Japanese(Nihongo)
HOME > Arbitration at TOMAC > GUIDE to TOMAC ARBITRATION > 1. FEATURES OF TOMAC ARBITRATION


TOMAC Arbitration
WaveLength(JSE Bulletin)
Laws of Japan
Maritime Law Firms in Japan
The Mariners' Digest
Web Links
Contact
Total Access:

GUIDE to TOMAC ARBITRATION

1. FEATURES OF TOMAC ARBITRATION

Table of Contents

ORDINARY RULES, SIMPLIFIED RULES AND SCAP RULES - one of the world's fastest

    Currently TOMAC has three sets of arbitration rules, i.e. (1) the Rules of Arbitration ("Ordinary Rules"); (2) the Rules of Simplified Arbitration ("Simplified Rules"); and (3) the Rules of the Small Claims Arbitration Procedure ("SCAP Rules"). Under the Ordinary Rules it takes 12 to 18 months to come to a close. Under the Simplified Rules introduced in 1985, it normally takes 6 to 12 months for the arbitrators to give their award. Under the SCAP rules, which were first made in February 1999 to meet the demand for a faster and more cost-effective means, it requires about three months until the parties can resolve their disputes. These rules are based on nearly 80 years of practical experience, independently smoothing arbitration procedures.

SIMPLIFIED ARBITRATION FOR A CLAIM FOR YEN 20 M OR LESS

   Simplified Arbitration may only be selected in cases where the amount of claim does not exceed Twenty Million Yen (Yen20,000,000). An application for Simplified Arbitration must be so marked as to notify that it is for Simplified Arbitration. One original of the Statement of Claim and accompanying documents will be served on the Respondent by the Secretariat, and they will be instructed to file their defense in Simplified Arbitration. If the parties do not agree to follow these Rules, the dispute shall be resolved in accordance with the Ordinary Rules.

SCAP ARBITRATION FOR A CLAIM FOR YEN 5 M OR LESS

    The SCAP Rules shall be used in principle where neither the claim nor any counterclaim exceeds the sum of Five Million Yen (Yen5,000,000) by agreement between both parties. If the parties do not agree to follow these Rules, the dispute shall be resolved in accordance with the Ordinary Rules.

COMPARISON OF THE THREE PROCEDURES

(1) Application and Defense
    An applicant for the Simplified Arbitration or the SCAP Procedure, as the case may be, shall file with the Secretariat the Statement of Claim in the Simplified Arbitration/Small Claims Arbitration Procedure. When the Secretariat acknowledges that the application complies with such requirements of the Rules, it shall accept the application.
    The Respondent shall be instructed to forward to the Secretariat and the Claimant respectively within 15 days from the day of receipt  of such instruction a Defense in the Simplified Arbitration/Small Claims Arbitration Procedure, while under the Ordinary Rules 21 days are given to the Respondent.
    The the Ordinary Rules stipulate that in the event of any further supplementary statement and documentary evidence being filed, the procedure of filing shall be repeated. In the Simplified Rules, the Claimant is entitled to submit a supplementary statement against the Defense. Further arguments by the parties should be submitted orally to the Tribunal at the hearing. Under the SCAP Rules the proceedings are in principle based on documents only. The Claimant should submit its Final Supplementary Statement against the Defense, to which the respondent is to submit its own Final Supplementary Statement.
(2)Appointment of an Arbitrator
   Under Ordinary Arbitration, in Two Parties' Case, Each party shall nominate an arbitrator from among the persons who are listed on the Panel of TOMAC Arbitrators and the two arbitrators thus nominated shall, unless otherwise agreed, nominate a third arbitrator.
In Multi-parties Case, unless otherwise agreed by the parties, where there are more than two parties to an arbitration, TOMAC shall appoint an arbitrator or arbitrators taking into account all parties' intention.
    Under the SCAP Rules, a sole Arbitrator, who has no connection with either of the parties or the matter in dispute, should be appointed by TOMAC from among persons listed on "the Panel of Arbitrators" within 10 days from the day when the Respondent's Defense was filed or should have been filed, whichever is earlier. Under the Simplified Rules uneven number of arbitrators, usually a sole arbitrator, will be appointed within 10 days.
(3)Hearing
    Under the SCAP Rules the Arbitrator shall conduct a hearing by way of the examination of documents. There shall be no oral hearing unless the Arbitrator deems it necessary. Under the Ordinary Rules and Simplified Rules the Arbitrators shall, in principle, hold the hearing in the presence of all parties.
(4)Award
    The SCAP Rules have unique stipulations concerning a grace period for payment and a notarial deed for enforcement:-
Article 12. [Period of Grace] (1)Where the Tribunal awards the claim in whole or in part to the Claimant, the Arbitrator may, having considered the Respondent's solvency, the trade relationship between the parties and/or other pertinent circumstances, grant the Respondent such terms of payment including but not limited to the following: (a) a period of grace for payment; (b) payment by instalments within a period not exceeding 3 years without incurring default interest for so long as such payments are being timely made pursuant to the installment schedule; and/or (c) issuance of promissory notes on such instalments.
Article 13. [Notarial Deed] (1) The Tribunal may, in awarding all or part of the monetary claim to the Claimant, recommend that the parties obtain a notarial deed for compulsory execution of the award.
In general, the Claimant must gain a judgment for compulsory enforcement of an award under Japanese law. As is often criticized, court proceedings inclusive of a judgment for compulsory execution tend to take a long time. If the parties agreed on the notarial deed, the Notary Public will give one immediately to the Claimant. Then compulsory execution may be done without delay.
(5) Foreseeability of the Arbitration Costs
Filing Fee
    The Claimant shall, when applying either for Ordinary Arbitration or Simplified Arbitration, pay to the Secretariat a Filing Fee in the amount of One Hundred Thousand Yen (Yen100,000), while for SCAP Arbitration a Filing Fee is Thirty Thousand Yen (Yen30,000).
Arbitration Fee
    Under the Ordinary Rules the minimum Arbitration Fee is Nine Hundred Thousand Yen (Yen900,000), and under the Simplified Rules Six Hundred Thousand Yen (Yen600,000).The Fee of the Small Claims Arbitration Procedure shall be five percent (5%) of the amount of the claim and the counter-claim, if any, but not less than One Hundred Thousand Yen (Yen100,000).
    The costs of arbitration shall be paid from the Arbitration Fee paid to the Secretariat and the remuneration for the arbitrator shall also be paid out of the Arbitration Fee as is the same under the other two Rules. TOMAC arbitration basically imposes no further financial burden on the parties. TOMAC Arbitrators perform their duties as public services to the industries concerned, not as private business.
Table of Contents 2. PREPARATION FOR THE ARBITRATION PROCEDURE