The JIMC-SIMC Joint Covid-19 Protocol provides cross-border businesses with better access to mediation and its benefits; settlement agreements are enforceable in Singapore under the Singapore Convention on Mediation, which entered into force on 12 September 2020.
SINGAPORE & JAPAN — The Singapore International Mediation Centre (SIMC) and Japan International Mediation Center (JIMC) on 12 September 2020 signed a Memorandum of Understanding to operate a joint protocol that provides cross-border businesses, including companies along the Singapore-Japan corridor, with an economical, expedited and effective route for resolving commercial disputes amid the COVID-19 pandemic.
The JIMC-SIMC Joint Protocol is thought to be the first joint mediation protocol between two international dispute resolution centres committed to providing expedited mediation during the pandemic. It is SIMC’s first such collaboration with an overseas mediation centre, following the SIMC Covid-19 Protocol which was launched in May.
“Given the international impact of the pandemic, SIMC is also working with partners around the world on similar protocols that are customised to the needs of specific jurisdiction”
The Covid-19 pandemic has disrupted the performance of contractual obligations, supply chains and other aspects of commerce, resulting in differences and disputes between businesses around the world. Mediation helps parties to resolve their disputes in an expeditious, economical and effective manner without being engaged in protracted legal proceedings. Mediation also preserves relationships as the disputes are resolved amicably, with parties free to adopt commercially driven solutions that are flexible and creative. Users that consider mediation as their first port-of-call are therefore in a better position to recover from the wide-ranging impact of the pandemic.
The coming into force of the Singapore Convention on Mediation on 12 September also allows parties to enforce settlement agreements in the jurisdictions that have ratified the Convention, including Singapore. The United Nations trade treaty underscores the role of mediation as an important tool that companies can deploy to resolve their cross-border disputes.
Given the international impact of the pandemic, SIMC is also working with partners around the world on similar protocols that are customised to the needs of specific jurisdictions. The JIMC-SIMC Joint Protocol supports the commitment to further strengthen economic resilience amid the problems caused by the Covid-19 pandemic[1].
“The Joint Protocol offers parties the best of both worlds as they can discuss their disputes with mediators who understand the unique aspects of their respective cultures and jurisdictions. Through this arrangement, we hope to make mediation more accessible to businesses.”
Mr George Lim SC, SIMC Chairman
Japan and Singapore share strong trade and commercial links. Japan and Singapore are among each other’s largest investors[2]. Japanese enterprises have set up key offices in Singapore, while two of Japan’s largest law firms recently entered into partnerships with Singapore law practices, mirroring the growth of Japanese investments in Singapore and the region.[3]
The JIMC is administered by a committee under the Japan Association of Arbitrators (JAA), one of Japan’s most prominent arbitrator associations featuring renowned international lawyers and professors.
“It is a great pleasure for JIMC, which was founded on the background of mediation culture, to contribute in the field of international dispute resolution through the joint protocol with SIMC in the chaotic world of Covid-19.”
Mr Haruo Okada, JIMC Chief Director
The JAA promotes alternative dispute resolution, such as mediation, through training, and research and development. In consultation with JIMC and JAA stakeholders, the Joint Protocol is designed to ensure the successful settlement of disputes, which may be marked by physical, cultural and language barriers. Some key aspects of the Joint Protocol include:
- Mediations may be easily filed at either JIMC or SIMC online by paying a low JPY 20,000 or SGD 250 filing fee. JIMC and SIMC will jointly manage mediations.
- Cases will be resolved by two experienced mediators (one nominated by each Centre) to facilitate cross-border settlement.
- Parties will enjoy fixed and reduced fees adapted for the Japanese market. For example, for disputes of less than S$1.3M, each party pays S$6,500 (see Fee Schedule).
- Mediation can be conducted online to overcome the current limitations on travel.
- Settlement agreements may be enforced under the Singapore Convention on Mediation in countries that have ratified or approved the Convention, including Singapore.
These unique aspects will ensure that users are set up for a successful mediation. For example, in a mediation between a Japanese and non-Japanese party, the co-mediation aspect allows for the appointment of mediators who are familiar with different legal and cultural contexts; mediators may be a Japanese-speaking and international mediator selected from both centres’ established panels of mediators with skillsets to address any given dispute. The Joint Protocol is expected to be formally launched later this year at an event marking JIMC’s 2nd year anniversary on 20 November.
