In a webinar co-organized by the Singapore International Mediation Centre (SIMC) and Dentons Rodyk on June 16th, panelists discussed why mediation is an effective dispute mechanism in the post Covid-19 era for businesses in Japan and across the region.
The session was livestreamed with presentations in English and Q&A conducted with Japanese translations. The discussion on mediation resonated with an audience that has business operations in Japan—a culture known for its emphasis on harmony. We’ve selected some of the highlights from the session, but you can also access the full recording here.
During the session CEO of SIMC Mr. Chuan Wee Meng, Senior Partner of Dentons Rodyk Mr. Hsu Li Chuan, and Head of Japan desk at Dentons Rodyk’s regional practice group Ms. Ng Sook Zhen, also took a deep dive into the growing preference hybrid dispute resolution methods, mediation for Japanese businesses as well as tips for drafting alternative dispute resolution (ADR) clauses in Asia.
Mediation is well-suited for Japanese businesses seeking to resolve commercial conflicts during Covid-19
During the Q&A session, Ms. Ng was asked whether mediation, arbitration or litigation was usually the preferred dispute resolution method for Japanese enterprises. She responded that “Japanese clients do prefer to settle disputes out of court as soon as possible. There is even a form of mediation in Japanese courts and culture which makes mediation so much more suitable for businesses in Japan.”
Mr. Chuan explained that mediation is especially suited for Japanese enterprises because it promotes harmony between parties and helps to preserve long-term business relationships. He highlighted that SIMC and the Singapore International Arbitration Centre’s (SIAC) arb-med-arb protocol–which encompasses both mediation and arbitration–has been widely used by many Japanese clients over the years to resolve their commercial disputes. The new Covid-19 Protocol by SIMC is also well-poised to offer clients expedited, economical and effective mediation services in light of the expected increase in conflicts due to Covid-19.
Mr. Hsu shared some tips for drafting dispute resolution clauses and said that there has been an increase in use of multi-tiered dispute resolution processes by business communities in Asia. He observed that many cross-border commercial agreements between Asian parties often include a “friendly discussion” followed by a mediation and/or arbitration clause. In particular, for multi-tiered dispute resolution clauses that consist of friendly negotiations, mediation and arbitration, it would be beneficial to stipulate a time limit for each stage.
Here are some other pertinent questions from the audience and our expert panel’s responses…
“Is it common for parties to agree on a mediator in a contract? What is the percentage of clients that have requested for a mediation clause in contracts?”
Mr. Hsu said, “In my years of practice, it used to be only mostly companies from China that would consider friendly discussions before entering other dispute resolution processes. In the past 5-8 years however, I’ve seen more businesses coming up with clear and specific timelines for considering friendly discussions before moving forward with mediation and/or arbitration.
In particular, mediation has become increasingly more popular for contracts with longer term business partnerships such as joint ventures. I’ve noticed a 40 to 50% increase in cases where mediation is included as part of the dispute resolution clause – this is especially so for contracts involving business ventures in the region.”
“How does SIMC empanel mediators?”
Mr. Chuan said, “At SIMC, we look for mediators who have extensive cross-border mediation experience and gravitas within the community. Our current panel is international and consists of experts from different industries and regions.”
“We have a panel selection committee within our board that independently assesses potential candidates based on their area of expertise and level of experience in mediating cross-border disputes.”
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