The Arbitration Act (Act No. 138 of 1 August 2003) (the “Arbitration Act”) regulates both domestic and international arbitral procedures seated in Japan. On April 1, 2024, the Arbitration Act came into effect. This amendment was to incorporate changes adopted in UNCITRAL Model Law 2006.

In addition to the Arbitration Act, specific rules on court proceedings relating to arbitration are found in the Supreme Court Rules on Procedures of Arbitration-Related Cases (Rules of the Supreme Court No. 27 of 26 November 2003).

Arbitration is a dispute resolution mechanism based on the principle of party autonomy and therefore most matters relating to the conduct of arbitration may be agreed between the parties. However, as set forth in Article 26(1) of the Arbitration Act, there are provisions in the Arbitration Act under which agreements between the parties may not prevail based on public policy; these include, for example, equal treatment of all parties and rights to full opportunity for a party to present its case (Article 25 of the Arbitration Act).

Yes, Japan is a signatory to the New York Convention (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958) and reserves the principle of reciprocity.

Japan is a party to the Geneva Protocol on Arbitration Clauses 1923, the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

Japan is also a party to a number of bilateral treaties including provisions for recognition and enforcement of international arbitral awards, such as the Treaty of Friendship, Commerce and Navigation between Japan and the United States of America (1953), the Treaty of Commerce and Navigation between Japan and Great Britain (1962), Japan-China Trade Agreement (1974), and Japan Germany Commerce and Navigation Treaty (1982).

Furthermore, on April 1, 2024, Japan became a party to the UN Convention on International Settlement Agreements Resulting from Mediation (the “Singapore Convention”), although Singapore Convention relates to mediation.

Yes, the Arbitration Act is mostly based on the UNCITRAL Model Law 1985. However, it deviates from the model law for some matters, including special treatment of disputes relating to consumers or individual employees (Article 3 and Article 4 of the Supplementary Provisions to the Arbitration Act), and authority for arbitrators to assist settlement negotiations based on written agreement by all the parties (Article 38 of the Arbitration Act).

In addition, the Arbitration Act was amended to incorporate changes adopted in UNCITRAL Model Law 2006, and the amended Arbitration Act came into effect on April 1, 2024. The key parts of the amended Arbitration Act are as follows:

Interim measures

Major amendments were made to interim measures. Article 24 of the prior Arbitration Act provides an arbitral tribunal with broad discretion to order necessary interim measures, but it did not explicitly identify specific measures that the arbitral tribunal can render nor conditions for issuing such measures. The amended Arbitration Act clearly provides for five categories of interim measures as well as laying down conditions for ordering such measures.

In addition, the amended Arbitration Act sets out procedures and mechanisms to enforce the interim measures and provide limited grounds to refuse the enforcement. Under the amended Arbitration Act, the Japanese court is given the power to impose a penalty fee on a party that has breached or will likely breach certain types of interim measures (e.g. an interim measure ordered by an arbitral tribunal prohibiting disposition of property necessary for payment of monetary debt).

Requirement for arbitration agreement to be in writing

Under the prior Arbitration Act, there was some uncertainty as to when the “in writing” requirement is satisfied – for example, it is not clear whether a voice recording of an arbitration agreement is acceptable or not. Under Article 13(6) of the amended Arbitration Act, it becomes that an arbitration agreement is deemed to be made in writing where a non-written agreement between the parties refers to a document or electronic record which includes a clause of an arbitration agreement.

Procedures for arbitration-related cases

Under the Article 5(2) of the amended Arbitration Act, the Tokyo District Court or the Osaka District Court may exercise additional jurisdiction over cases pertaining to the procedures carried out by the court pursuant to the Arbitration Act if the seat of the arbitration is in Japan. The extra jurisdiction of those courts will be given in addition to the jurisdiction of the district courts provided by Article 5 (1) of the Arbitration Act, to further strengthen the arbitration related experience of the Tokyo and Osaka District Courts.

In addition, previously all documentary evidence needs to be translated into the Japanese language for arbitration related lawsuits before Japanese courts. Under Article 46 (2) of the amended Arbitration Act, this burden of translation will be mitigated and the court has a reasonable discretion to allow for submission of documentary evidence in its original language.

