Search for:


A.1       Legislation

International arbitration in Japan continues to be governed by the Arbitration Act of 2003, which took effect in 2004 and to which no legislative amendment has been made since. Japan is, however, expected to amend its Arbitration Act imminently. After several steps in both the public and private sectors to build the country as an international dispute resolution hub during the last few years, an overhaul of the underlying legislation is seen as the likely next step in Japan’s arbitration reforms. The Legislative Council of the Ministry of Justice announced its interim draft proposals of amendments to Japan’s Arbitration Law in March 2021, where it invited public comments, and then introduced a summary draft proposal of amendments to Japan’s Arbitration Law in October 2021 on its website. The proposals include:

  • An enforcement scheme for interim and/or provisional measures issued by arbitral tribunals, which is in line with the amended UNCITRAL Model Law 2006.
  • Broader jurisdiction of the Tokyo District Court and the Osaka District Court over cases related to procedures under the Arbitration Act.
  • Court discretion not to request Japanese translations of arbitral awards and written evidence.

A.2       Institutions, Rules and Infrastructure

The major international arbitration institution in Japan is The Japan Commercial Arbitration Association (JCAA). On 1 July 2021, the JCAA introduced its revised Commercial Arbitration Rules (“New JCAA Rules“) and new Appointing Authority Rules (“Appointing Authority Rules“). While the JCAA Rules were revised as recently as 1 January 2019, the New JCAA Rules introduce two key changes to the existing rules and the newly introduced Appointing Authority Rules, which will likely provide a distinct aspect to dispute resolution in Japan.[1]

The New JCAA Rules introduce two major changes to the existing JCAA Rules: (i) expedited procedures will apply to arbitrations in which the amount in dispute does not exceed JPY 300,000,000 (around USD 2,750,000), except in certain circumstances; and (ii) a new category of administrative fees will apply to “small claims” in which the amount claimed does not exceed JPY 5,000,000 (around USD 45,000).

As regards the new maximum claim value for expedited procedures to apply, the new JPY 300,000,000 ceiling represents a considerable increase from the previous upper limit of JPY 50,000,000 (approximately USD 400,000) introduced under the previous revisions to the JCAA Rules and appears targeted at keeping pace with other major arbitral institutions in the region. In one press release on the introduction of the New JCAA Rules, the JCAA noted that, in 47.4% of JCAA-administered arbitrations between 2011 and 2020, the amount in dispute did not exceed JPY 300,000,000. As such, this recent revision should better serve the JCAA’s “typical user” in ensuring arbitrations are as swift and efficient as possible.[2]

With respect to administrative fees, the New JCAA Rules insert a new category of fees for “small claims.” Here, for claims with a value not exceeding JPY 5,000,000, the administrative fee will be 10% of the economic value of the claim. This new “bracket” of administrative fees appears again to seek to expand the use of JCAA arbitration for smaller claims and perhaps for fairly typical JCAA users. Indeed, the JCAA noted in a press release that, between 2011 and 2020, 21.43% of JCAA administered arbitrations had an amount in dispute of less than JPY 50,000,000.

By way of the JCAA’s Appointing Authority Rules, the JCAA may assist with the appointment of arbitrators in ad hoc arbitrations where the JCAA is selected as appointing authority by the parties. Moreover, the JCAA may assist with the appointment of arbitrators in arbitrations conducted under the rules of other arbitral institutions under the Appointing Authority Rules where they are designated to do so. The Appointing Authority Rules provide an additional string to the JCAA’s bow as regards the services it is able to offer arbitration users and follows the example of other major arbitral institutions — including the ICC — in establishing specific rules for such circumstances.


In a 2017 case, Japan’s Supreme Court overturned a decision of the Osaka High Court to set aside a JCAA award on the ground that the presiding arbitrator had failed to disclose relevant facts to the parties.[3]

In the arbitration subject to this decision, the presiding arbitrator was a partner in the Singapore office of a global firm, and an attorney in the firm’s US office represented an affiliate of the claimants in an ongoing matter unrelated to the arbitration. This fact was not disclosed to the parties or the JCAA, as required both by Japan’s Arbitration Act and international best practice (under the “IBA Guidelines on Conflicts of Interest in International Arbitration this was an “Orange List“ matter for which a conflicts check should have been undertaken). After the tribunal rendered an award in favor of the claimants, the respondent commenced proceedings in Osaka District Court, arguing that, among other things, the non-disclosure had rendered the constitution of the tribunal contrary to Japanese law and triggered the right to seek a set-aside under article 44(1)(vi) of Japan’s Arbitration Act.

