Naturally, when contemplating arbitration, each party will want to nominate as many arbitrators to the panel as possible to increase their chances of obtaining a favorable outcome. If one side gets to pick all of the arbitrators to a dispute, it is more likely that the dispute will be resolved in their favor. However, arbitration agreements that grant too much power to only one party are invalid and therefore, clauses granting one party unilateral power to appoint arbitrators is invalid under Japanese law.
The Supreme Court of Japan is composed of one Chief Justice and fourteen Justices who are appointed by the Cabinet and approved by the Emperor. Each of these Justices must stand for election after appointment and once every 10 years following, however no Justice has ever lost a reappointment election. Supreme Court Justices must retire at the age of 70.
The Supreme Court is the highest court in Japan and the final arbitrator of legal disputes. For a case to get heard by the Supreme Court it must have been litigated, and have reached a judgment, at every lower court without having settled or been dismissed. Therefore, it is quite rare for cases to reach the level of the Supreme Court in Japan.
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.