Major arbitral institutions in Japan and their latest arbitration rules are as follows:

• The Japan Commercial Arbitration Association (“JCAA”) – the Commercial Arbitration Rules 2021 (“JCAA Rules”), Interactive Arbitration Rules 2021, both effective July 1, 2021;
• The Japan Intellectual Property Arbitration Center – the Rules for Arbitral Proceedings last amended April 1, 2024;
• The International Arbitration Center in Tokyo – the IACT Arbitration Rules adopted on September 1, 2018 and the IACT Expedited Arbitration Rules adopted on February 12, 2024;
• Japan Sports Arbitration Agency (JSAA) – Sports Arbitration Rules last amended on November 1, 2023; and
• The Japan Shipping Exchange, Inc. (the Tokyo Maritime Arbitration Commission (TOMAC) – the Rules of Arbitration of Tokyo Maritime Arbitration Commission (TOMAC) of The Japan Shipping Exchange, Inc. effective on April 1, 2024.

JCAA is currently the leading arbitral institution in Japan. The Japan International Dispute Resolution Center (JIDRC) was established in February 2018 as an agency to contribute to the furthering of international arbitration and international mediation in Japan and is actively promoting international arbitration in Japan.

No, there is no special arbitration court in Japan.

The Definition of the Arbitration Agreement

For an arbitration agreement to be valid, it first needs to fall under the definition of arbitration agreement. Article 2(1) of the Arbitration Act, which provides that arbitration agreement means an agreement to refer to the resolution of all or part of civil disputes which have already arisen or which may arise in the future in respect of a certain legal relationship to one or more arbitrators, and to accept the award made therefor. As such, the parties must agree that one or more third parties will hear certain legal disputes and that the parties will accept a decision made by such third parties as final. It is not required that an arbitration agreement sets forth an arbitral institution (i.e. ad hoc arbitration is acceptable), governing law, or seat of arbitration.

Requirement of Arbitrability

Disputes subject to an arbitration agreement must be arbitrable. In this regard, Article 13(1) of the Arbitration Act provides that except when otherwise stipulated in laws and regulations, an arbitration agreement is valid only where the subject thereof is a civil dispute that may be settled between the parties.

Accordingly, some disputes are excluded from the scope of arbitrable cases. For example, disputes over divorce or dissolution of an adoptive relationship are explicitly excluded from the subject of arbitration agreement. Also, an arbitration agreement concerning a dispute between an individual employee and an employer over working conditions and other matters concerning a labor relationship is invalid, and an arbitration agreement for a future dispute between a consumer and a business operator may be terminated by the consumer (Article 3 and 4 of the Supplementary Provisions of the Arbitration Act).

Requirement for arbitration agreement to be in writing

An arbitration agreement must be in writing, such as in the form of a document signed by all the parties, letters or telegrams exchanged between the parties or other documents (Article 13(2) of the Arbitration Act).

Provided, however, that, under Article 13(6) of the amended Arbitration Act, an arbitration agreement is deemed to be made in writing where a non-written agreement between the parties refers to a document or electronic record which includes a clause of an arbitration agreement.

Yes. Article 13(7) of the Arbitration Act provides for the principle of the separability of an arbitration agreement. Accordingly, an arbitration clause is generally treated as an agreement independent of the main contract. However, in limited circumstances, for example where a party enters into a main contract under duress, not only the terms in the main contract but also the arbitration agreement stipulated therein would be considered invalid or voidable.

No. The courts in Japan do not explicitly apply the validity principle.

In principle, the effect of an arbitration agreement is limited to the parties or signatories of the agreement and does not extend to third parties or non-signatories. However, there are some exceptions to this principle.

First, since a general successor of a party to an arbitration agreement (for example, where a company absorbs another as part of a merger where the company that was absorbed was a party to an arbitration agreement) may be deemed to be the same party, the arbitration agreement shall be extended to the general successor, unless there is a contrary agreement between the original parties to the arbitration agreement or the rights and obligations subject to the succession are personal.

Second, it is also generally understood that the effect of the arbitration agreement signed by a representative of an association or foundation without its own rights and abilities (Kenrinoryoku-naki-shadan) extends to their members.

Third, if a representative or officer of a corporation enters into or performs a contract containing an arbitration agreement on behalf of the corporation (i.e. the corporation is the party to the contract), such representative or officer might also be bound by the arbitration agreement. There is a lower court precedent which held that where a Japanese corporation and a British corporation entered into an agency contract including an arbitration clause, the arbitration clause should be applied to the president and directors of the UK corporation as well as to the UK corporation itself. The main reasoning of the court was that it was desirable to judge the appropriateness of the claims against the president, directors and the corporation in a unified manner.

