Outline of the Japanese Arbitration Act
Shunichiro Nakano / Boting Ruan
I. Introduction
The old Japanese law on arbitration was enacted in 1890 as part of the Code of Civil Procedure, under the strong influence of the German Code of Civil Procedure of 1877. The new Arbitration Act (Act No. 138 of 2003) was promulgated on 1 August 2003 and came into effect on 1 March 2004. Although the Arbitration Act is modeled on the 1985 UNCITRAL Model Law on International Commercial Arbitration (“the Model Law”), it differs in several respects. Furthermore, the Arbitration Act adopts some original rules tailored to Japan’s particular circumstances, such as provisions regarding consumer protection and labor issues.
II. Territorial Application of the Arbitration Act
In contrast with the Model Law, the Arbitration Act does not distinguish between international and domestic arbitration. Art. 1 of the Arbitration Act merely stipulates that arbitration proceedings are required to follow its provisions "where the place of arbitration is in the territory of Japan". Furthermore, Art. 3 prescribes that the provisions of the Act will, with certain exceptions, be "applicable when the place of arbitration is in the territory of Japan". As such, the majority theoretical view in regard to the old law, which was that it allowed parties autonomy in determining the governing law for arbitration proceedings, is rejected under the Arbitration Act. However, in practical terms, the parties are virtually free to designate the governing law of the proceedings by choosing a state that differs from the location of the hearings as the place of arbitration.
Some provisions, such as articles regarding interim measures imposed by the court and recognition and enforcement of arbitral awards, can be applied even if the place of arbitration is not in Japan (Art. 3(2), (3)).
III. Arbitration Agreement
1. Law Applicable to Arbitration Agreement
Under the old law, Japanese theory and practice allowed the parties the freedom to choose the law governing an arbitration agreement. Both Art. 44(1)(ii) and Art. 45(2)(ii) of the Arbitration Act follow the Model Law in allowing the parties autonomy in determining the law applicable to an arbitration agreement within the context of setting aside or executing arbitral awards. For contracts in general, Art. 7 of the Japanese Act on the General Rules of Application of Laws [formerly known as Horei] provides for the parties’ agreement on the applicable law. Furthermore, if a choice of law clause is incorporated in a contract, it will be construed as incorporating an agreement on the law governing the arbitration agreement [Tokyo District Court Judgment of 28 August 2007]. If there is no choice of law agreement between the parties as regards the arbitration agreement, the law of the place of arbitration will apply (Arts. 44(1)(ii) and 45(2)(ii)).
In Japanese practice, the arbitration clause incorporated in an agreement often stipulates that the claimants will refer their disputes to arbitration in the defendant’s domicile. The Supreme Court of Japan has held that in such cases, the law of the hypothetical place of arbitration will be applied when determining the effect of an arbitration agreement under the old law [Supreme Court Judgment of 4 September 1997].
2. Arbitrability
According to Art. 13(1) of the Arbitration Act, unless otherwise provided by law, an arbitration agreement will be valid “only when its subject matter is a civil dispute that may be resolved by settlement between the parties”. While the revised Act on Procedure in Matters of Personal Status[Jinji Sosho Ho] (Act No. 109 of 2003) permits the settlement of matters such as divorce or annulment of an adoption agreement by court proceedings, the arbitrability of such matters is explicitly denied. Art. 44(1)(vii) and Art. 45(2)(viii) of the Arbitration Act provide, as one of the grounds for setting aside or refusing to enforce an arbitral award, that some subject matters of the dispute are not capable of settlement by arbitration "under the laws of Japan". In other circumstances, a dispute is likely to be held to be arbitrable under Art. 13(1) if the place of arbitration is regarded as being in Japan. If the place of arbitration is not in Japan, it would be appropriate to determine arbitrability in accordance with the lex loci arbitrii, to the extent that this would not be contrary to Japanese public policy.
3. Form
Art. 13(2) of the Arbitration Act requires, in regard to the form, that an arbitration agreement be in writing, which includes arbitration agreements prepared by means of electromagnetic records. If a written contract refers to a document that contains an arbitration clause and the purport of the reference is to incorporate that clause in the contract, the arbitration agreement will be regarded as being in writing (Art. 13(3)). An arbitral agreement contained in a standard contract form may also be deemed valid [Supreme Court Judgment of 26 June 1980].
4. Parties to the Agreement
Whether the parties have the capacity to enter into an arbitration agreement is decided according to the private law in the case of a natural person and in the case of a judicial person, according to the law under which it was incorporated. No restrictions are prescribed as to the persons who may resort to arbitration under the Arbitration Act.
