All questions

Dispute resolution

i Special jurisdiction

Generally, litigation at court is the most popular dispute resolution procedure. Although there is no special jurisdiction of special courts for projects and construction disputes, district courts in Tokyo and Osaka have a section called the building division. Nonetheless, foreign investors should note that Japanese courts, even those with building divisions, are generally not familiar with expert analysis on delay because there are almost no experts in this area. District courts also provide court-sponsored mediation services (private mediation services are rarely used in any of the industry sectors).

ii Arbitration and ADR

The CBA designates the 'construction dispute board' (CDB) as the government-sponsored alternative dispute resolution (ADR) procedure (Article 25, CBA). There are local CDBs and a central CDB. The jurisdiction of each CDB is determined by the registered office of the claimant or the construction site in question. Central and local governments appoint a panel of mediator-arbitrators. The CDB is not frequently used as an instrument in international construction practices, but is a kind of conciliation tool purely formulated for domestic disputes. It is not advisable for foreign investors to rely too much on the CDB procedure.

The most widely recommended dispute resolution is arbitration. Although arbitration is seldom used for domestic disputes in Japan, the Arbitration Act (Act No. 138 of 2003, as amended) is modelled after the 1985 UNCITRAL Model Law. The Japan Commercial Arbitration Association is the most reliable national arbitration institution, but any foreign arbitration institution can be chosen instead. The language of arbitration is English.