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SIAC-Japan Association of Arbitrators Tokyo (JAA) Conference 2019

4 June 2019
SIAC-Japan Association of Arbitrators Tokyo (JAA) Conference 2019
By Stephanie Cameron and Yudai Nagaishi, Ashurst LLP

The theme of the 2019 SIAC-JAA Tokyo Conference was "Perils and Precautions in Complex Disputes: Navigating Multiple Contracts, Multiple Parties and Multiple Proceedings".

The conference opened with a welcome address by Ms Lim Seok Hui (CEO, SIAC) who energetically outlined why the 21st century in arbitration will be "the century of Asia". She noted that Japan in particular is an economic powerhouse, and that with Japanese investments and projects across all corners of the globe, there is a need for a dispute resolution process that is not only fast paced, but which also provides quality and efficiency. She suggested that SIAC is well placed to provide this service, given that it is currently the preferred arbitral institution in Asia – and SIAC is committed to continuing to provide arbitral service with a personal touch.

Mr Chan Leng Sun SC (Deputy Chairman, SIAC Board of Directors; Senior Counsel and Arbitrator, Essex Court Chambers Duxton) delivered an opening address with a reference to a quote inspired by the popular TV show, Game of Thrones: "We can only help people from a position of strength, and a position of strength comes from cooperation". He noted that the Memorandum of Understanding between SIAC and JAA is a step in the direction of achieving such cooperation, and is also a strong commitment to continuing to have conferences and training programs in both Japan and Singapore, in an effort to ensure there is a trusted system available to parties in order to resolve complex disputes.

The second opening address was delivered by Mr Yoshimasa Furuta (Managing Director, JAA; Partner, Anderson Mori & Tomotsune), who summarised some of the key developments in recent years in relation to international arbitration in Japan. These developments include the launch of the Japan International Dispute Resolution Center (JIDRC) in Osaka in May 2018, the establishment of the Japan International Mediation Center (JIMC) in Kyoto, and the commitment to establish another hearing venue in Tokyo by March 2020. He also noted JAA's commitment to continuing to leverage international dispute resolution opportunities in Japan.

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Members of the audience

Left to Right: Chong Yee Leong, Ronnie King,
Gai Matsushita, Zachary Sharpe and Masako Takahata

Panel Session I: Drafting Precautions into the Contract

The first panel of the day addressed the topic "Drafting Precautions into the Contract" and was moderated by Mr Gai Matsushita (Partner, Innoventier LPC). The panellists were Mr Chong Yee Leong (Member, SIAC Board of Directors; Partner, Allen & Gledhill LLP), Mr Ronnie King (Managing Partner, Ashurst Horitsu Jimusho Gaikokuho Kyodo Jigyo), Mr Zachary Sharpe (Partner, Jones Day) and Ms Masako Takahata (General Counsel, Eurus Energy Holdings Corporation).

This session had a particular focus on transactions giving rise to a risk of parallel proceedings, and how for clients, a big risk is incurring large costs running parallel proceedings that may all be dealing with the same few issues related to one project. The panellists noted that a major benefit of SIAC arbitration is the joinder and consolidation provisions, however they noted that there was some scope for discussion around the meaning of "compatible" in the context of the SIAC rule permitting consolidation. Rule 8.1(c) of the SIAC Rules 2016 provides that one of the grounds under which proceedings may be consolidated is if the arbitration agreements are “compatible,” among other requirements.

During discussions, Mr Matsushita raised an interesting question: "What should be done if parties cannot agree on the seat of the arbitration?" This prompted some useful observations from the panellists. Mr Sharpe noted that often the client is actually more concerned about the venue of the hearing, and not the seat, and that therefore the parties could discuss holding the arbitration in a location that is different to the seat of the arbitration. Mr King noted that the parties could leave this issue silent, noting that the 2016 SIAC Rules provide that if the parties have not agreed on the seat then the Tribunal will make a determination. Mr Chong raised a logistical point, that some seats do not allow foreign arbitrators to work – and therefore this is an important factor to consider. Finally, Ms Takahata noted that from an in-house counsel point of view, having a favourable seat is the most important aspect of the arbitration agreement.