5. Protection of Weak Parties
Arts. 3 and 4 of the Supplementary Provisions to the Arbitration Act provide, as a measure "for the time being until otherwise enacted", that a consumer is entitled to terminate an arbitration agreement. Also, arbitration agreements concerning individual labor-related disputes are null and void. However, Art. 3 may not be relied on to deny the effect of a consumer arbitration agreement which was concluded before the Arbitration Act came into effect [Nagoya District Court Judgment of 28 September 2005].
Since Art. 3 of the Arbitration Act, which defines the territorial scope of application of the Act, is to be interpreted as incorporating the Supplementary Provisions, Arts. 3 and 4 of the Supplementary Provisions will apply if the place of arbitration is in Japan. Art. 4 may not be relied on to deny the effect of an individual labor arbitration agreement, if it was concluded before the Arbitration Act came into effect and the place of arbitration was not in Japan [Tokyo District Court Judgment of 26 January 2004].
6. Separability
Pursuant to Art. 13(6) of the Arbitration Act, “even if in a particular contract containing an arbitration agreement, any or all of the contractual provisions, excluding the arbitration agreement, are found to be null and void, cancelled or for other reasons invalid, the validity of the arbitration agreement shall not necessarily be affected”. Consequently, the arbitral tribunal may rule on arguments made in respect of the existence or validity of an arbitration agreement or its own jurisdiction (Art. 23(1)). Although the old law lacked an express provision to this effect, the separability of an arbitration agreement has been consistently recognized by the Japanese courts [Tokyo District Court Judgment of 21 October 2005; Intellectual Property High Court Judgment of 28 February 2006].
7. Effect of the Agreement
An action brought to a court with respect to a matter that is subject to an arbitration agreement will be dismissed by the court if the defendant invokes the arbitration agreement as a defense, unless the court finds that the arbitration agreement is null and void, cancelled, or invalid for other reasons, or that arbitration proceedings are incapable of being performed pursuant to the arbitration agreement or the arbitration agreement was invoked subsequent to the presentation of defendant’s statement in the oral proceeding or in preparations for the oral proceeding(Art. 14(1)). The arbitral tribunal may proceed to render an award even while an action is pending in the court (Art. 14(2)).
IV. Arbitrators
1. Qualifications and Number of Arbitrators
According to Art. 16 of the Arbitration Act, the number of arbitrators is to be determined by the parties’ agreement. Failing such agreement, if there are two parties in an arbitration, there will be three arbitrators. If there are three or more parties, the court will determine the number of arbitrators at the request of a party. An arbitral tribunal with more than one arbitrator is required to elect a presiding arbitrator from among all its members (Art. 37(1)).
As there is no express provision regarding the qualifications of arbitrators in the Arbitration Act, there is no obstacle preventing a foreign national from being an arbitrator.
2. Selection of Arbitrators
The parties are free to agree on a procedure to appoint arbitrators (Art. 17(1)). According to the precedents under the old law, an agreement which authorizes one party to grant a third party the power to select arbitrators is valid unless one of the parties is vested with grossly unfair power over the selection of arbitrators [Supreme Court Judgment of 6 September 1984]. An arbitration agreement giving the authority to appoint arbitrators to one party alone is invalid, as it is patently disadvantageous to the other party [Osaka District Court, Interlocutory Judgment of 2 February 1989].
Unless otherwise provided by the parties, when there are two parties in an arbitration with three arbitrators, each party appoints one arbitrator and the two arbitrators appointed in this way then appoint the third arbitrator. If one party fails to appoint an arbitrator within thirty days of the receipt of the other party’s request, the appointment will be made by the court at the request of the other party; if the two arbitrators appointed by the parties fail to agree on the third arbitrator within thirty days of their appointment, the appointment will be made by the court at the request of a party (Art. 17(2)). A party may request that the court appoint an arbitrator for the other party, even if the latter denies the validity of the arbitration agreement and has filed a lawsuit in a foreign court [Tokyo District Court Judgment of 9 February 2005].
In appointing arbitrators, the court will have due regard to:
(i) the qualifications required of arbitrators under the parties’ agreement;
(ii) the impartiality and independence of the appointees; and
(iii) the appropriateness of appointing an arbitrator of a nationality other than those of the parties (Art. 17(6)).
