In their first amendment since 2004, new JCAA Commercial Arbitration Rules (hereinafter, "Rules") came into effect on February 1, 2014.
One of the new features introduced by the Rules is the Emergency Arbitrator system, which allows a party to request that interim measures be taken by an Emergency Arbitrator ("Emergency Measures") before an arbitral tribunal is constituted. The Emergency Arbitrator is appointed within two business days of the receipt of a legitimate application and is required to render a decision within two weeks from the date of appointment. A party can apply for an Emergency Arbitrator even before submitting the Request for Arbitration. This early timing is also a feature of the ICC Rules; the SIAC and HKIAC Rule, by contrast, do not allow a party to apply for an Emergency Arbitrator prior to filing a Notice of Arbitration. In this respect, an Emergency Arbitrator at the JCAA is more favorable to claimants than other popular Asian arbitral institutions such as the SIAC or HKIAC. If a party files an early application for an emergency arbitrator, it has to file a Request for Arbitration within 10 business days from the date of the early application. One of the problems to be solved in the future is that the Japanese Arbitration Act does not recognize the enforceability of Emergency Measures. In the near future, the Act should be amended to address this deficiency to provide support for the new Emergency Arbitrator system and make it more competitive with other international arbitration institutions or place of arbitration.
The Rules also feature amendments to the rules related to interim measures by arbitral tribunals and expedited procedures. The Rules specify the types of orders and the requirements for interim measures by arbitral tribunals in accordance with amendments adopted in 2006 to the UNCITRAL Model Law on International Arbitration. Expedited procedures were formerly only available in cases involving requests for relief of up to JPY20,000,000 (aprox.USD200,000). However, under the new Rules, a party can apply for an expedited procedure as long as the parties agree in writing within two weeks from the date of receipt of the Request for Arbitration regardless of the amount relief requested. This means that use of expedited procedures at the JCAA will expand in the future. The time limit for an expedited procedure is 3 months, which is the same period as in the other prominent Asian arbitral institution rules.
The new mediation rules are another noteworthy amendment. Originally there were no rules regarding mediation. Under the new Rules, "The Parties, at any time during the course of the arbitral proceedings, may agree in writing to refer the dispute to mediation proceedings under the International Commercial Mediation Rules of the JCAA." At the same time, the new Rules prohibit ex parte communication between the parties, and the use of proposals, admissions, or other statements made by parties or arbitrators during a mediation procedure as evidence. Mediation will now be a clear option for parties to JCAA arbitration.
The new Rules also include i) relaxation of the requirements for written evidence submitted during procedures (CR-ROMs, removable disks or dated files attached to e-mails will be permitted), ii) broadening of the means by which notice can be provided, such as by e-mail or facsimile, iii) respect for the language of a contract when it comes to deciding the language to be used during proceedings, iv) modernizing of the requirements for the consolidation of claims or counterclaims, v) introduction of third party joinder to arbitration proceedings, vi) reinforced guaranty of third neutral nationality in the appointment of a president arbitrator or sole arbitrator, vii) procedures for accelerated and proper arbitration. These updates have completely brought up to date with the latest international standards in institutional arbitration rules.
On the other hand, scrutiny of awards was not adopted under the Rules. In JCAA practice, the case manager will usually indicate to the arbitrators any manifest defects in an arbitral award. In my opinion, the JCAA should have provided for scrutiny of awards under the Rules to reflect this practice and enhance the trust of users in arbitration at the JCAA, even if scrutiny is limited to formal issues rather than substantial ones.
The number of arbitration cases handled by the JCAA has historically been at low at around 20 a year. Hopefully, the Rules will trigger greater use of the JCAA by international companies with arbitration clauses. The JCAA's cutting-edge rules make it deserving of a better reputation.