An arbitration clause is a clause in a contract that states that the parties will pursue arbitration in case of a breach of the agreement. This arbitration can take place after good-faith negotiations between the parties have failed or can be mandatory immediately upon any breach. Many businesses like to include arbitration clauses in their contracts because it simplifies the process of rectifying a breach. Arbitration can be cheaper and more expedient than litigating the breach in court and for contracts between international parties, pursuing arbitration can be a fairer means of settling a dispute than resorting to local courts.
Normally each party will bear their own legal costs during an arbitration. This creates a fair standard where each party has a firm grasp of the eventual legal fees. However, for parties who want to employ a different type of fee arraignment, it is possible to draft the arbitration agreement to fit their needs.
Jurisdiction is a critical component of civil litigation. Whether a court has jurisdiction or not determines whether it can issue a binding court ruling to the parties. There are two main ways Japanese courts can obtain international jurisdiction: either through international treaties or local Japanese laws. In either case, it may also be necessary to conduct special service of process through the Hague Service Convention.
A judgment at trial declares a winner and a loser to the lawsuit but the losing party still has an opportunity to continue the fight. The losing party may file an appeal with a court of second instance and ask this higher court to review the decision made by the trial judge.