Fourth, there is split in court precedents as to whether a person who acquired a right under a main contract including an arbitration clause, but not the whole contract, is bound by the arbitration clause. Some court precedents decided that it was and others that it was not.

Where an arbitration agreement does not explicitly stipulate a governing law, the Tokyo District Court decision of 22 January, 2024 (2021 (Wa) No.5804) applied Article 7 of the Act on General Rules for Application of Laws and held that as a starting point, the governing law of the arbitration agreement should be determined based on the parties’ agreement. It further held that even in the absence of an express agreement on governing law within the arbitration agreement itself, if circumstances such as the validity or content of the arbitration agreement, or the nature of the contract as a whole, indicate an implied agreement by the parties on the governing law, that implied agreement should be used as its basis. The district court made clear that it was following the decision of the Supreme Court of Japan of 4 September 1997 (Minshu vol. 51 No.8 p.3657). The district court determined that the governing law for the arbitration agreement is U.S. law, as the agreement between the defendant—a U.S. airline—and the plaintiffs—flight attendants employed by the defendant—stipulates that their employment terms are governed solely by U.S. law. In addition, the Tokyo District Court decision of  1 June, 2022 (2020 (Wa) No.33446) also applied the same legal framework as the aforementioned precedent. It held that if the contract stipulates it shall be governed by and construed in accordance with the English law relating to contracts between private parties, and also stipulates that all disputes arising from the contract, along with all interpretations and validity of its terms, were to be resolved by arbitration in the City of London, England then consequently, the court determined, there was an implied agreement that English law applied to the arbitration agreement. Furthermore, the decision by the Tokyo District Court on 15 April 2021 (2019 (Wa) No. 13402) relates to a case where in a charter party the parties agreed to resolve all disputes by arbitration seated in Singapore pursuant to the 1996 Arbitration Act and the general rules of the London Maritime Arbitrators Association. The governing law of the charter party was English law. Under those facts, the court applied Article 7 of the Act on General Rules for Application of Laws and found that the parties impliedly agreed on English law to govern the arbitration agreement. In this case, the court, by its interpretation of English law, extended the scope of the arbitration agreement to contractual and tort claims relating to the charter party as well as to a party who had just signed the charter party as a “guarantor”.

The parties to an arbitration proceeding may agree on the substantive law applicable to the case (Article 36(1) of the Arbitration Act). If the parties designate the law of a state to be applied by an arbitral tribunal, such designation would be deemed as referring to the substantive law rather than conflict of law rules of that state, unless agreed otherwise by the parties. If there is no such agreement between the parties, the arbitral tribunal will apply the substantive law of the state with which the civil dispute subject to the arbitral proceedings is most closely connected (Article 36(2) of the Arbitration Act).

The Arbitration Act does not impose any restrictions concerning the qualifications of arbitrators. In particular, there are no nationality or citizenship requirements in respect of appointment of arbitrators, unless otherwise agreed by the parties. An arbitrator does not have to be legally qualified, and it is not unusual in Japan for a law professor to serve as an arbitrator. If the candidate arbitrators have doubts over their own impartiality or independence, they must disclose the relevant information or circumstances (Article 18(3) and (4) of the Arbitration Act). Practitioners in Japan often refer to the IBA Guidelines on Conflicts of Interest in International Arbitration when considering impartiality and independence

Normally arbitration rules of an arbitral institution agreed by the parties govern the procedures for selecting a tribunal (Article 17(1) of the Arbitration Act). The court will appoint arbitrators at the request of a party if either party fails to comply with the agreed process for appointment of its arbitrator (Article 17(5) of the Arbitration Act). In cases where the parties agree on neither an arbitral institution nor a method for appointment of arbitrators, then if there are two parties and three arbitrators are requested, the parties will each appoint one arbitrator, and the two arbitrators appointed by the parties will then appoint the third arbitrator (Article 17(2) of the Arbitration Act). Should a party fail to appoint an arbitrator within 30 days of receipt of a request to appoint an arbitrator by the other party who has already appointed an arbitrator, the court must appoint the arbitrator at the request of that other party. If the two arbitrators appointed by the parties fail to appoint the third arbitrator within 30 days of their appointment, the court must appoint the third arbitrator at the request of either party (Article 17(2) of the Arbitration Act). If there are two parties and one arbitrator is requested, the court will appoint the arbitrator at the request of a party when the parties failed to reach an agreement for appointment of the sole arbitrator (Article 17(3) of the Arbitration Act). If there are three parties or more and no agreement exists among the parties, the court will appoint arbitrator(s) at the request of a party (Article 17(4) of the Arbitration Act).

