ADR and Dispute Resolution
This section covers ADR and dispute resolution. The exam tests negotiation, mediation, arbitration, labor tribunals, and enforcement of settlements and awards.
Core rules
- The ADR Act promotes out-of-court dispute resolution. Mediation uses a neutral to facilitate settlement; it is not binding unless the parties agree. Settlements can be recorded and enforced.
- Arbitration requires an arbitration agreement. Under the Arbitration Act, awards are final and binding, with limited court review. Japan enforces foreign awards under the New York Convention framework.
- Labor tribunals handle individual labor disputes; family courts handle family matters. Courts may refer cases to mediation.
- Confidentiality and party autonomy are common advantages, but arbitration can be costly and lacks broad appeal.
Worked example
A sales contract contains a clause referring disputes to arbitration in Tokyo. The buyer sues in court despite the clause. The court should dismiss or stay the action if a valid arbitration agreement covers the dispute. The arbitrator issues an award; enforcement requires a court enforcement decision. If the clause is vague, the court may find no binding arbitration agreement.
Traps
Do not confuse mediation with arbitration. Do not assume every ADR outcome is enforceable without a settlement or award. Do not overlook scope and validity of arbitration clauses. Do not miss enforcement formalities.