The Osaka District Court dismissed the application for set-aside as: (i) there would not have been “reasonable grounds” to suspect the impartiality or independence of the arbitrator under article 18(1)(ii) of Japan’s Arbitration Act and, even had the relevant circumstances been disclosed, they were not such as to affect the outcome of the award; and (ii) if there had there been any breach of the duty of disclosure, it was “minimal”: the arbitrator had submitted an “advance waiver” to the JCAA and the applicant did not make any objection to it. The Osaka High Court on appeal, however, overturned the Osaka District Court’s decision. According to the Osaka High Court, from the perspective of the applicant the non-disclosed fact was critical information bearing on the respondent’s decision whether or not to seek to challenge the presiding arbitrator and should have been disclosed. Moreover, the presiding arbitrator was subject to a duty to investigate whether there were facts to be disclosed by him. Specifically, he was bound to retrieve information that was readily accessible. He could have identified the non-disclosed fact through a conflicts check without any difficulty. This was information he should have disclosed. The Osaka High Court considered that the non-disclosure here was a significant procedural defect which, even on the assumption that it had no direct effect whatsoever on the outcome of the arbitration, triggered the ground for annulment under article 44(1)(vi) of Japan’s Arbitration Act. To ensure the fairness of the arbitral procedure and award and to maintain confidence in the arbitral system, the Osaka High Court held it was necessary to set aside the award.

In December 2017, Japan’s Supreme Court overturned the Osaka High Court’s decision. The Supreme Court agreed with the Osaka High Court as regards the extent of disclosure and the ongoing duty to disclose, and it also agreed that an advanced waiver submitted to the JCAA by the arbitrator was not sufficient to amount to disclosure for the purposes of article 18 of Japan’s Arbitration Act. The Supreme Court, however, did not agree with the standard set by the Osaka High Court. The court held that an arbitrator has a duty to disclose “all the facts that would likely give rise to doubts as to his/her impartiality or independence”[4] if either of the following were true:

  • The arbitrator was aware of such facts.
  • The arbitrator could have normally discovered such facts by conducting a reasonable investigation.

The Supreme Court found that it was unclear whether the arbitrator in this case was aware of the conflict and whether the arbitrator could have discovered the conflict prior to the conclusion of the arbitration, even if the arbitrator had conducted a reasonable investigation. Consequently, the case was remanded to the Osaka High Court for further consideration of these issues.

It is at least debatable here whether the systemic considerations raised by the Osaka High Court, partially supported by Japan’s Supreme Court, ought to trump the interests of the parties in finality, given the possibility of any actual bias on the part of the presiding arbitrator appeared remote. When one considers the time and expense needed to get to the final award, there may be much to be said for an approach like that taken by the Osaka District Court, whereby a set-aside application can be refused on discretionary grounds if the breach is minimal because, for example, it has no direct effect on the outcome of the award. Be that as it may, this case is one where the presiding arbitrator ought to have erred on the side of caution, but failed to do so.



[3] Supreme Court Third Bench decision on 12 December 2017, Case No. Heisei 28 (Kyo) 43. This decision overturned the ruling of the Osaka High Court in X1 and X2 v. Y1 and Y2, Osaka High Court 4th Civil Division 2015 (Wo) No 547, 28 June 2016, Hanrei Times No. 1431, p. 108.

[4] Arbitration Act, Art. 18(4).


Yoshiaki Muto has more than 30 years' experience handling matters related to international disputes and corporate transactions, especially cross-border matters. He is currently head of the Dispute Resolution Group at the Firm's Tokyo office and a member of the Firm's Asia Pacific Dispute Resolution Group Regional Steering Committee. Yoshiaki is also a member of the Registered Foreign Lawyers & International Legal Practice Committee, chair of the International Legal Service Promotion Centre and a member of the SME Outbound Legal Support Working Group of the Japan Federation of Bar Associations. Yoshiaki has been recommended as a dispute resolution practitioner in Japan by PLC Which Lawyer and Global Counsel 3000, and has been recognized as a leading individual in the dispute resolution and crisis management categories by Asia Pacific Legal 500 and Chambers Asia Pacific.


Takeshi Yoshida is a partner in the Firm's Dispute Resolution and Compliance & Investigations groups in Tokyo. He handles international dispute resolution, crisis management and corporate investigations as well as compliance and commercial contracts. He has been recognized as a "Next Generation Partner" in Japan's dispute resolution field by The Legal 500 (2021-2023 editions). His experience includes working at the ICC International Court of Arbitration in Hong Kong and as a panel arbitrator at the Japan Commercial Arbitration Association (JCAA). Since 2015, Takeshi has been teaching business negotiation strategy as a part-time lecturer at Chuo University's Graduate School of Strategic Management (Chuo University Business School). In addition, he is a member of the Tokyo Bar Association, the New York Bar Association, the Chartered Institute of Arbitrators (CIArb) as an MCIArb, the Institute of Internal Auditors (IIA) as a CIA, and the Association of Certified Fraud Examiners (ACFE) as a CFE. Takeshi is fluent in English and Japanese.


Dominic is a member of the Dispute Resolution group at Baker McKenzie's Tokyo office. Having trained and qualified in the UK, he moved to Japan to practice law in 2014, working for a prominent law firm in Tokyo before moving to Baker McKenzie in 2017. Dominic's practice covers a broad range of advisory and contentious work with both Japan-related and international aspects, including international arbitration under the rules of various arbitral institutions, cross border litigation in both the courts of England & Wales and Japan, and compliance-related matters. Dominic advises and represents clients spanning several industries, with a particular focus on healthcare and life sciences and energy, mining and infrastructure.