A party may challenge the appointment of an arbitrator if (a) the arbitrator does not meet the qualifications agreed by the parties, or (b) there is reasonable doubt over the impartiality or independence of the arbitrator (Article 18(1) of the Arbitration Act). The parties may agree on procedures for challenging the appointment of arbitrators (Article 19(1) of the Arbitration Act). In the absence of such agreement, the arbitral tribunal will make a decision on the challenge at the request of a party (Article 19(2) of the Arbitration Act). In such a case, a party that intends to challenge the appointment must submit to the arbitral tribunal a written application within 15 days of becoming aware of (i) the constitution of the arbitral tribunal or (ii) the existence of any grounds for the challenge, whichever comes later (Article 19(3) of the Arbitration Act). If the challenge is dismissed, the party that made the challenge may file an application to challenge the appointment of the arbitrator with the court within 30 days of receipt of notice of the decision on the challenge (Article 19(4) of the Arbitration Act). If the court rejects this challenge then no further appeal to a higher court is available for any party (Article 7 of the Arbitration Act). This is so that the dispute over the appointment of the arbitrator may be revolved swiftly. On the other hand, if the composition of the arbitral tribunal violates Japanese laws and regulations or agreements by the parties, there is possibility that the party may file an application with the court to set aside an arbitral award rendered by the arbitral tribunal (Article 44(1) (vi) of the Arbitration Act).

An important Supreme Court decision was rendered on 12 December 2017 (Minshu, Vol. 71, No. 10, p. 2016). In that case, an arbitral award was rendered by an arbitral tribunal, made up of a panel of three arbitrators, including a partner from the Singapore office of an international law firm (the “Arbitrator”), in relation to a JCAA arbitration among U.S. corporations X1 and X2, and Japanese corporation Y1 and Singapore corporation Y2. An application for setting aside the arbitral award was filed on the grounds that the Arbitrator failed to disclose the fact that a colleague at the San Francisco office of the same international law firm had acted as counsel for an affiliate company of Y1 in respect of a class action in the United States (“Fact of Potential Conflict”). In relation to the legal issue of whether the Arbitrator breached the duty of disclosure under Article 18(4) of the Arbitration Act, the Supreme Court of Japan decided as follows: The abstract advance disclosure submitted by the Arbitrator shall not be regarded as disclosure of the Fact of Potential Conflict the Arbitrator’s written statement upon his appointment as the arbitrator that an attorney at his law firm might in the future advise or represent the parties to the arbitration and/or their affiliated companies in relation to cases unrelated to the arbitration at issue, was not sufficient disclosure; The duty to disclose is ongoing in nature and the Arbitrator assumed the duty of disclosure for facts concerning his impartiality or independence until the end of the arbitral proceeding, irrespective of requests by a party; and The Arbitrator must disclose to the parties not only facts that he was aware of, but also what could usually be found by a reasonable investigation into the existence or nonexistence of the facts relating to his impartiality and independence. The case was remanded to the Osaka High Court for further factual examination and the High Court decided on 11 March 2019 that the Arbitrator did not breach the duty of disclosure under Article 18(4) of the Arbitration Act.

Please note that, Article 24 of the JCAA Commercial Arbitration Rules 2021 explicitly imposes on the arbitrators an ongoing duty to make reasonable investigation and provides that an advance declaration in relation to circumstances giving rise to justifiable doubts as to the arbitrator’s impartiality or independence which may possibly arise in the future does not discharge the arbitrator’s ongoing duty of disclosure.

The Arbitration Act does not include provisions for immunity of arbitrators. It is generally understood that some liabilities of arbitrators may be exempted but in light of public policy arbitrators will likely be liable for their intentional acts or acts of gross negligence even if the arbitration agreement has a stipulation for immunity for such liability. In this regard, Article 13 of the JCAA Rules provide for immunity for arbitrators, setting out that no arbitrators shall be liable for any act or omission in connection with the arbitral proceedings unless such act or omission is shown to constitute willful misconduct or gross negligence. On the other hand, Article 30 of the rules of arbitration of Tokyo Maritime Arbitration Commission (TOMAC) of the Japan Shipping Exchange, Inc stipulates that TOMAC, the arbitrators and the secretariat have complete civil immunity from liability regarding the arbitral proceedings and the arbitral award.

