Japan opens more “international” arbitrations to Registered Foreign Lawyers

The Japanese Government has introduced amendments to the Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers (the Foreign Lawyers Act) to increase rights of representation of Foreign Registered Lawyers (gaiben) in international arbitration proceedings in Japan. These amendments are to come into effect on 29 August 2020.

While Registered Foreign Lawyers currently have rights of representation in “International Arbitration Cases” (as that term is defined in the Foreign Lawyers Act), such rights exist only where at least one of the parties to the arbitration is a non-Japanese individual or entity, and do not extend to a situation where one or both parties are majority owned by foreign parent companies. (Interestingly, restrictions do not apply to lawyers based outside of Japan, who, in principle, have been free to serve as counsel in international arbitrations in Japan.)

From 29 August 2020, Registered Foreign Lawyers will be able to represent clients in arbitrations with all Japanese parties where there is a sufficient international nexus. Such nexus will be satisfied where: 

1. one of the parties to the proceedings is more than 50-percent owned by a non-Japanese company;
2. the parties have agreed to a foreign governing law; and/or 
3. Japan is the venue for the arbitration but the seat is abroad. (The venue is the location where a hearing is held, while the seat is the jurisdiction whose arbitral law applies to the proceedings.)

Changes will also be introduced to representation rights in international mediations for Registered Foreign Lawyers and foreign lawyers not based in Japan, granting such lawyers the ability to represent parties where: (a) the mediation is commenced by private businesses such as a corporate entity (or an individual who is a party to business contract(s)) against another corporate entity (or entities or individual(s)); and (b) there is a sufficient international nexus similar to that are outlined above with respect to international arbitration.

Finally, the Foreign Lawyers Act’s post-qualification experience requirements have been amended to make it easier for foreign lawyers in Japan to become Registered Foreign Lawyers. At present, foreign lawyers are required to have three or more years’ post-qualification experience, with a maximum of one year of practice in Japan allowed to count towards the total. The Foreign Lawyers Act now increases this limit to two years of experience in Japan, thus making it easier for more junior lawyers practising in Japan to qualify as Registered Foreign Lawyers.

A full briefing note on this topic can be found here.