JAPAN Law and Practice Contributed by: Hiroki Wakabayashi, Kenichi Sadaka and Kei Akagawa, Anderson Mori & Tomotsune
12. Alternative Dispute Resolution (ADR) 12.1 Views of ADR Within the Country In the context of international dispute resolu- tion, the popularity of arbitration is rising. For domestic disputes, mediation presided over by the court and mediation offered by industrial associations (eg, the Security Company Asso- ciation) are popular. In general, the government encourages and promotes the use of ADR, par- ticularly in specific industries such as financial trading. In addition, the government published an action plan for online dispute resolution pre- sided over by private organisations (ie, NPOs) in March 2022, which is expected to function as a more easily accessible and less expensive form of ADR, especially for disputes involving smaller amounts. 12.2 ADR Within the Legal System ADR is promoted by a law called the ADR Pro- motion Act. In general, ADR is not compulso- ry. ADR in Japan includes court-administered mediation which is a part of court procedures. While refusal to participate in ADR may not result in sanctions generally, under certain rules of mediation offered by industrial associations, a member of the association (ie, the industry side) is obligated to respond and there is a penalty for unreasonable refusal. A recent amendment to the ADR Promotion Act introduced a significant development: set- tlement agreements (excluding those involving domestic, consumer, or individual labour dis- putes) reached through mediation administered by a certified ADR business operator, in which the obligor consents to compulsory execution, can now be enforced through a court’s enforce- ability order.
For international mediations, the Act for Imple- mentation of the United Nations Convention on International Settlement Agreements Resulting from Mediation (the Singapore Convention on Mediation) establishes a comparable enforce- ment mechanism for qualifying international settlement agreements reached through such mediations. 12.3 ADR Institutions As mentioned in 12.1 Views of ADR Within the Country , certain forms of ADR are offered and promoted by industrial associations and those associations are well organised. For international arbitrations, the Japan Commercial Arbitration Association provides standard international arbi- tration institution services. In November 2018, the Japan International Mediation Center in Kyoto (JIMC-Kyoto) was established to provide world-class mediation services for various kinds of cross-border dis- putes between foreign and Japanese parties. 13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration The Arbitration Act (Act No 138 of 2003), which was enacted based on the UNICITRAL Model Law (1985), governs how arbitrations are con- ducted, and the recognition or enforcement of arbitral awards. 13.2 Subject Matters Not Referred to Arbitration An arbitration agreement is enforceable only when the subject thereof is a civil dispute (excluding those related to divorce or dissolu- tion of adoptive relationships) that can be settled between the parties (Article 13(1) of the Arbitra-
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