Yes. The principle of competence-competence is recognized in Japan. An arbitral tribunal may address issues of whether its authority is legitimate (Article 23(1) of the Arbitration Act). If the arbitral tribunal decides that it has jurisdiction in an independent decision made prior to an arbitral award, a party may still ask a court for judicial review of that decision as long as the party files such a petition with the court within 30 days from the receipt of that decision although, such judicial review does not necessarily interrupt the arbitral procedure (Article 23(5) of the Arbitration Act).

Pursuant to Article 14(1) of the Arbitration Act, if the defendant requests so, Japanese courts must dismiss the litigation without prejudice based on the existence of the arbitration agreement, except where:
i. the arbitration agreement is invalid due to nullity, rescission or for any other reasons;
ii. it is impossible to carry out an arbitration procedure based on the arbitration agreement; or
iii. the request was made after the party making the request presented oral arguments on the merits of its case or made statements on the merits in preparatory proceedings.

Even while a lawsuit under Article 14(1) is pending in the court, an arbitral tribunal may commence or continue the arbitration procedure, and issue an arbitral award (Article 14(2) of the Arbitration Act).

The respondent must state its defense with respect to claims made by the claimant within the period determined by the arbitral tribunal (Article 31(2) of the Arbitration Act). If the respondent fails to provide a defense, the arbitral tribunal shall continue the arbitral proceedings, unless otherwise agreed by the parties (Article 33(2) of the Arbitration Act. Article 44(1) of the JCAA Rules provides the same rule.). If the respondent fails to appear at an oral hearing or to submit required documentary evidence, then, unless agreed otherwise by the parties or the respondent has justifiable grounds for failure to do so, the arbitral tribunal may render an arbitral award based upon the evidence that has been presented to it up to that time (Article 33(3) of the Arbitration Act. The same rule is set out in Article 44(2) of the JCAA Rules.). Even if the respondent fails to participate in the arbitral proceedings, the local court has no authority to compel his/her participation against his/her will under the Arbitration Act.

The Arbitration Act is silent on joinder. Although it would be decided on a case-by-case basis, even if all parties agree to the joinder, the arbitral tribunal would still retain its discretion to deny the joinder if the tribunal finds reasonable grounds to do so. If all parties do not agree to the joinder, the arbitral tribunal will not be able to allow for the joinder.

In this regard, the JCAA Rules allow third-party participation and the joinder of parties in certain conditions, such as, for example, when all claims are made under the same arbitration agreement or all parties and the third party have agreed in writing to the joinder (Article 56(1) of JCAA Rules). Even when the requirement under the JCAA Rules is met, the arbitral tribunal may deny joinder if the arbitral tribunal finds it inappropriate due to expected delay in the arbitral proceedings or any other reasonable grounds (Article 56(5) of the JCAA Rules).

In practice, issues regarding the participation of a third party are most likely to be resolved through consultation and agreement among the parties, the third party and the arbitral tribunal based on the specific circumstances.

The parties have three options as interim measures, which are interim measures issued (i) by an arbitral tribunal (after the constitution of an arbitral tribunal) under the Arbitration Act, (ii) by courts of law under the Civil Provisional Remedies Act (Law No.91 of 1989), and, if the JCAA Rules are applicable, (iii) by an emergency arbitrator (pending the constitution of an arbitral tribunal) under the JCAA Rules. The Japanese law does not preclude or restrict the court’s power to issue interim measures due to the mere fact that the arbitral tribunal is given the power to issue same. Theoretically, unless otherwise agreed, the parties may seek both the arbitral tribunal’s interim measures and the court’s interim measures on the same subject matter. Which interim measures prevails will be decided on a case-by-case basis.
Interim measures by an arbitration tribunal: Article 24(1) of the Arbitration Act provides that, unless otherwise agreed by the parties, and until an arbitral award is made, an arbitral tribunal may, upon the petition of a party, order the other party to take the following measures:.

• 1. to prohibit the disposal of or any other change to properties necessary for the payment of money;
  2.  to prohibit the disposal of or any other change to any properties which are the subject matter of the claim;
  3.  to prevent the detrimental damage or imminent danger arising, take necessary measures for such prevention, or restore the status quo of the property or relationship of rights;
  4.  to prohibit from taking actions that would obstruct the arbitral proceedings in the arbitration procedure; and/or
  5.  to prohibit from taking actions such as disposing of, erasing or altering evidence necessary for the proceedings in the arbitration procedure.

