Mediating Japan-Korea Trade and Investment Tensions

in Nottage, Luke; Ali, Shahla; Jetin, Bruno; Teramura, Nobumichi (eds), "New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution", Wolters Kluwer, (Forthcoming)

Sydney Law School Research Paper No. 19/73

22 Pages Posted: 5 Dec 2019 Last revised: 26 May 2020

See all articles by James M. Claxton

James M. Claxton

Rikkyo University

Luke R. Nottage

The University of Sydney Law School; The University of Sydney - Australian Network for Japanese Law

Brett G. Williams

Williams Trade Law; The University of Sydney Law School

Date Written: December 3, 2019

Abstract

This paper first describes the trade tensions between Korea and Japan that escalated from mid-2019. It assesses Korea’s prospects in a formal claim now brought before the World Trade Organization, noting difficulties with substantive law, but especially procedure given the general breakdown in the WTO’s usual two-tier inter-state dispute resolution process. The paper then outlines the possibility of Japan bringing claims under a 1965 Treaty that purported to settle claims resulting from Japan’s colonisation of Korea, or under bilateral or trilateral investment treaties, regarding Korean courts recently ordering Japanese companies to pay compensation to colonisation-era Korean labourers. Yet such claims also face procedural and/or substantive law difficulties. The paper further elaborates the possibility of affected Japanese companies instead or in parallel bringing investor-state dispute settlement claims against Korea, similarly alleging denial of justice in Korean court proceedings, under the two investment treaties. We conclude that these extra complications bolster the attraction of a formal mediation to bring both countries and the affected companies together in order to achieve an overall negotiated settlement.

Keywords: international economic law, foreign investment law, WTO, ISDS, dispute resolution, arbitration, mediation, Asian law

JEL Classification: K10, K30

Suggested Citation

Claxton, James M. and Nottage, Luke R. and Williams, Brett G., Mediating Japan-Korea Trade and Investment Tensions (December 3, 2019). in Nottage, Luke; Ali, Shahla; Jetin, Bruno; Teramura, Nobumichi (eds), "New Frontiers in Asia-Pacific International Arbitration and Dispute Resolution", Wolters Kluwer, (Forthcoming) , Sydney Law School Research Paper No. 19/73, Available at SSRN: https://ssrn.com/abstract=3497299 or http://dx.doi.org/10.2139/ssrn.3497299

James M. Claxton

Rikkyo University ( email )

3-chome Nishi-ikebukuro
Toshima-ku
Tokyo, 171-0021
Japan

Luke R. Nottage (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

The University of Sydney - Australian Network for Japanese Law

Room 640, Building F10, Eastern Avenue
Sydney, NSW 2006
Australia

Brett G. Williams

Williams Trade Law ( email )

2/61-67 Varna Street
Clovelly, NC New South Wales 2031
Australia
0425340481 (Phone)
2031 (Fax)

HOME PAGE: http://www.williamstradelaw.com

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia

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