The amended Japan Commercial Arbitration Association (“JCAA”) arbitration rules came into effect on February 1, 2014. These amendments were a significant overhaul from the predecessor rules and follow international best practices.
This note highlights a number of the key amendments below:
Terms of Reference (Rule 40)
Rule 40 allows a tribunal to utilize a Terms of Reference to narrow down the issues of an arbitration at the outset of the proceedings. However it is not mandatory for the tribunal to adopt, rather, the Terms of Reference is a tool available to the tribunal if they choose to adopt it. If the tribunal considers adopting the Terms of Reference, the tribunal must allow parties to make comments any Terms of Reference before the tribunal determines whether to adopt them. This is particularly noteworthy as is appears that various arbitration institutions have different approaches to the usefulness of the Terms of Reference, while on one side it can be argued that a Terms of Reference constrains a tribunal to only the issues that arise at the commencement of an arbitration, the counter argument is that issues to be decided are clearly defined at the outset of an arbitration which leads to greater efficiency. The approach of an optional Terms of Reference taken by the JCAA is an innovative one.
Joinder of Third Parties (Rule 52)
Following recent amendments to other institutional rules, Rule 52 provides for the joinder of additional parties (as either co-claimant or co-respondent) in two instances. Those being:
(1) that all parties and the third party agree in writing; or
(2) all claims are made under the same arbitration agreement and the third party consents in writing when requested to join after the constitution of the tribunal.
(3) above requires the consent of the third party in writing to overcome the issue that the third party would not have be able to nominate an arbitrator. Additionally, Rule 52(4) provides that a tribunal may deny a request for joinder, where joinder will delay the arbitral proceedings or if the tribunal finds any other reasonable ground to deny the request.
Consolidation (Rule 53)
Rule 53 provides for arbitral tribunals to permit the consolidation of ongoing claims to take place if one of the following three conditions have been met:
(1) Where all of the parties have agreed to consolidation in writing;
(2) where all claims arise under the same agreement; or
(3) where all claims arise between the same parties; and:
(a) the same or similar questions of fact arise;
(b) the dispute is referred by the arbitration agreement to the JCAA; and
(c) the arbitration proceedings are capable of being conducted in a single proceeding.
In regards to this rule, it is particularly noteworthy that it is the tribunal that makes the decision; for instance under the ICC Rules it is the ICC Court of Arbitration (there is no equivalent body at the JCAA) that makes the decision.
Mediation (Rule 54)
The med-arb provisions that are included in the 2014 JCAA Rules can be considered to complement the med-arb provisions that are included in the Japanese Arbitration Law. Rule 53 explicitly states that an arbitrator may not act as a mediator without the written agreement of the parties.
Furthermore, Rule 54 of the JCAA Rules provides that if parties agree to engage in mediation during an arbitration, the mediation shall take place in accordance with the JCAA International Commercial Mediation Rules which entered into force in 2009. Rule 55 continues on to outline special rules that apply if an arbitrator serves as a mediator.
Interim measures (Rule 66)
Rule 66 provides for a tribunals ability to grant interim measures, Rule 66 is aligned with the 2006 amendments on interim measures made to the UNCITRAL Model Law. In this respect Rule 66 is particularly noteworthy as the Japanese Arbitration Law has not adopted the 2006 amendments and as a result, Rule 66 is essential to provide a tribunal with the power to grant interim measures.
Emergency Arbitration (Rules 70-74)
A further significant addition to the JCAA rules are emergency arbitration provisions (which resemble the emergency arbitration provisions added to most other institutional rules in the past several years).
The rules indicate the requirements for commencing an emergency arbitration as will as provide for the framework for the emergency arbitration, which is conducted within a very short timeframe in a considerably efficient manner. The JCAA emergency arbitrator rules provide for the appointment of a sole emergency arbitrator before a tribunal is constituted or after an arbitrator has ceased to perform his duties.
Under the rules an emergency arbitrator is appointed within two business days from the JCAA’s receipt for an application for emergency relief. The emergency arbitration then immediately commences the emergency arbitral process and must render an award within two weeks from the date that the emergency arbitrator is appointed. Under the JCAA Rules, as is the case under other institutions’ emergency arbitrator provisions, the emergency measures are not binding on an arbitral tribunal once it is constituted; furthermore an arbitral tribunal may approve, modify, suspend or terminate any emergency measures.
Expedited Procedures (Rules 75-82)
Rules 75-82 provide for expedited procedures, which when utilized, allow for an arbitration to take place very quickly. The expedited procedures apply in two circumstances:
(1) where the parties agree for expedited procedures to apply to a dispute of any value, or
(2) when the amount in dispute does not exceed ¥20,000,000 unless the parties otherwise agree that the expedited procedures will not apply to the dispute.
One noteworthy feature of the expedited procedures is that the time limit for a tribunal to render an award is three months from the date that the arbitrator is appointed, which may only be extended by the JCAA if the case is complex or it is determined there are any other compelling reasons to do so. This three month time limit contrasts the six month limit under the standard rules.
Rule 77 establishes critical parts of the expedited procedure framework by only allowing the filing of counterclaims or set-off defenses within two weeks of the Respondent’s receipt of the Request for Arbitration if:
(1) the amount or economic value of the counterclaim(s) or set-off defense(s) does not exceed ¥20,000,000, or
(2) the amount or economic value of the counterclaim(s) or set-off defense(s) exceeds ¥20,000,000, but the parties agreed in writing to submit such counterclaim(s) or set-off defense(s) to expedited procedures.
The effect of these provisions in particular put considerable constrains on the time permitted to conduct the arbitration as well as an attempt to limit the complexity of the proceedings.
The expedited rules further provide that there shall be no amendments made to the claim, counterclaim or set-off defense. In relation to the procedure, a sole arbitrator shall be appointed in the expedited procedure and a hearing shall not last for more than one day in principal. Furthermore, the rules above relating to third party joinder and consolidation do not apply to arbitrations under expedited procedures. All of these rules briefly mentioned should indicate that many aspects related to the arbitral procedure are shaved off to make the process as efficient as possible. Which, especially in the context of claims that are lower in value, is entirely appropriate to do.
The amendments bring the JCAA rules in line with various rules of other institutions as well as implement new innovative tools such as Multiple Claims (Rule 15) as well as the optional Terms of Reference (Rule 40). This modernization is a step in the right direction for the JCAA which in 2013 fiscal year received 26 new requests for arbitration, ensuring that its rules follow international best practices will aid in attracting parties to arbitrate at the JCAA.
 ICC Arbitration Rules, 2012, Article 10.
 Japanese Arbitration Law 2003, Article 38(4) and (5).
 JCAA Rules (2014), Rule 81.1.
 JCAA Rules (2014), Rule 39.1.
 JCAA Rules (2014), Rule 78.
 JCAA Rules (2014), Rule 79(1).
 JCAA Rules (2014), Rule 80.
 JCAA Rules (2014), Rule 82.