A party filing a petition for interim measures set forth above is required to make a prima facie showing of (i) the existence of the rights that must be preserved and (ii) the fact constituting the grounds for the petition (Article 24(2) of the Arbitration Act).

The arbitral tribunal may also order the party filing a petition for interim measures to provide appropriate security in connection with those interim measures (Article 24(3) of the Arbitration Act).

The interim measures issued by an arbitral tribunal is enforceable in Japan. To enforce the interim measures issued for (c), the applicant files a petition with the court for an approval order of execution of the interim measures (Article 47(1) (i) of the Arbitration Act). To enforce the interim measures issued for (a), (b), (d) and (e), the applicant files a petition with the court for an approval order of execution of a penalty payment order for violation or likely violation of the interim measures (Articles 47(1) (ii) and 49(1) of the Arbitration Act). The court may dismiss these petitions only when it finds that any of the grounds set forth in Article 47(7) of the Arbitration Act exist.

Interim measures by courts of law: Before or during an arbitral proceeding, a party may file a court petition for a provisional order with regard to a civil dispute that may be the subject of the arbitration agreement (Article 15 of the Arbitration Act). The Arbitration Act does not provide any procedures for specific interim measures by the court; these are handled in accordance with the Civil Provisional Remedies Act (Law No. 91 of 1989). The interim measures issued by courts can be enforced on a provisional basis in accordance with the Civil Execution Act (Law No. 4 of 1979).

Interim measures by an emergency arbitrator: The JCAA Rules set out detailed interim measures that the emergency arbitrator may order, subject to certain conditions being satisfied (Articles 75 through 79 of the JCAA Rules). The interim measures issued by an emergency arbitrator does not fall into the interim measures provided under the Arbitration Act, and there is no provision in the Arbitration Act for the enforceability by the court of interim measures issued by an emergency arbitrator. Therefore, based on literal interpretation of the Arbitration Act, the interim measures issued by an emergency arbitrator appear to be unenforceable in Japan.

Generally, the rules which the arbitral tribunal should observe in respect of both arbitration procedure in general and evidentiary matters specifically, shall be aligned with the agreement of the parties (Article 26(1) of the Arbitration Act). If there is no such agreement by the parties, the arbitral tribunal has the power to carry out the arbitral procedure in such a manner as it finds appropriate, unless this manner is in violation of the Arbitration Act (Article 26(2) of the Arbitration Act). Such power includes determination of the admissibility of evidence, necessity of examination, and weight of evidence (Article 26(3) of the Arbitration Act). The IBA Rules on the Taking of Evidence in International Commercial Arbitration are recognized as the primary guidelines used by arbitrators in Japan.

The arbitral tribunal, or a party who has obtained consent from the arbitral tribunal, may request court assistance in taking evidence pursuant to the Code of Civil Procedure (Law No.109 of 1996), unless otherwise agreed by the parties (Article 35(1) (2) of the Arbitration Act). The taking of evidence can include examination of witnesses and experts, production of documents, the commission of an examination, and inspection (Article 35(1) of the Arbitration Act). The Code of Civil Procedure governs actual procedures and the effects of court orders. During such procedure in court, based on permission by the presiding judge, the arbitrators may ask factual witness and expert witnesses questions (Article 35(5) of the Arbitration Act).

The Japanese courts are granted no power to compel witnesses to participate in arbitration proceedings under the Arbitration Act.

An attorney-at-law qualified in Japan and a registered foreign attorneys are subject to the ethical codes for practicing (the Basic Rules on the Duties of Practicing Attorneys and Gaikokuho-jimu-bengoshi Basic Rules on the Duties of Practicing Attorney) administered by Japan Federation of Bar Associations. These codes apply when they are acting as counsel or arbitrators, whether in or outside Japan. Apart from these ethical codes there are no other special ethical rules that are applicable to counsels or arbitrators in international arbitrations in Japan.

Some arbitration practitioners in Japan do take into consideration the IBA Guidelines on Party Representation in International Arbitration. The Arbitration Act does require arbitrators to be impartial and independent (Article 18(1) (ii) of the Arbitration Act) and provides for criminal offences relating to bribes to arbitrators (Articles 53 to 55 of the Arbitration Act). Also, the Japan Association of Arbitrators (JAA) issued the Code of Ethics for arbitrators in 2008, which is an advisory (i.e., non-mandatory) provision applicable to members of JAA acting as arbitrators.