3. Challenges to Arbitrators
An arbitrator may be challenged if circumstances exist that give rise to justifiable doubt as to his or her impartiality or independence, or if he or she does not meet requirements agreed to by the parties (Art. 18(1)). Candidates for appointment as an arbitrator, and arbitrators, are required to fully disclose any circumstances likely to give rise to justifiable doubt as to his or her impartiality or independence (Art. 18(3), (4)).
The procedure for challenging an arbitrator may be determined by the parties’ agreement (Art. 19(1)). If there is no agreed procedure, the arbitral tribunal will decide on the challenge at the request of a party (Art. 19(2)). If the tribunal rejects the request, the challenging party may request that the court decide on the challenge within thirty days of the receipt of the decision, and the arbitral tribunal may continue the proceedings and make an arbitral award while the case is pending before the court (Art. 19(4), (5)).
4. Liability of Arbitrators
While the civil liability or immunity of an arbitrator is not stipulated in the Arbitration Act, some criminal penalties are prescribed in Art. 50 et seq. for certain crimes committed by arbitrators, including the corruption. These rules apply to offenders who commit crimes outside Japan, as long as the place of arbitration is located in Japan.
V. Arbitral Procedures
1. Arbitral Procedures in General
Subject to the mandatory provisions of the Arbitration Act, the rules governing an arbitration procedure may be determined by the parties’ agreement (Art. 26(1)). Designation of an arbitration institution by the parties is generally construed as an agreement on the applicable institutional procedure rules (See Rule 3 of the Japan Commercial Arbitration Association (JCAA) Commercial Arbitration Rules). In the absence of an agreement, the arbitral tribunal may conduct the proceedings in such a manner as it considers appropriate (Art. 26 (2)). In any case, the parties will be treated equally and be given full opportunity to present their cases in the arbitral proceedings (Art. 25).
Unless otherwise agreed by the parties, a party whose procedural rights under the Arbitration Act or the parties’ agreement have been infringed, is required to raise an objection without delay. If there is no objection, he or she will be deemed to have waived the right to object (Art. 27).
The claimant is required to state the relief or remedy sought, the facts supporting the claim and the points at issue within the period of time determined by the arbitral tribunal. If the claimant fails to comply, the tribunal will terminate the arbitral proceedings, except where there is sufficient cause for the claimant’s default (Art. 33(1)). If a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may make the arbitral award based on the evidence in hand (Art. 33(3)).
2. Commencement of Arbitral Proceedings
Unless otherwise agreed by the parties, the arbitral proceedings commence on the date on which one party gives the other party notice of the referral of the dispute to arbitral proceedings (Art. 29(1)). Notice in writing in arbitral proceedings is deemed to have been served at the time when it is delivered to the addressee personally, or, at the time when it is delivered to the addressee's domicile (Art. 12(1)). Where necessary, court assistance can be provided in serving written notices in arbitral proceedings, regardless of where the place of arbitration is located (Art. 12(2)).
3. Place of Arbitration
The place of arbitration may be determined by the parties’ agreement. If there is no such agreement, it will be determined by the arbitral tribunal, having regard to the circumstances of the case including the convenience of the parties. Unless otherwise agreed by the parties, the arbitral tribunal may conduct procedures including meetings of the tribunal members, hearings or the inspection of goods at any place which it considers appropriate, irrespective of the place of arbitration (Art. 28). The arbitral award is deemed to have been made at the place of arbitration (Art. 39(4)).
4. Interruption of Extinctive Prescription
Under Art. 149 of the Civil Code, extinctive prescription is interrupted by a claim in a court proceeding. Theory and practice have generally been in favor of the analogous application of this provision to a claim in an arbitration proceeding. Consequently, Art. 29(2) of the Arbitration Act, which has no equivalent in the Model Law, provides that “a claim made in arbitral proceedings shall give rise to an interruption of limitation, provided that this shall not apply where the arbitral proceedings have been terminated for a reason other than the issuance of an arbitral award.” This article will apply if the arbitration agreement is governed by Japanese law.
5. Language
The language to be used in the arbitration proceedings may be determined by the parties’ agreement.In the absence of an agreement, the arbitral tribunal will determine the matter (Art. 30).
6. Oral Hearings
The arbitral tribunal may hold oral hearings for the presentation of evidence or oral arguments by the parties. However, if a party makes an application for the holding of oral hearings, the arbitral tribunal will hold the oral hearings at an appropriate stage of the proceedings (Art. 32(1)). The arbitral tribunal is required to give sufficient advance notice to the parties of the time and place of such oral hearings (Art. 32(3)).
