JAPAN Law and Practice Contributed by: Jumpei Osada, Masaaki Sasaki, Takuto Kobayashi and Hiroshi Ideyama, TMI Associates
poration are still unclear, since there are only a few judgments by the courts on this issue. 6.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Japan is a contracting state to the 1958 New York Convention. Arbitral awards rendered in sig - natory countries of the Convention are enforce - able in Japan, as long as the requirements of the Convention have been fulfilled. Conversely, the enforceability of arbitral awards in non-party states is subject to the conditions set out in the Arbitration Act. The Arbitration Act has very similar provisions to those provided in the 1958 New York Conven - tion. For instance, in cases where the party to an arbitral award attempts to resist its enforcement, the main available grounds are set forth under the Arbitration Act, and are that: • the arbitration agreement is not valid due to the limited capacity of a party, etc; • the arbitration proceedings have serious defects, such as a lack of proper notice or opportunity for defence; • the arbitral award is not valid on the premise that it contains a decision on matters going beyond the scope of the arbitration agree - ment, or the arbitral award is not final and binding, or the arbitral award has been set aside or its effect has been suspended by a judicial body of that country, etc; or • the content of the arbitral award is contrary to public policy in Japan. 6.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction In Japan, it is considered that Japanese courts will issue an arrest order for a vessel if the courts find that the claim in question is secured by a
maritime lien, regardless of whether the claim is subject to a foreign arbitration/jurisdiction clause under the relevant contract/bill of lading. Where the creditors attempt to arrest a vessel by a provisional attachment order, the courts will not allow the creditors to arrest the vessel, unless there is a possibility that a claim which is subject to a foreign arbitration/jurisdiction clause, and which will eventually be awarded or judged by foreign arbitration or courts, is legally enforced in Japan. 6.5 Domestic Arbitration Institutes The Tokyo Maritime Arbitration Commission (TOMAC), which is located in the Japan Ship - ping Exchange (JSE), is the only arbitral tribunal in Japan for resolving shipping disputes. It has a long history and a prestigious reputation, in particular with regard to disputes relating to the NIPPONSALE contract. The TOMAC is recog - nised as being the most popular choice for deal - ing with shipping issues. The TOMAC has drawn up three types of arbitra - tion rules: • Ordinary Rules; • Simplified Rules (claims up to JPY20 million); and • Small Claims Arbitration Procedure (SCAP) Rules (claims up to JPY5 million). These rules all have a basic concept that, the smaller the claim amount is, the lower the costs that will be borne by the arbitration and the quicker the arbitration proceedings are resolved. The average length of arbitration proceedings is about 13 months under the Ordinary Rules, three to five months under the Simplified Rules and five to ten weeks under the SCAP Rules.
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