While the Arbitration Act is silent on the confidentiality of arbitral proceedings, the parties can agree on confidentiality. In practice, binding confidentiality obligations are sometimes incorporated in arbitration agreements. In addition, the rules of most arbitration institutions expressly require that arbitral proceedings and records be kept confidential from the public (e.g., Article 42(1) of JCAA Rules).

The Arbitration Act has only generic provisions on fees and no specific fee structure is stipulated by it. The parties may agree on how to apportion the cost of the arbitration procedure, including legal fees, between them (Article 52(1) of the Arbitration Act).

If the parties agree on arbitration before the JCAA, its website provides automatic calculator of the arbitration costs based on rules, number of arbitrators and the amount of the claim (https://www.jcaa.or.jp/en/arbitration/costs.html). The arbitral tribunal may apportion the costs of the arbitration, including reasonable legal fees of counsel, between the parties, taking into account the parties’ conducts throughout the course of the arbitral proceedings, the determination on the merits of the dispute, and any relevant circumstances (Article 80(2) of the JCAA Rules. See Article 52(3) of the Arbitration Act). It is generally recognized that a large number of arbitral awards under the JCAA Rules have adopted the principle of “costs follow the event”.

In the absence of agreement, each party must bear its own costs in relation to the proceedings (Article 52(2) of the Arbitration Act); the unsuccessful party is not obligated to pay the successful party’s costs.

Whether pre- and post-award interest can be awarded on the principal claim and costs incurred will be determined based on the applicable substantive law. Under Japanese law, depending on the facts of the cases, it is permissible to grant pre- and post-award interest on the principal claim, even if the parties did not explicitly agree to this in the main contract. The current statutory interest rate is 3 % per annum for both commercial and civil claims, which is subject to periodic review every three years.

An arbitral award is deemed to have the same effect as a final and binding judgment in Japan (Article 45(1) of the Arbitration Act). The arbitral award is automatically recognized unless it falls under one of the items set forth in Article 45(2) of the Arbitration Act.

An arbitral award must be reasoned; provided, however, that such requirement does not apply to cases where the parties have agreed otherwise (Article 39(2) of the Arbitration Act). An arbitral award shall be in writing and carry the arbitrator’s/arbitrators’ signature on it (Article 39(1) of the Arbitration Act). The date and the seat on which the arbitral award has been made shall be provided in an arbitral award (Article 39(3) of the Arbitration Act).

In order to enforce an arbitral award in Japan, a party who seeks enforcement must file a petition, together with a copy of the arbitral award and the Japanese translation thereof, with the competent court for an execution order (Article 46(1) (2) of the Arbitration Act). If the court finds it appropriate, after hearing the opinions of the respondent, the Japanese translation of the arbitral award, in whole or in part, is not required to submit (Article 46(2) of the Arbitration Act). An execution order will be granted unless an exception under Article 45(2) of the Arbitration Act is found by the court (Article 46(7) to (9) of the Arbitration Act). Article 45(2) of the Arbitration Act sets out substantially the same legal requirements for enforcement as those provided under the New York Convention.

It will typically take three to six months for the enforcement procedures at the court of first-instance to acquire an execution order. If a party attempts to enforce an arbitral award against assets in Japan of the other party and the other party does not have business premises or other office in Japan, the formal international service of the written application will be required. In such case, enforcement procedures will take a significant amount of time.

Under the Arbitration Act, an ex parte procedure is not available for enforcement of an arbitral award (Articles 46(9) and 44(4) of the Arbitration Act).

The Arbitration Act does not stipulate an appeal mechanism in local courts once an arbitral award is recognized to be final.
However, arbitral awards can be challenged and set aside in Japanese courts if the seat of the arbitration is in Japan (Articles 3(1) and 44(1) of the Arbitration Act). Article 44(1) limits the grounds for setting aside arbitral awards to the following:

•  the arbitration agreement is invalid due to the limited capacity of a party;
•  the arbitration agreement is invalid on grounds other than the limited capacity of a party pursuant to the laws and regulations designated by the agreement of the parties as those which should be applied to the arbitration agreement;
• the requisite notice under the arbitration proceeding, including the one for appointment of arbitrators, was not given to one party;
•  one party was unable to defend its case;
• the subject matter of the award is beyond the scope of the arbitration agreement or claims of the arbitration;
•  the composition of the tribunal or arbitration proceeding was not in accordance with Japanese laws or the parties’ agreement;
•  the award was concerned with a dispute not qualifying as a subject for arbitration pursuant to Japanese laws; or
•  the award is against public policy in Japan.