7. Evidence and Experts
In the absence of the parties’ agreement, the admissibility, relevance, materiality and weight of any evidence may be determined by the arbitral tribunal (Art. 26(3)).
Unless otherwise agreed by the parties, the arbitral tribunal or a party may apply for the assistance of a Japanese court in taking evidence by any means that the arbitral tribunal considers necessary (e.g. the examination of witnesses, the taking of expert testimony, the investigation of documentary evidence or inspections), if the place of arbitration is in Japan. The party is required to obtain the approval of the arbitral tribunal when making the application (Art. 35(1),(2)). During the court’s examination of evidence, the arbitrators may peruse documents, inspect objects and, with the approval of the presiding judge, put questions to witnesses or experts (Art. 35(5)).
Unless otherwise agreed by the parties, the arbitral tribunal may appoint one or more experts to appraise specific issues and to report their findings in writing or orally. The arbitral tribunal may require a party to give the expert any relevant information, or to provide relevant documents, goods or other property to the expert for inspections (Art. 34(1), (2)).
8. Competence to Rule on Jurisdiction (Kompetenz-Kompetenz)
The arbitral tribunal may decide the existence or validity of an arbitration agreement or its own jurisdiction (Art. 23(1)). It is required that an objection to the tribunal’s jurisdiction be raised promptly where the grounds for the objection arise during the course of arbitral proceedings, or, in other circumstances, before the time at which the first written statement is submitted to the tribunal (Art. 23(2)). If the arbitral tribunal considers it has jurisdiction, it will issue a preliminary independent ruling or an arbitral award in the matter. Otherwise, the arbitral tribunal will order the termination of the proceedings (Art. 23(4)). Any party may raise an objection to the court against a preliminary ruling affirming the tribunal’s jurisdiction within thirty days of the receipt of the notice of the ruling. The arbitral tribunal may continue the proceedings and make an arbitral award while the objection is pending before the court (Art. 23(5)). In this situation, the court is not permitted to issue a preliminary injunction ordering the suspension of an arbitral proceeding [Tokyo High Court Judgment of 5 March 1962].
9. Interim Measures of Protection
The arbitral tribunal may, at the request of a party, grant any party such interim measures of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute (Art. 24(1)). It is not incompatible with an arbitration agreement for a party to request that a court, before or during arbitral proceedings, consider granting an interim protective measure, and for a court to grant that relief in respect of any civil dispute which is the subject of the arbitration agreement (Art. 15). However, the jurisdiction of the Japanese courts may be denied if the provisional relief sought is not related to the property situated in Japan and the place of arbitration is not in Japan [Tokyo District Court Judgment of 28 August 2007].
The Arbitration Act contains no express provisions on the execution of provisional remedies ordered by the arbitral tribunal, and this is understood to mean that such an order would be unenforceable.
10. Foreign Lawyers
The Arbitration Act contains no express provisions on representation and legal assistance in arbitral proceedings. The practice of law by a person who lacks the qualifications of a practicing lawyer in Japan is strictly prohibited under the Lawyers Act [Bengoshi Ho], (Art. 72). The Act on Special Measures for the Handling of Legal Business by Foreign Lawyers (Foreign Lawyers Act) [Gaiben Ho] was amended in 1996 to alleviate the harshness of this provision. Under the new Article 58-2 of the Foreign Lawyers Act, foreign lawyers practicing outside Japan are allowed to represent a party in an international arbitration.
11. Termination of Arbitral Proceedings
Arbitral proceedings are terminated by the arbitral award or by a ruling of the arbitral tribunal to terminate the proceedings (Art. 40(1)). A ruling to terminate arbitral proceedings will be issued where (a) the arbitral tribunal considers it has no jurisdiction (Art. 23(4)(ii)); (b) the claimant does not state the relief or remedy sought, the facts supporting its claim and the points at issue within the period of time determined by the arbitral tribunal (Arts. 31(1), 33(1)); the claimant withdraws the claim; the parties agree on termination of the proceedings; the parties settle the dispute; or the arbitral tribunal finds that the continuation of the proceedings has become unnecessary or impossible (Art. 40(2)). The mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings (Art. 40(3)).
VI. Arbitral Awards
1. Law Governing Disputes
The arbitral tribunal decides the substance of a dispute in accordance with rules of law designated by the parties (Art. 36(1)). The “rules of law” is a broad concept which includes non-national laws or lex mercatoria.
