Yoshie Midorikawa is a partner at Miura & Partners and shares her insights on the Japanese ADR landscape. What are the next developments for this year?
We would like to know more about the attitudes of Japanese lawyers towards dispute resolution. Alternative dispute resolution (ADR), is growing in popularity to counter court litigation.
Most legal disputes between Japanese companies were resolved by private settlements or before Japanese courts. The Japanese have moved from Japanese courts to international arbitration due to the growing number of companies doing business internationally. Japanese courts require that parties present their case in Japanese in litigation. This becomes a problem when Japanese companies want to resolve disputes in international contracts with foreign business partners.
Arbitration might be an option for international dispute resolution. This is due to the absence of a global mechanism that enforces foreign judgments. I am pleased to see that Japanese companies are taking ADR and international arbitration more seriously.
Is there any legislation or changes that have affected the launching Japan International Dispute Resolution Centre’s (JIDRC), or the launching of JIDRC?
In 2018, the JIDRC was established as Japan’s first organization for international arbitration. It was difficult for Japanese parties to arbitration to find a suitable place to hold hearings or other conferences before the JIDRC was launched. The JIDRC provides a state of the art experience in dispute resolution and streamlines hearings online and in person.
Japan has a long history of choosing litigation for dispute resolution. However, as we have already mentioned, arbitration is often preferred by Japanese parties due to the enforceability and validity of New York Convention awards. While Japan is not often chosen to be the seat of arbitration, more Japanese companies are realizing the benefits of having disputes resolved in their own country. Since 2017, the Japanese government has supported the promotion of Japanese arbitration. The government also supported the establishment of JIDRC.
Could you tell us a bit about civil conciliation as a means of resolving disputes? What is its relationship to mediation and arbitration?
minji is a procedure for resolving disputes. It differs from mediation, which is a private process that is handled by a neutral third party and does not involve the state. Japanese law requires that civil conciliation be conducted in a court proceeding. Civil conciliation is similar to mediation in that it seeks to settle disputes privately by the agreement of the parties.
I have noticed that Japanese companies are taking ADR and international arbitration more seriously.
Although Japanese litigation procedures can be lengthy, Japanese companies often choose litigation to resolve disputes. This is likely because there is trust in the court process, and the court will encourage settlements. Japanese companies are more interested in civil conciliation than the court, as it seeks to settle the matter in a closed-door process.
It is not uncommon for parties to file pleadings more than once in litigation. In some cases, where the legal or factual issues can be complex, it could take many years before the court makes a decision at the court of first instance. This is not necessary for civil conciliation. It allows for a more flexible resolution to the dispute.
Are you a career expert in this field? Do you have any information?
Our team has been involved in many complex cases, including large-scale and high-stakes ones, such as energy-related investments, accounting fraud, and information technology services. These cases often require not only legal arguments, but also fact-finding and supporting evidence. Understanding the business practices and business models of other industries is crucial in order to extract meaningful facts from complex events. This is not an easy task as each case will require a different understanding of the industry, including the construction industry and the information technology industry.
In a complex dispute regarding oil field development, which I handled as a junior associate, the client’s manager told me that I knew more about the facts than he, despite being in charge of the project. While it was difficult to reconstruct and present the case to the decision-makers in the dispute resolution process, it was rewarding when I did it correctly. In doing my job, I have always followed the “Understand your case better than your customer” principle.
What do you think the future prospects for dispute resolution in your jurisdiction will look like in 2023?
Japan’s civil litigation process is largely done offline. Online hearings are not possible because lawyers must still file cases by hand or post. COVID-19 placed temporary restrictions on the routine of court proceedings in 2020, which caused a temporary halt to court proceedings. Court proceedings have resumed normality after this crisis, and the Diet also passed a bill in 2022 to amend the Code of Civil Procedure to meet the demand for civil litigation procedures that can be conducted online. In a few stages, the reform of the relevant legislation will be completed. This will allow, among others, for online submissions of documents and online hearings of witnesses in Japanese litigation. This reform will be in part implemented on March 1, 2023.
A bill to amend the Arbitration Law to align it with UNCITRAL Model Law on International Commercial Arbitration (2006) will also be submitted to this year’s Diet. It will also bring it in line to the Singapore Convention which grants enforceability to settlements that are based on a certain level of mediation. Practically, the Tokyo ‘business court’ was established in 2022 to deal with international and business-related cases. It will be responsible for handling commercial, intellectual property and bankruptcy matters. The updated system should offer a smooth and effective process for resolving disputes domestically as well as internationally, given the increasing internationalization and digitization of the Japanese dispute resolution industry. As a Japanese court-appointed lawyer, I would like to be part this revolution.
Yoshie Midorikawa, Partner
3F East Tower Otemachi First Square 1-5-1, Otemachi, Chiyoda-ku, Tokyo 100-0004
Tel: +81-3-6270-3515
Fax: +81-3-6270-3501
Yoshie Miorikawa was acquitted of the Bar in Japan in 2007 as well as New York in 2015. Her expertise includes many areas, including litigation, alternative dispute resolution and corporate governance. She has also published extensively on Japanese law. Legal 500 Asia Pacific named her one of the Next Generation Partners in Japan in Dispute Resolution in 2023.
Miura & Partners is an independent Tokyo law firm that was founded in 2019. Its goal was to create a platform for business-minded and innovative professionals. Since then, the team has been involved in cutting-edge commercial disputes cases. Asian Legal Business listed Miura & Partners among the FAST 30: Asia’s fastest-growing law companies in 2021 and 2022.