Critically consider the legal issues that must be taken into account when an exporter is attempting to penetrate a new foreign market.

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International Trade and Finance Law

4 FBL 602

Critically consider the legal issues that must be taken into account when an exporter is attempting to penetrate a new foreign market

Laura Geron (00145221B)

The following is an attempt to make exporters aware of certain particularities of the Japanese Arbitration Law. Arbitration is a dispute resolution system that provides an alternative to the courts. In a typical arbitration, parties select one arbitrator each, and the two arbitrators select a third arbitrator to create a panel of three arbitrators to hear testimony and render an award. Arbitration has become increasingly popular in recent years because many lawyers believe that arbitration saves time and money by avoiding the crowded courts.

 Each country has domestic laws that apply directly to both imports and exports.Much of English Law is based on the 'Common Law' principle. Its principles appear for the most part in reported judgments, usually of the higher courts, in relation to specific fact situations arising in disputes which courts have adjudicated. The common law is usually much more detailed in its prescriptions than the civil law. Japan has a civil law system based on the model of Roman law.

A common law equity clause in an arbitration agreement "purports expressly to dispense the arbitrator from applying the law either wholly or in part." In civil law, these are called amiable compositeur clauses. While strict equity clauses are suspect in England, amiable compositeur clauses are generally permitted in civil law jurisdictions and are found in civilian codes.

Exporters have to comply with the export laws of their own country and the import laws of the target market. In addition, they must also abide by whatever international laws apply to their transactions, as well as any other domestic laws that reach out from home to affect their activities overseas (e.g. antitrust, foreign corrupt practices).

Currently in Japan, the most relevant commercial arbitration institution is the Japan Commercial Arbitration Association(JCAA), Inc. (Kokusai Shoji Chusai Kyokai).  The other two arbitration groups deal with maritime and construction subject matter. Under the Japanese Civil Law, only matters, which can be presented to a court of law, can be arbitrated. It should be noted that overseas arbitration awards could be directly enforced in Japan without obtaining a judicial order under the Japan-American Trade Arbitration Agreement (1952).

Arbitral proceedings are initiated when the claimant submits to the JCAA a written request for arbitration.  (See appendix I)

The written request for arbitration must set forth each of the following matters:

  • A demand that the dispute be referred to arbitration under the Rules;
  • A reference to the arbitration agreement that is invoked;
  • the full personal or corporate names of the parties and their addresses;
  • If the claimant is represented by an agent, the name and address of such agent the relief or remedy sought;
  •  A summary of the dispute;
  • and the basis for the claim and the manner or method of proof.

The written request for arbitration shall be accompanied by the following documents:

  • a copy of the arbitration clause or the separate arbitration agreement containing the arbitration agreement;
  •  a power of attorney of an agent

Arbitral awards made in Japan are guaranteed under the Japanese arbitration law.
On the other hand, the enforcement in Japan of awards rendered in foreign treaty countries are also guaranteed by the multilateral treaties: "the Geneva Convention of 1927" and “the New York Convention of 1958", both of which Japan is a signatory to.

 Conversely, the enforcement of arbitral awards made in Japan is guaranteed in foreign treaty countries. Japan also has bilateral treaties with 13 countries and these treaties guarantee the enforcement in other treaty countries of arbitral awards rendered in Japan. They also guarantee the enforcement in Japan of arbitral awards made in other treaty countries.
To date, there has been no case where Japanese court of law did not approve of and enforce foreign arbitral awards.

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In September 1996, the Foreign Lawyers Law was amended to allow, for the first time, foreign lawyers to represent clients in Japan during international arbitration proceedings.  This was passed in the House of Representatives and was promulgated as Law No. 65 of 1996 on June 12, 1996

International arbitration proceedings are not widespread in Japan and it is not often that claimants from non-Japanese countries decide on arbitration in this country. The main reason why arbitration is conducted in Japan is that one of the parties is Japanese, and that in the beginning of a transaction the Japanese party had insisted on ...

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