into force. The first point is that this Arbitration Law contains detailed provisions, including mandatory law, and it can be said that acts performed by arbitrators are based on that law. The other point is that the Arbitration Law does not lay down any particular restriction with respect to the qualification of arbitrators and . . . permits any person to be appointed as an arbitrator, subject to having the required abilities and aptitude, unless the parties have agreed otherwise. In addition, arbitrators are allowed to receive fair compensation. Accordingly, it is safe to conclude that arbitration that is in conformity with the Arbitration Law, as a rule, leads to a result which does not violate Article 72 of the Attorneys Law. 52[Page739:]

This statement carries some weight, as it comes from the head of the office responsible for preparing the Arbitration and ADR Laws, but it is not a judicial pronouncement and does not say that an exception was positively created by the Arbitration Law, although the Attorneys Law allows for the creation of an exception by another law. The statement does not convincingly back up the view that any person can be an arbitrator.

It is, however, unlikely-save unusual circumstances-that the State of a bar association would bring a charge against a good businessman, professor or foreign lawyer who has acted as an arbitrator or rendered Arb-Med services.

The enactment of the Arbitration and ADR Laws has led various non-legal professionals such as judicial scriveners and patent attorneys to seek the right of representation in arbitration or mediation through amendments to the individual laws governing each of these professions. 53

5. Concluding remarks

As society and transactions became increasingly complex, it was felt necessary not only to improve administrative control and coordination, but also to reform the means of achieving peace by law. To this end, the Japanese Government established the Justice System Reform Council in 1999 and in June 2001 the Council drew up its Final Recommendation. In November of that year, a law promoting justice reform was enacted (Shihô Seido Kaikaku Suishinhô) and a special office set up for this purpose, whose task was to prepare various bills reforming the law within three years. These reforms aimed to improve the quality of justice, in particular by reducing the time taken for cases to be dealt with, expand the legal population, and increase the involvement of laypersons in the decision-making process. The results of these reforms included a law requiring first instance proceedings to be concluded within two years, a law creating new law schools to increase the number of lawyers and provide students with more practical training, and the creation of a system whereby people picked at random from electoral registers are required to work with judges in the determination of facts and sentencing in felony cases. Alongside these changes, new arbitration and ADR laws had to be drawn up to promote dispute resolution outside courts. [Page740:]

After three years, Japan came to have a new Arbitration Law, which in large part follows the UNCITRAL Model Law on International Commercial Arbitration, an ADR Law, and the fifty-year-old Article 72 of the Attorneys Law with little record of enforcement in respect of arbitration and ADR. The Japan Commercial Arbitration Association, the Japan Shipping Exchange and various arbitration centres continue to handle a limited number of cases. The new Japan Association of Arbitrators is, among other things, engaged in academic research and the training of arbitrators and mediators.

What is the outlook? The Japanese are traditionally non-litigious and have not felt any particular need for dispute resolution schemes other than negotiation and litigation. Nonetheless, people would not deny that it is good to have a rich selection of dispute resolution methods from which to choose, and in many of the countries with which Japan trades, arbitration and ADR are flourishing, notwithstanding the increasing judicialization of arbitration. Japan is thus compelled to make good use of diverse dispute resolution methods. Although the preference is towards government-sponsored dispute resolution, a growth in private-sector arbitration and ADR can be expected, albeit in anything other than a grand manner. [Page741:]

1
T. Sawada, UNCITRAL Kokusai Shôji Chûsai Mohanhô (Kaitei) [Article-by-Article Commentary on the UNCITRAL Model Law on International Commercial Arbitration) (Revised)] (1986) at 1-3. The author was a delegate to UNCITRAL when it decided to prepare a model law and Japan's representative at the plenary session that adopted the Model Law.

2
Law 29 of 1890.

3
T. Kitagawa, Kokusai Shôji Chûsai no Kenkyû [Study of International Commercial Arbitration] (1978). This is a posthumous collection of his principal papers.