In the absence of the parties’ agreement, the law of the state with which the dispute has the closest connection will be applied (Art. 36(2)). Although the concrete meaning of the term "closest connection" is yet to be clarified, the outcome will be consistent with the application of the rules of the Japanese Act on the General Rules of Application of Laws [formerly known as Horei] since Art. 8(1) of the latter also provides for the application of the law of the state "with which the contract is most closely connected". If there is no choice of law agreement between the parties, the application of non-national laws is not allowed.
Article 36(3) gives effect to an agreement of the parties to have the arbitral tribunal decide ex aequo et bono, though such agreements are not common in Japanese practice. The arbitral tribunal decides each case in accordance with the terms of the contract and takes the usages that may apply to the dispute into account (Art. 36(4)). While the Model Law uses the term “usages of the trade,” the Arbitration Act, in light of its broader field of application, allows for “usages” in general to be taken into account. Furthermore, the phrase “in all cases” was deleted to clarify that a decision made ex aequo et bono can, as the case may be, take precedence over the contractual terms.
2. Making of Arbitral Awards
Procedural matters in arbitral proceedings may be decided by the presiding arbitrator, if so authorized by the parties or all other members of the arbitral tribunal. In other circumstances, decisions of the arbitral tribunal are made by a majority of all its members (Art. 37(2), (3)).
Arbitral awards are made in writing and signed by the arbitrators. The signatures of the majority of the arbitral tribunal are sufficient, if the reasons for any missing signature are stated (Art. 39(1)).
Unless otherwise agreed by the parties, the reasons for an arbitral award must be stated in the award (Art. 39(2)). According to court decisions under the old law, arbitral awards will be considered as being sufficiently well grounded if the parties are fully aware of the process by which the arbitrator reached the conclusion, unless the grounds for the arbitral award are too irrational or contradictory to be understood [Tokyo District Court Judgment of 16 February 1989; Tokyo District Court Judgment of 26 January 2004].
A statement of the date and place of arbitration is also required to be included in an arbitral award (Art. 39(3)).
Copies of an award are sent to the parties (Art. 39(5)). Neither the registration nor the deposit of an arbitral award is required under the Arbitration Act.
3. Settlements
The arbitral tribunal may try to settle the dispute with the written consent of all parties (Art. 38(4), (5)). If the parties settle the dispute during the proceedings, the arbitral tribunal may, at the request of the parties, make an arbitral award based on the terms agreed (Art. 38(1), (2)).
4. Correction of Arbitral Awards
An arbitral tribunal may, at the request of a party or by its own authority, correct errors in computation, clerical or typographical errors or errors of a similar nature in an arbitral award. The request must be made within thirty days of the receipt of the notice of the arbitral award (Art. 41(1), (2)).
5. Interpretation of Arbitral Awards
A party may request that an arbitral tribunal give an interpretation on a specific part of the arbitral award, limited to where all parties consent (Art. 42(1), (2)).
6. Additional Arbitral Award
A party may request that an arbitral tribunal make an arbitral award regarding claims presented in the proceedings but omitted from the final award. The arbitral tribunal is required to make a ruling on the request within sixty days of the receipt of the request (Art. 43(1), (2)).
VII. Setting Aside of Arbitral Awards
According to Art. 44(1)(vi), a court may set aside an arbitral award at the request of a party, if the party furnishes proof that:
(i) the arbitration agreement is not valid due to a party's incapacity;
(ii) the arbitration agreement is not valid, under the law agreed on by the parties, for a reason other than a party's incapacity (or failing such agreement, under the law of Japan);
(iii) the party was not given notice in the proceedings to appoint arbitrators or in the arbitral proceedings;
(iv) the party was unable to present its case in the arbitral proceedings;
(v) the arbitral award contains decisions on matters beyond the scope of the arbitration agreement or the claims in the arbitral proceedings;
(vi) the composition of the arbitral tribunal or the arbitral proceedings was not in compliance with the parties’ agreement or the provisions of Japanese laws.
A court may further set aside the award on its own discretion if:
(vii) the claims in the arbitral proceedings relate to a dispute that may not be submitted to arbitration under the laws of Japan; or
(viii) the content of the arbitral award is contrary to the public policy of Japan.
An application for setting aside the arbitral award may not be made where three months have elapsed from the party’s receipt of their copy of the award, or after an enforcement decision (Art. 46) has become final and conclusive (Art. 44(2)).
