It has recently been announced that a new "Japan International Mediation Centre" (JIMC) is to open in Kyoto. Mediation is a form of alternative dispute resolution (ADR) in which an independent third party helps both sides to a dispute come to a negotiated settlement. The opening of a new centre dedicated to resolving international commercial disputes by this method is an interesting – and welcome – addition to the international dispute resolution landscape in Japan. According to reports, the new centre will open in early 2018.
For the time being, details on the new centre are limited. However, we do know that JIMC will be based at Doshisha University and opened in collaboration with the Singapore International Mediation Centre (SIMC). This gives some clues as to how the new centre is likely to operate.
JIMC and SIMC
SIMC was launched in Singapore in 2014 to provide mediation services for parties involved in cross-border commercial disputes. It provides a structured environment in which to mediate:
- It has written a set of Mediation Rules which apply to all mediations which it administers. These rules deal with mainly logistical matters, such as how a mediator should be appointed, what happens if the parties cannot agree the identity of the mediator, what documents should be submitted in advance of the mediation, and so on.
- It maintains a panel of over 70 individuals who can act as mediator. Whilst a party can appoint someone not on the panel, the individuals on the panel are mostly, if not all, accredited mediators who have to go through a rigorous admission process.
- It has over 65 technical experts who can assist the mediator when a technical question comes up.
It is likely that JIMC will follow a similar approach – we know that SIMC is intending to help JIMC establish its own panel of mediators, for example. SIMC will also:
- Work with JIMC to promote international commercial mediation in Japan through joint lectures, conferences and seminars.
- Raise the quality of international commercial mediation in Japan through the training of mediators and advocates.
Use of the facility for mediation of international disputes
Much has been written about the reluctance of Japanese companies to resort to arbitration or litigation, and their preference for settling disputes rather than fighting them. It appears that the new centre in Kyoto will seek to exploit this. The press release announcing the new JIMC notes that "seeking privately negotiated settlements is a fundamental characteristic of the Japanese culture" and at the launch ceremony, members of SIMC expressed the view that there was the great potential for adoption of mediation in Japan.
In this context, we note with interest that the centre appears to be positioned as a place where international disputes are mediated. Whilst we envisage Japanese companies will lead the drive to use JIMC, by its nature mediation requires cooperation to be an effective method of dispute resolution. Where a non-Japanese counterparty is involved in a dispute with a Japanese company, it will be interesting to see whether they co-operate to make use of the new centre in the opposing side's home territory.
One way to ensure use of the new centre would be for parties to agree in their contracts to mediate at JIMC before starting litigation or arbitration. SIMC has a 'model clause' along these lines on its website for parties to drop into their contracts, and we expect JIMC to draft something similar.
Tie-up with an arbitral institution
Mediation usually takes place alongside, rather than instead of, litigation or arbitration. The unique selling point of SIMC is perhaps its novel tie-up with the Singapore International Arbitration Centre (SIAC) to offer a hybrid protocol known as "Arb-Med-Arb", which works as follows:
- Parties to a contract may agree to a SIAC/SIMC Arb-Med-Arb protocol in their dispute resolution clause, or alternatively, when an arbitration has been commenced at SIAC, the parties to that arbitration can agree to mediate the dispute using SIMC. The SIAC arbitration is then paused to allow the mediation process to play itself out.
- If the mediation is a success, the parties' agreement can be recorded as a consent award in the SIAC arbitration, which is generally accepted as an arbitral award, and subject to any local legislation and/or requirements, is enforceable in the approximately 150 New York Convention member states.
- If the mediation is not a success, the SIAC arbitration will resume. If only part of the dispute has settled, the arbitration will resume in respect of the unsettled part.
Please refer to our Arbitration Notes blog post here for further details on the Arb-Med-Arb protocol.
The press release announcing JIMC is silent as to whether any such collaboration is envisaged between JIMC and the Japan Commercial Arbitration Association (the leading Japan-based arbitral institution), or any other arbitral institution. Such collaboration is not essential by any means, but it may help to attract users to the new centre.
Increase in Japan's international dispute resolution capabilities
Lastly, this announcement follows reports in the summer of 2017 that the Japanese government is proposing to open a dedicated arbitration facility in Tokyo ahead of the Olympics in 2020. That proposal, together with the launch of this new mediation centre, suggests an increase in Japan's ambitions and capabilities when it comes to matters of international dispute resolution.