SIMC Chairman Mr George Lim SC said, “With the Convention’s entry into force and Covid-19-related disruptions still ongoing, mediation is all the more relevant in these times for its harmonious and pragmatic approach. JIMC and JAA are both valued partners and given the regional footprint of Japanese businesses, JIMC is a natural choice for our Joint Protocol in Japan. The Joint Protocol offers parties the best of both worlds as they can discuss their disputes with mediators who understand the unique aspects of their respective cultures and jurisdictions. Through this arrangement, we hope to make mediation more accessible to businesses. I would encourage businesses to consider mediation as their first port of call.”
Mr Chuan Wee Meng, CEO of SIMC, said, “We are pleased to partner with JIMC on the Joint Protocol and look forward to a close collaboration to benefit businesses. These are challenging times for many, and it is absolutely vital for companies operating across Japan, Singapore and the region to have access to a time- and cost-effective means of dispute resolution. To our knowledge, this is the first of such a protocol between two international mediation centres; we expect that this will draw deep interest from users who do business in Japan.
“In our experience, a successful settlement depends very much on understanding culture and bridging that gap to build rapport. This may not always be apparent but a skilled mediator will be able to draw out those distinctions to help parties understand each other’s perspectives and the underlying issues at stake. One of the key features of the Joint Protocol, the co-mediator scheme, addresses that and helps parties to agree on mutually acceptable solutions. It was our intention to make this Protocol available and applicable in other jurisdictions and we are heartened that, together with JIMC, this is now made possible for parties in Japan and the region. On that note, we also welcome similar collaborations with other partners in the region.”
Haruo Okada, Chief Director of JIMC, said, “Japan has a culture that has been respecting harmony since ancient times and has a very high affinity for mediation. The history of mediation in Japan is long, and the Japan International Mediation Center in Kyoto was established as a permanent specialized organization for international mediation in the city of Kyoto, which is the center of such history and culture. The unprecedented pandemic caused by Covid-19 has hit businesses worldwide, creating disruptions and conflicts all over the world that no one has ever experienced. International mediation, in which both parties who have suffered damages, make an appropriate adjustment quickly and inexpensively while maintaining business relationship, is just the right way to properly resolve such a dispute wherein there has no applicable rules or precedents. We trust this project, in which JIMC of Japan and SIMC of Singapore collaborate to provide a dispute settlement method of international mediation online which is a timely method in the current situation, will be very significant, together with the coming into effect of the Singapore Convention on Mediation, to spread international mediation worldwide. It is a great pleasure for JIMC, which was founded on the background of mediation culture, to contribute in the field of international dispute resolution through the joint protocol with SIMC in the chaotic world of Covid-19.”
Kazuhiko Nishihara, Secretary General of JIMC, said, “JIMC has had a close relationship with SIMC since JIMC’s launch. I am very pleased and honoured that this relationship has deepened in the form of the JIMC-SIMC Joint Protocol. Many Japanese companies focus their efforts on resolving disputes through negotiations when disputes arise, and only when their efforts are not rewarded, they inevitably choose to litigate or arbitrate. However, the participation of highly skilled neutral mediators in such negotiations often reveals a path to a solution that was not apparent during the pre-mediation negotiation process. This Joint Protocol is an innovative mediation system that aims to resolve disputes online within 1-2 months by co-mediators including mediators who understand Japanese culture, that Japanese companies can use even after the breakdown of their negotiations. I would very much like Japanese companies to use this Joint Protocol to negotiate during this Covid-19 pandemic.”
For more information about the Japan International Mediation Center, please visit: https://www.jimc-kyoto.jp/access
[1] Ministry of Trade and Industry (Singapore), https://www.mti.gov.sg/-/media/MTI/Newsroom/Press-Releases/2020/05/Press-Release—Singapore-and-Japan-Agree-to-Deepen-Bilateral-Cooperation-to-Combat-COVID-19.pdf
[2] Ministry of Foreign Affairs (Singapore), https://www.mfa.gov.sg/SINGAPORES-FOREIGN-POLICY/Countries-and-Regions/Northeast-Asia/Japan
[3] https://www.businesstimes.com.sg/companies-markets/japanese-investments-into-s-e-asia-pave-way-for-japan-singapore-legal-alliances
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