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Left to Right: Chris Bailey, Christopher Chuah, Hiroyuki Tezuka,
Kap-You (Kevin) Kim and Elaine Wong

Left to Right: Lars Markert, Junya Naito, Chan Leng Sun, SC,
Iain Potter, Farhad Sorabjee and Ing Loong Yang

Panel Session II: Can I Resolve my Dispute in a Single Forum? Procedural Tools and Strategic Considerations

Panel Session II was moderated by Mr Hiroyuki Tezuka (Member, SIAC Court of Arbitration; Executive Director, JAA; Partner, Nishimura & Asahi).

The panellists were Mr Christopher Chuah (Partner, and Head – Infrastructure, Construction & Engineering Practice, WongPartnership LLP), Mr Kap-You (Kevin) Kim (Partner, Bae, Kim & Lee LLC) and Ms Elaine Wong (Partner, Herbert Smith Freehills GJBJ).

In this session, Mr Chuah first briefly presented on the basic concepts related to parallel proceedings under the SIAC Rules and the approach to "res judicata" from both the English law and civil law perspectives. Mr Kim and Ms Wong then elaborated on issues related to parallel proceedings. Mr Kim focused on joinder and consolidation proceedings and arbitrator appointments, and explained how joinder and consolidation can affect the existing arbitration proceedings depending on the timing of an application for joinder. Ms Wong explained how common procedural tools such as bifurcation, stays, and anti-suit injunctions can be used, with reference to the model law requirement.

In the discussion, one of the questions raised was "what happens if a third party requesting to join (a joinder party) proposes to the existing parties that the existing parties consent to the joinder in exchange for the joinder party waiving its right to seek revocation by the Court of arbitrators appointed prior to joinder?" Mr Kim noted that it is actually a common tactics that he uses when he represents a joinder party. Mr Kim added that the existing parties usually tend to accept such a proposal. He stated that before seeking to negotiate such a position, the joinder party should carefully consider the potential impact that such a waiver could have.

Panel Session III: Minimizing Perils in Parallel Proceedings

Panel Session III was moderated by Mr Chan Leng Sun, SC.

The panellists were Mr Lars Markert (Partner, Nishimura & Asahi), Mr Junya Naito (Partner, Momo-o, Matsuo & Namba), Mr Iain Potter (Director, MDD Forensic Accountants, Singapore), Mr Farhad Sorabjee (Partner, J. Sagar Associates) and Mr Ing Loong Yang (Partner, Latham & Watkins LLP).

In this session, the panellists focused on discussing parallel proceedings in the context of the same or similar claims being dealt with by different courts or arbitral tribunals, as opposed to the claims being heard in a single forum (which was the focus of Panel Session II).

Mr Naito explained how confidentiality under arbitration proceedings is well protected, especially when compared with Japanese court proceedings. He noted that all proceedings and court records in a Japanese court proceeding are in effect open to the public.

Mr Yang focused on the problems arising out of res judicata. He explained that res judicata between the same sort of proceedings (court vs court or arbitral tribunal vs arbitral tribunal) can be dealt with consistently, but that there is no consistent approach at the international level to resolve issues of res judicata between a court and a tribunal. This was an interesting observation and made us wonder whether a unified approach should be established at the international level.

Mr Markert introduced "guerrilla tactics" in international arbitrations and emphasized that the multi-jurisdictional nature of international arbitration makes it difficult to find a "one size fits all" approach and that possible options should be determined on a case-by-case basis.

Mr Sorabjee explained how the risk of parallel proceedings in India could be minimized. He noted that specifically excluding some of the provisions of Indian arbitration law in the arbitration clause would be sensible to avoid multiplicity and delay by the Indian courts.

Finally, Mr Potter presented on the key considerations for quantum. He noted that changes in the factual matrix should be carefully considered when dealing with parallel proceedings.
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