4
The First Draft, with translations into German and French and commentaries by eleven members of the study group, may be found in Chûsai Kenkyûkai (T. Kikui, rep.), Chûsaihô no Rippôronteki Kenkyû Tokyo: Shôji Hômu Kenkyûkai, 1990).

5
Chûsai Kenkyûkai (A. Takakuwa, rep.), Chûsaihôshian 2001 nen Kaitei (2002).

6
For an explanation of the proposals by the cabinet body, see M. Kondô, Chûsaiho kaisei no Kongo no Tenbô (Tokyo: Shôji Hômu Kenkyûkai, 2002) at 3.

7
Law 138 of 2003. For commentaries of the law see M. Kondô et al., Chûsaihô Kommentâru (Tokyo: ShôjiHômu, 2003), Kojima & Takakuwa, eds., Chûsaihô (Tokyo: Seirin Shoin [forthcoming]); H. Oda, 'Arbitration Reform in Japan' (2004) 15.1

8
Change possible, subject to the pending revision of the Model Law by UNCITRAL.

9
The Arbitration Law authorizes the court to decide the number of arbitrators if there are three or more parties and they have not reached agreement on this matter.

10
The decision appointing an arbitrator is final.

11
The Arbitration Law adds death as a cause of termination of the arbitrator's mandate.

12
Unlike Article 33 of the Model Law, Article 41 of the Arbitration Law does not impose a thirty-day time limit for correction and interpretation.

13
An arbitral award has the same effect as a final and conclusive judgment irrespective of the place of arbitration. To enforce an award, an enforcing decision (shikkô kettei), as opposed to a judgment, is sufficient. ICC ICCArb. Bull. 23

14
e.g. no mention will be made of the additional provision in the Arbitration Law (Article 19(4)), according to which a court shall make a decision (kettei) rather than a judgment if it believes there is a ground for challenge. Technical and editorial changes can nevertheless be important. The provisions listed in the table above are not exactly identical. Readers are advised to consult the statutes and a more detailed commentary.

15
See also Article 3 of the Law for details on scope of application.

16
M.Kondô et al., supra note 7 at 152.

17
Article 28, corresponding to Article 20 of the UNCITRAL Model Law.

18
M. Kondô et al., supra note 7 at 8.

19
Non-governmental arbitration is insufficiently funded in Japan and has been overshadowed by governmental or administrative arbitration.

20
Article 786.

21
Zivilprozessordnung, § 1030.

22
Supra note 5 at 25.

23
The Arbitration Law applies to non-commercial as well as commercial disputes, although disputes over parentage cannot be resolved by arbitration; see M. Kondô et al., supra note 7 at 46).

24
M. Kondô et al., supra note 7 at 6.

25
Arbitral institutions and tribunals often send certified originals by registered mail or by courier service.

26
Pursuant to Article 8 of the arbitration law, the provisions of Article 17(2) through (5) could be applied if the place of arbitration has not yet been fixed but is likely to be in Japan and provided a Japanese court has ordinary jurisdiction over the respondent.

27
Service by the court (Art. 12(2)), determination of the number of arbitrators or appointment of an arbitrator failing agreement by the parties agreement (Art. 16(3), Art. 17(2)(3)(4)(5)), decisions on the challenge or discharge of an arbitrator (Arts. 19(4), 20); jurisdiction of the arbitral tribunal (Art. 23(5)); Court assistance in taking evidence (Art. 35(1)(3)(4)(5)). The tribunal or, with leave of the tribunal, a party may request evidence to be taken by such methods as examination of witnesses, expert determination, examination of documents and inspection.); setting aside and enforcement of arbitral awards (Arts. 44, 46).

28
M. Kondô et al., supra note 7 at 56.

29
e.g. by settlement between the parties, as mentioned in Art. 40(2)3 of the Arbitration Law.

