Business

Japan’s first international arbitration center debuts in Osaka

JIJI

The Japan International Dispute Resolution Center, the nation’s first facility specializing in international arbitration to settle disputes involving businesses, has been established in Osaka.

The center began services May 1 under the management of an association formed by Osaka-based lawyers and arbitration experts in February to deal with disputes such as those between Japanese and foreign companies or between foreign companies from different nations.

International arbitration efforts are arranged under a treaty signed by some 160 countries. Decisions that are accepted by both disputing parties have the same force and effect as court rulings.

The center, dubbed JIDRC-Osaka, indirectly supports Japanese companies’ overseas business expansion through cuts in their arbitration-related times and costs, as their representatives no longer need to travel abroad to seek alternative dispute resolutions.

“The closer you have (such a center), the better you can prepare and fight,” an Osaka-based lawyer familiar with arbitration said. “You will no longer find yourself helpless in a faraway foreign country.”

International arbitration is increasing across the world, winning widespread support due to its neutrality, because disagreeing parties’ home countries can be avoided for the resolution process, for flexibility unbound by law and for the maintenance of confidentiality, because the negotiations are conducted behind closed doors.

In 2015, there were only two cases of international arbitration in Japan, according to the Paris-based International Chamber of Commerce. Other Asian cases numbered 35 in Singapore, 11 in Hong Kong and three each in India, South Korea and the Philippines.

The number of arbitration cases has been limited in Japan due to the absence of permanent facilities specializing in them.

Among other factors, experts cite a lack of understanding among businesses about the usefulness of arbitration, a shortage of personnel familiar with arbitration and insufficient publicity overseas.

JIDRC-Osaka is expected to handle not only business disputes but also arbitration involving doping and other sports-related cases as well as arbitration of disputes between investors and states.

The association of Osaka-based lawyers and arbitration experts plans to set up a center in Tokyo in time for the 2020 Olympics.

In addition, the association plans to hold seminars and other events to enhance public recognition of international arbitration and foster people familiar with the dispute-settlement means.

“I expect (JIDRC-Osaka) to spearhead challenging efforts to make Japan the core of international arbitrations in Asia,” Justice Minister Yoko Kamikawa said in a video message for the center’s opening ceremony in late April, which was attended by some 170 people.

The center has three conference rooms of different size, each with facilities such as booths for simultaneous interpretation in four languages.

As a tenant in a central government building in Fukushima Ward, Osaka, the center is able to hold down usage fees to as low as ¥5,000 to ¥50,000 for four hours.