VIII. Enforcement of Arbitral Awards
1. New York Convention and Adoption of the Model Law
Along with several bilateral treaties containing provisions on mutual recognition and enforcement of arbitral awards, Japan has ratified the Geneva Protocol of 1923, the Geneva Convention of 1927, the New York Convention of 1958 and the International Centre for Settlement of Investment Disputes (ICSID) Convention of 1966. In terms of the application of the New York Convention, the enforcement of foreign arbitral awards has never, to date, been denied in the Japanese courts [Nagoya District Court (Ichinomiya Branch) Judgment of 26 February 1987; Tokyo District Court Judgment of 27 January 1994; Tokyo District Court Judgment of 19 June 1995; Yokohama District Court Judgment of 25 August 1999].
Arts. 45 and 46 of the Arbitration Act introduce provisions which essentially correspond to Articles IV - VI of the New York Convention as well as Articles 35 and 36 of the Model Law. These new provisions apply not only to foreign arbitral awards, but also to domestic awards. In effect, these provisions result in the withdrawal of the reciprocity reservation declared by Japan under Article I(3) of the New York Convention.
2. Binding Effect of Arbitral Awards
Art. 45(1) of the Arbitration Act provides that an arbitral award has the same effect as a final and conclusive judgment “irrespective of the country in which it was made”. Under this provision, the nationality of the award will not be an issue. An agreement between the parties to the effect that an arbitral award will not be final and binding on them is invalid [obiter dictum, Tokyo District Court Judgment of 26 January 2004].
3. Enforcement Decisions
Civil execution of an arbitral award is effected, according to Art. 22(6)(ii) of the Civil Execution Act, by virtue of “an arbitral award accompanied by an enforcement decision which has become final and conclusive”. A party seeking enforcement of an award may apply to a court for an enforcement decision by submitting a copy of the arbitral award, a document certifying the authenticity of the copy, and a Japanese translation of the award (Art. 46(1),(2)). For recognition and enforcement of a foreign arbitral award, it is not required that the foreign award be accompanied by an exequatur rendered by the court of the place of arbitration.
The grounds for refusing an application for the enforcement of an arbitral award are virtually the same as those for setting aside an arbitral award. The court may dismiss the application if the defendant furnishes proof that:
(i) the arbitration agreement is not valid due to a party's incapacity;
(ii) the arbitration agreement is not valid, under the law agreed on by the parties, for a reason other than a party's incapacity (or in the absence of an agreement, under the lex loci arbitrii);
(iii) the party was not given notice of the proceedings to appoint arbitrators or the arbitral proceedings;
(iv) the party was unable to present his or her case in the arbitral proceedings;
(v) the arbitral award contains decisions on matters beyond the scope of the arbitration agreement or the claims in the arbitral proceedings;
(vi) the composition of the arbitral tribunal or the arbitral proceedings was not in compliance with the parties’ agreement or provisions of the lex loci arbitrii;
(vii) the arbitral award has not yet become binding under the lex loci arbitrii (or the applicable law on arbitration procedure, if it differs from the lex loci arbitrii) or the arbitral award has been set aside or suspended by a court of the place of arbitration.
The court may further dismiss the application, if:
(viii) the claims in the arbitral proceedings relate to a dispute that may not be submitted to arbitration under the laws of Japan; or
(ix) the content of the arbitral award is contrary to the public policy of Japan (Arts. 45(2), 46(7), 46(8)).
Under the old law, an “enforcement judgment” was required for the execution of an arbitral award, which inevitably entailed time-consuming oral hearings. In order to facilitate and expedite enforcement proceedings, the Arbitration Act has reduced the requirement to that of a "decision". However, a court may not make a decision unless an oral hearing or an oral proceeding is conducted, which the parties may attend (Arts. 44(5), 46(10)).
An enforcement decision is subject to appeals. Appeals must be filed within two weeks from the day on which the notice of the decision is given (Art. 46(6)).
IX. Fees and costs
1. Arbitrators’ Remuneration
The remuneration for arbitrators may be determined by the parties’ agreement. In the absence of an agreement, the arbitral tribunal will determine the fees (Art. 47).
2. Deposits
The arbitral tribunal may order the parties to deposit an amount determined by the arbitral tribunal for the costs of the proceedings within an appropriate period of time; if the parties fail to comply with the order, the arbitral tribunal may suspend or terminate the arbitral proceedings (Art. 48).
3. Costs of Arbitral Proceedings
Unless otherwise agreed by the parties, each party bears the costs he or she has disbursed with respect to arbitral proceedings. The arbitral tribunal may determine the allocation of the costs between the parties in accordance with any agreement of the parties (Art. 49(1), (2)).