2nd Report of the Market Access Ombudsman Council (March 14, 1995)

6-(1) Liberalization on representation of parties by foreign lawyers in international arbitration

1. Complainants: European Business Council, German Embassy

2. Ministry concerned: Ministry of Justice

3. Complaint:

Article 72 of Japan's Lawyer Law forbids anyone but lawyers from engaging in legal work in general as a business (in a repetitive and continued fashion) for the purpose of receiving remuneration. Since acting as a representative for the parties in procedures for international commercial arbitration also falls under this prohibition, persons with foreign legal qualifications are not allowed to undertake this work. However, persons with foreign legal qualifications may engage in certain legal work in the laws of their country of primary qualification if they receive approval from the Minister of Justice and register with the Japan Federation of Bar Associations (JFBA). In this case, they are also allowed to act as representatives in international commercial arbitration which is governed by the law of their country of primary qualification.

With the increase in legal work under both Japanese and foreign laws, the complainant believes that this restriction should be abolished and that foreign lawyers should be allowed to act as representatives in international commercial arbitration for the efficiency, better service, etc.

4. Results of deliberation:

In April 1993, the OTO Advisory Council presented the following views to the government on the subject of deregulation on the work of gaikokuhou-jimu-bengoshi, including that which is the subject of this complaint.

With the globalization of world trade and increasing interdependence in trade and investment, Japan needs to review its systems and restrictions to harmonize them with those of the international community, not excepting legal services. Corporate activities have also become more international in scope, and legal matters involving both Japanese and foreign law will continue to increase. It will thus be necessary to meet users' needs for better service by diversifying the types of legal services available and promoting competition. Therefore, logical conclusion acceptable to the international community must be reached as soon as possible.

With this in mind, the Study Commission on the Issue of Foreign Lawyers, held by the ministry and the JFBA, recommended, in September 1993: "In order to respond to the demands of our era which require the development of a more sophisticated international commercial arbitration system in Japan, serious consideration be advanced rapidly among agencies concerned with an aim to amend the system toward further liberalization of representation in international commercial arbitration."

Accordingly, the Study Commission on the Representation of Parties in International Arbitration, held by the ministry and the JFBA, is currently studying directions for liberalization, and will take the necessary measures based on the results of the Study Commission. The Study Commission has been meeting once a month since June 1994.

These are the steps which have been taken so far, and the Study Commission should reach conclusions with internationally acceptable logic at an early date, and based on these conclusions, the necessary measures, including adjustment of related laws, should be taken as soon as possible.

Government decision (March 28, 1995)

6-(1) Liberalization on representation of parties by foreign lawyers in international arbitration

The Study Commission on the Representation of Parties in International Arbitration is studying for the liberalization, and the conclusion of the study is aimed to be drawn around October 1995, after which the necessary measures will be taken including adjustment of related laws in time for the next ordinary session of the Diet.

Follow-up (May 27,1996)

6-(1) Liberalization on representation of parties by foreign lawyers in international arbitration

The Study Commission on the Representation of Parties in International Arbitration concluded in October 1995 that domestic law should clearly state that gaikokuho jimu bengoshi in Japan and lawyers practicing abroad are allowed to act as intermediaries in international arbitration. Based on this conclusion, the Bill to Partially Revise the Special Measures Law on the Handling of Legal Affairs by Foreign Lawyers has been submitted to the current regular session of the Diet.