GUIDE to TOMAC ARBITRATION

2. PREPARATION FOR THE ARBITRATION PROCEDURE

Table of Contents

• THE NECESSITY OF ARBITRATION CLAUSES OR AGREEMENTS
• WHAT IS THE ARBITRATION PROCEDURE
• DOCUMENTATION REQUIRED FOR THE ARBITRATION APPLICATION

THE NECESSITY OF ARBITRATION CLAUSES OR AGREEMENTS

    When attempting to resolve a dispute through arbitration, there first must be agreement between the parties to that effect. The proof of such an agreement takes the form of arbitration agreements or arbitration clauses contained within a transactional contract.

    Moreover, when in addition to language such as "all and any disputes arising out of or in connection with this contract" or "all and any disputes arising out of or in connection with the collision on such and such a date occurring between vessel A and vessel B", a specific reference to "the dispute shall be resolved by arbitration by TOMAC (or JSE)" or "the dispute shall be resolved by arbitration in accordance with the rules of arbitration of TOMAC (or JSE)," is included in the arbitration agreement or clause, either party to the dispute may unilaterally apply for arbitration proceedings to TOMAC and the application will be accepted.

    So when drafting arbitration agreements or clauses, in order to make certain of arbitration by TOMAC of The Japan Shipping Exchange, Inc., it is highly recommended to include the phrases "by JSE" or "by TOMAC" in addition to "arbitration held in Tokyo."

(1)Arbitration Agreements

    In any matter where a dispute has arisen regardless of the existence of a contract and there seems to be too little prospect of settlement discussions leading to an amicable settlement, the parties may well agree to arbitrate their dispute. The agreement which is formed as evidence of the parties' intention to arbitrate constitutes the arbitration agreement. It is recommended that the parties adapt the pre-existing form of TOMAC to their circumstances and draft an appropriate agreement on A4 size paper.

Explanation of Arbitration Agreement

1. (Note 1.) Indicate the names of the parties.
2. (Note 2.) Write down sufficient information to allow determination of fundamental issues like the type of contract in dispute, and where the dispute took place.
3. (Note 3.) Indicate below the particulars of the agreement to arbitrate.
4. (Note 4.) International arbitration is only conducted in Tokyo.
5. (Note 5.) All parties should sign the agreement and indicate a specific address. In the case of a corporate party, a representative must sign and the name and address of the corporation should be indicated. It is customary to align the signatures horizontally one next to another, not vertically, one over another.

(2) Arbitration Clauses

    With the exception of minor variations in the wording during years in which revisions were made or new versions were introduced, the clauses presented here have been included in the standard forms of the JSE. We recommend that parties use these clauses, in their own voluntarily designed contracts as well.

Explanation of the Arbitration Clause

    The clause provides that, in the case of future disputes, the parties have agreed to refer them to arbitration by TOMAC for resolution.

WHAT IS THE ARBITRATION PROCEDURE

    The complete set of proceedings, beginning with the arbitration application, and going all the way to the handing down of the arbitration award or the withdrawal of the arbitration application (settlement withdrawal), is called arbitration procedure. The precise details of procedure are determined according to the rules legislated by TOMAC (the "TOMAC Rules"). Numerous revisions and more than 80 years of practical experience have resulted in the independent make-up of the TOMAC Rules.

DOCUMENTATION REQUIRED FOR THE ARBITRATION APPLICATION

The following five types of documentation are required for the arbitration application.

1. Arbitration Application

    The Statement of Claim shall be submitted to the TOMAC Secretariat in the number of copies as instructed by the Secretariat, and at the same time a Filing Fee (in the case of Small Claims Arbitration the total of the Filing Fee and the Arbitration Fee, as determined by the tariff) must be paid.

2. Documentation Evidencing Agreement to Refer the Dispute to TOMAC Arbitration

    This is explained in the section on "THE NECESSITY OF ARBITRATION  CLAUSES OR AGREEMENTS" above. The original of one or the other must be submitted to the TOMAC Secretariat at the time the arbitration application is made, and upon confirmation of the arbitration agreement, the application will be accepted.
    In TOMAC Arbitration, the parties must include serial exhibit numbers on all supporting submissions. This includes argumentative briefs filed by the parties in order to support the application for arbitration, defenses and supplementary statements, etc. Where the dispute is over a contract, the first exhibit number shall be assigned to the contract in question
    In the case of a dispute which does not involve a contract, such as a claim for damages resulting from a collision of ships, the first exhibit number shall be assigned to the documents which prove the occurrence of a collision. In this manner, statements of claim may refer to already numbered evidence and this improves efficiency.

3. Evidentiary Documentation

    Where documentary evidence has been attached supporting the application, the evidence shall be numbered following the order of sections in the application, (statement, causes of action, etc.), and labeled as being from either the Claimant or the Respondent. The number of copies to be submitted is the same as for the application itself.

4. Certificate of Representative Qualifications

    This must be submitted when the party is a corporation.

5. Document Empowering an Agent or Attorney

    There is no requirement under Japanese law or TOMAC Rules that an attorney at law participates in the arbitration. It may be advisable, however, that so as to facilitate proceedings foreign or distant parties appoint an attorney in Japan.
    When an agent or attorney is appointed, in order to allow that person to conduct the arbitration proceedings in question, one set of documentation stating that the individual has been endowed with the right to represent must be submitted.

1. FEATURES OF TOMAC ARBITRATION

3. DOCUMENTATION FOR APPLICATION