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Japan may become a better option as a place to solve international disputes even for foreign companies

Japan may become a better option as a place to solve international disputes even for foreign companies.

It is reported that the Japanese government is considering legal revision to make it easier for foreign lawyers to work in Japan, and may introduce the bill to the extraordinary Diet session this year. Specifically, the legal revision is reportedly being considered in the following two aspects.

  1. Shortens the requirement of experience of having performed professional duties to two years (which includes one year of experience in other countries) from three years (which includes two years of experience in other countries).
  2. Makes it possible to establish a joint law firm by Japanese lawyers and foreign lawyers, which aims to provide legal services regarding Japanese and foreign laws (so-called type B corporation).

In fact, these issues have been discussed once before between 2015 and 2016, and the report was published in June 2016 (the English translation is available here).

The government seems to be trying to figure out a way to go mainstream of international dispute resolution. In the modern era of expanding globalization, there is a growing need for arbitration that can provide packaged solutions for disputes in multiple countries. However, only about 20 cases are filed applications in a year for international arbitration in Japan. I would have to say that Japan does not have much of a presence in this field. Therefore, the government may have decided to ease the restrictions to increase foreign lawyers in Japan, so that foreign companies will be more likely to choose international arbitration in Japan.

In the field of intellectual property, the Japan Patent Office (JPO) once decided to defer the introduction of the JPO ADR (alternative dispute resolution) system for SEP (standard essential patent)-related disputes in 2017.  However, in March 2018, the JPO expressed the opinion that international arbitration is an effective solution for global dispute resolution, and announced a plan to hold a mock arbitration by inviting leading expert judges from the world, as reported here. Later, the JPO states that, through the mock arbitration, it wants to show the possibility of resolving disputes over SEP by international arbitration and also the option of prominent arbitrators in the field of IP dispute resolution performing the proceedings in Tokyo. The government seems to want to promote international arbitration in Japan without regard to who the arbitrators are (Japanese or not).

Anyway, an increase in experts at foreign laws in Japan is welcome, because even domestic small and medium-sized enterprise (SME) is seeking opportunities overseas.

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