JAPAN Law and Practice Contributed by: Shinichiro Yamashita and Naruku Okamoto, Hiratsuka & Co
3. Arbitration in Insurance Disputes 3.1 Recognition of Arbitration Clauses in many cases, arbitration clauses in insurance and reinsurance contracts are valid arbitration agreements under the Arbitration Act of Japan. Therefore, Japa- nese court will recognise and upheld the arbitration clause. However, please see 2.4 Anti-Suit Injunctions regarding exceptions. 3.2 Enforcement of Arbitral Awards A claimant that intends to process a civil enforcement in Japan based on an arbitral award must obtain an Enforceability Order. This regulation is applied equally to cases where the place of arbitration is in Japan and out of Japan. The requirements for an Enforceability Order are substantially the same as those provided in the New York Convention. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration clauses are not commonly used in insur- ance and reinsurance contracts in Japan. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes In its “Report by the Expert Panel on Structural Issues and Competition in the Non-Life Insurance Industry”, the Financial Services Agency (FSA) calls for improve- ments in the handling of fraudulent claims. The “Guidelines on Insurance Claims Payments” issued by the General Insurance Association of Japan also set out provisions regarding the handling of fraudulent claims, investigation systems and the use of experts. It can therefore be said that tackling fraudulent claims is becoming a trend. To address fraudulent claims, insurers may engage experts to contest them, such as loss adjusters. Poli- cyholders may be required to provide objective evi- dence, such as dashcam footage. 4.2 Policy Wordings and Interpretation Developments When interpreting insurance policy wordings, Japa- nese courts tend to take the wording as the starting
(Supreme Court judgment of 28 November 1975 Min- shu 29.10.1554). As long as these requirements are satisfied, international jurisdiction clauses are upheld in practice. Such clauses are widely seen in business sectors with international elements. 2.3 Cross-Border Disputes and Conflicts Issues Generally, jurisdiction issues and/or choice of law issues are not raised in cross-border insurance dis- putes, as the clauses are normally clear. In the area of marine insurance, the following clause is often inserted, which can cause disputes: “English law and practice shall apply as to liability for and settlement of any and all insurance claims. In all other respects, including issues as to the existence and validity of this insurance, this insurance is subject to Japanese law and practice”. 2.4 Anti-Suit Injunctions If a lawsuit is filed in Japan in which the plaintiff breaches a clause stating the exclusive jurisdiction of a non-Japanese court and the defendant disputes the international jurisdiction of the Japanese court, the lawsuit will be dismissed, upon the petition of the defendant, as long as the exclusive jurisdiction clause is considered valid under the Code of Civil Pro- cedure. If a lawsuit is filed in Japan in which the plain- tiff breaches an arbitration clause and the defendant disputes the jurisdiction of the Japanese court, the lawsuit will be dismissed, unless the arbitration agree- ment is invalid, it is impossible to carry out an arbitra- tion procedure based on the arbitration agreement, or a dismissal petition is filed after the defendant has presented oral arguments concerning the merits or made statements concerning the merits in prepara- tory proceedings. Japanese courts may not issue anti-suit relief or anti- arbitration relief. 2.5 AI-Related Dispute Resolution and Jurisdiction There are no trends or developments in how Japanese courts approach jurisdiction and choice of law in dis- putes involving AI systems.
167 I NSURANCE L I T IGATI O N 2026
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