Parties may not challenge an award when an execution order has become final and binding or more than 3 months have elapsed after receiving notice of the award, whichever comes first (Article 44(2) of the Arbitration Act). The local court must hold a hearing which both parties can attend, to adjudicate on any challenge (Article 44(4) of the Arbitration Act), but will not re-evaluate the merits of the case.

The Arbitration Act does not stipulate whether it is possible to waive any rights to challenge an arbitral award by agreement before the dispute arises. Although the Code of Civil Procedure allows parties to waive the right to appeal to the High Court (i.e., the court of second instance in Japan), an agreement to waive all the rights to claim for setting-aside an arbitral award under Article 44 of the Arbitration Act is likely to be considered invalid. Issues such as whether an arbitral award violates the public policy of Japan are closely connected to just and proper dispute resolution by arbitration.

Arbitral awards will not bind third parties or non-signatories who did not participate in the arbitral proceedings. As such, third parties and non-signatories may not apply for setting aside an arbitral award.
Please also see Question 11.

The Arbitration Act does not have any explicit provisions for emergency arbitrators. However, Article 75 through Article 79 of the JCAA Rules set out requirements and procedures for appointment of emergency arbitrators.

Interim measures issued by an emergency arbitrator does not necessarily fall into the interim measures provided under the Arbitration Act, and there is no provision in the Arbitration Act for the enforceability by the court of interim measures issued by an emergency arbitrator. Therefore, based on literal interpretation of the Arbitration Act, the interim measures issued by an emergency arbitrator appear to be unenforceable in Japan.

The Arbitration Act is silent on simplified or expedited procedures, but Part 2 (Article 83 to Article 90) of the JCAA Rules provides for expedited arbitration procedures. Unless the parties agree otherwise or there are circumstances that make it clearly inappropriate to apply the expedited procedures, arbitration before the JCAA may be conducted under an expedited procedure if: (a) the amount in dispute is JPY300 million or less; or (b) a party notifies the JCAA in writing of the agreement by the parties to submit the dispute to expedited arbitration procedures (Article 84(1) and (3) of the JCAA Rules). Under expedited procedures, the arbitral tribunal will make reasonable efforts to render an arbitral award within 6 months from the date of the constitution of the tribunal or within 3 months where the amount in dispute is JPY 50 million or less (Article 88 of the JCAA Rules). Expedited procedures are often used for JCAA administered arbitration.

We are not aware of any such court decisions in Japan. As a matter of law, even if an arbitral award were enforced in another jurisdiction, the Japanese courts would decide whether to set aside such award on a case-by-case basis pursuant to the Arbitration Act.

On the other hand, although the court in Japan is not necessarily obliged to refuse to make an enforcement decision for an arbitral award set aside by the courts in the seat of arbitration (Article 46(7) of the Arbitration Act and Article V.1. (e) of the New York Convention), the Arbitration Act as a basic rule prevents the enforcement of a foreign arbitral award that has been set aside at the seat of arbitration (Article 46(7) and Article 45(2) (vii) of the Arbitration Act).

We are not aware of recent court decisions on the issue of corruption in relation to arbitration. If an arbitrator has received a bribe, the award rendered by the arbitrator may be set aside under Article 44 of the Arbitration Act and may not be recognized or enforced under Article 45 of the Arbitration Act as being contrary to public policy.

The issue of corruption by judges is not common in the courts in Japan. Japan was ranked 20th out of 180 countries in Transparency International’s Corruption Perceptions Index (2024).

There have been civil lawsuits in Japan relating to climate change. For example, it was reported that in August 2024, a group of young people in Japan filed a civil lawsuit with Nagoya District Court against 10 major thermal power generation companies, requiring those companies to reduce carbon dioxide emissions to certain amounts based on the standards required by science.

Human right issues are becoming increasingly important in order to conduct business in Japan. Recent developments in the area of human rights in business contain a variety of themes including insufficient wages, sexual and other forms of harassment, environment and climate change, and protection of foreign workers.

No. Japan does not implement any rules or regulations on such fields in the context of international arbitration. In relation to the use of Artificial Intelligence (AI) in the context of mediation, arbitration, and other alternative dispute resolution (collectively, “ADR”), in March 2022, Japanese government developed and published a basic policy on the promotion of Online Dispute Resolution (ODR), in which ADR procedures are conducted online using digital technology. In the policy, with a view to realizing ODR using AI, the possibility of various uses of Artificial Intelligence (AI) and issues related to ethics and other issues that may arise with the use of AI are being examined from various perspectives