Arbitrations are designed to be a fair and unbiased method to settle disputes without resulting to the judicial system. However, for some parties, the location of the arbitration still presents a potential for bias. In cases where the parties wish to ensure that the arbitration is as fair as possible, holding the arbitration in a neutral 3rd country may help ease the worry that the arbitrator might be biased.
Both parties will need to bear the expense of traveling to the 3rd country and are unlikely to have contacts or long relationships with the arbitrators there that might influence their decisions. Furthermore, having each side appoint one arbitrator, and having a third arbitrator chosen by the first two, can help assure both sides to a dispute that their matter will be resolved in a fair and unbiased manner.
If you have any questions about arbitration in Japan, please contact our office for a legal consultation.