30
T. Sawada, supra note 1 at 39-41.

31
T. Sawada, 'Hybrid Arb-Med: Will West and East never Meet?' (2003) 14:2 ICC ICArb. Bull. 29.

32
M. Kondô et al., supra note 7 at 211.

33
Keihô [Penal Law] of 1907, Arts.197-198, amended when the Arbitration Law came into force.

34
See Nichibenren Shinbun, No. 366, 1 July 2004.

35
See Shihô Seido Kaikaku Suishin Honbu Jimukyoku, Sôgô teki na ADR no Seido Kiban no Seibi ni tsuite [On Constructing the Basis of an ADR System] (July 2003). There were attempts to introduce greater regulation into dispute resolution (point 4), which went against the world trend towards deregulation. Also, the creation of a single law to cover the various kinds of ADR (including arbitration) proved difficult. The definition of individuals was limited to organizations (point 5), and little thought appeared to have been given to ad hoc or institutional arbitration, or mediation in cross-border disputes.

36
See Nichibenren News, No. 54, 27 April 2004.

37
Law 151 of 2004.

38
Two further chapters cover miscellaneous (Articles 28-31) and penal (Articles 32-34) provisions and are followed by supplemental provisions.

39
The law mentions that the State shall pursue this aim through research into and analysis of domestic and overseas developments, the dissemination of information and any other relevant measures.

40
Article 38(4); see pp. 732-33, above.

41
Another phrase that causes concern is found in Article 3, where it is stated that 'dispute resolution processes outside courts' are processes for resolving disputes 'by law'. This would appear to exclude arbitration ex aequo et bono. Defending the draft, Mr. T. Kobayashi of the Office for the Promotion of Judicial Reform, argued that 'by law' here simply means 'lawfully' (Minutes of the 36th meeting of the ADR Study Group, 1 September 2004).

42
The terms are defined in Article 2 of the law.

43
Whether it would constitute a violation of the law on attorneys is another matter, which will be discussed below.

44
Whether or not the successful outcome of accredited mediation should be recognized as judicially enforceable was hotly debated during the life of the ADR study group, but the question was eventually left unanswered.

45
Supplemental Provisions, Art. 1.

46
The original uses the following terms: bengoshi (noun, sing. or pl.)-attorney(s), Japanese or non-Japanese, fully licensed to practise Japanese law bengoshi hôjin (noun)-bengoshi juridical person(s) gaikoku bengoshi (noun)-foreign attorney(s) gaikokuhô jimu bengoshi (noun)-foreign law attorney(s); foreign law clerical attorney(s) ippan no hôritsu jiken (noun)-general legal matters hôritsu jimu (noun)-legal work toriatsukau (verb)-deal with, manage, carry on, transact, handle kantei suru (verb)-give legal advice; render legal opinion shûsen suru (verb)-render (lend) good offices

47
See Nihon Bengoshi Rengôkai Chôsashitsu, Jôkai Bengoshi-Hô [Attorneys Law Article-by-Article Commentary], 3d ed. (2003) at 691.

48
(1975) 29:4 Minshû 317. The law prohibits 'legal work' on 'legal matters'. In deciding whether an act is of a legal nature, it should be borne in mind that work regarded as of a non-legal nature in one country may qualify as legal work under the Attorneys Law. Care should be taken over the nature and characterization of good offices, mediation and conciliation.

49
Article 7 of the original Attorneys Law, deleted by Law 155 of 1955.

50
See the 1986 Law on Special Measures concerning the Handling of Legal Work by Foreign Attorneys (Gaikoku Bengoshi ni yoru Hôritsu Jimu no Toriatsukai ni kansuru Tokubetsusochi Hô) [hereinafter 'Foreign Attorneys Law'], Arts. 1, 3, 5, 16.

51
See part 3, above.

52
Record of the deliberations of the Judicial Affairs Committee of the House of Councillors, 18 Nov. 2004.

53
e.g. shihô shoshi (judicial scriveners), benrishi (patent attorneys), shakaihoken rômushi (social insurance consultants), Tochi-kaoku chôsashi (land and house investigators), zeirishi (tax accountants), fudôsan kanteishi (real estate appraisers), gyôsei shoshi (administrative scriveners). Some seek representation in arbitration and other in mediation or ADR cases.