Table Speech


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December 4, 2013

Mr. Shingo Tsuji
President & CEO, Mori Building Co., Ltd.


What is Arbitration?

December 4, 2013

Mr. Hiroshi Yokokawa
President,
The Japan Commercial Arbitration Association


¡¡I think many people are not familiar with the term ¡Ècommercial arbitration.¡É When we look up ¡Èarbitration¡É in the Japanese dictionary, it says ¡Èto intercede and resolve one¡Çs differences in case of a conflict.¡É But in legal terms, ¡Èarbitration¡É refers to a ¡Èdispute-settlement procedure where the two sides select an impartial third party (the arbitrator) and comply with the arbitrator¡Çs decision.¡É What we mean by ¡Èarbitration¡É in our daily conversation meets the legal definition of ¡Èfacilitate reconciliation¡É or ¡Èmediation.¡É

¡¡I must say that even in the business arena, many top executives are still unfamiliar with ¡Ècommercial arbitration,¡É except from those engaged in the legal department. In Western countries, however, ¡Ècommercial arbitration¡É is widely known and it is the most common option to settle business disputes. I must say that the culture of ¡Èarbitration¡É has not yet taken root in Japan.

¡¡When the two sides agree to settle the dispute by arbitration, they choose 1 or 3 arbitrators who serve as the judge. The arbitrator carries forward the procedure that is similar to judicial contest. Our Association provides comprehensive services for the paperwork.

¡¡As there are no such things as judicial districts, arbitration can take place anywhere around the world, depending on where the two sides decide to have it. For example, a Japanese company and US company can have arbitration in London. The working language is also decided by the agreement of both sides. My advice for the Japanese companies is to seek arbitration in Japan rather than overseas. Let me clarify that even if you play the home game, the arbitrator will not take sides with you and the legal decision will be strict and neutral. Let me also advice to give your full attention to the arbitration clause when you prepare a contract, so that you can avoid easy concession and maximize your advantage.

¡¡Once you opt for arbitration, you have no choice but to accept the arbitrator¡Çs decision should you win or lose. The ¡Èarbitration decision¡É is as effective and enforceable as the final decision ruled by the court. In addition, arbitration does not accept appeals, so you can reach a legal solution in a relatively short time and reduce the costs of the dispute-settlement. Talking about cost, the fee paid to the arbitrator should be covered by the parties concerned.

¡¡Let me add one extra information. Our Association undertakes the so-called ¡ÈATA CARNET business¡É in addition to arbitration. ATA Carnet is an international custom-free document that allows its holder to export goods temporarily to foreign countries. We issue this document to avoid troubles at customs clearances when you bring your professional instrument, including articles on exhibitions, sample products, press equipments or musical instruments. You might recall the trouble at the customs about a year ago, when a renowned violinist tried to bring her Stradivarius violin.

¡¡As I close my speech, I confess I serve as the Chairman of the Japan Association of Athletics Federations from this June, in addition to my daily business operations at the Arbitration Association. I am determined to do my best to assist Japanese athletes win the 2020 Tokyo Olympic and Paralympic Games. Let me ask for your generous support and understanding.