Government of Canada
Government of Quebec
Japan External Trade Organization

Export Food Products Seminar for Japan
Montreal, P.Q., Canada
February 15, 1990

“Conflict Resolution: Japan and North America Harmonized”

by Jack R. Miller

“Among the more persistent fictions about dispute resolution in Japan and other countries in East Asia is the notion of a shared preference for arbitration over litigation. As explained at the outset of this chapter, Japanese demonstrably prefer voluntarily negotiated or mediated settlements to any form of third party adjudication, such as both arbitration and litigation, in which the parties lose control over the outcome.”

CCH Japan Business Law Guide

We know from statistics that the vast majority of conflicts and disputes are resolved and settled by the parties themselves, sometimes with the assistance of third parties, and in any event before adjudication to the extent of 90–95%.

However, too often, this happens in an unsatisfactory way after much wasted time, effort and money. There are now a significant number of new techniques for getting the job done better, faster and with less waste. These new techniques have had the effect of sharpening the old techniques so that now we have a whole new tool box.

I have counted 34 tools in that tool box. I have annexed a list to my paper. There is a tool which could match the need for most jobs and if a tool does not quite fit, then a new tool can be fashioned on the spot. The effect is increased value in terms of interests at stake, especially future relationships, such as relationships with customers.

I call this comprehensive approach a technological breakthrough. It is known in the profession as “ADR”, Alternative Dispute Resolution, although I prefer the term Appropriate Dispute Resolution. The idea is to examine the need and design a system for it, rather than to make all needs fit into one system. Each system has its niche and appropriateness. Sometimes several approaches work in combination and produce a synergy which gets the job done.

ADR is of particular interest in trade relations between North America and the Far East because ADR offers the opportunity to harmonize intercultural dispute resolution. ADR creates a common ground, if we can believe the CCH Japan Business Law Guide and I see the CCH assessment corroborated by other experience and reports. 

In an article in Psychology Today, November 1987, two American clinical psychologists, Cathy Colman and David McGill, working in Japan made the following observations about their experience: 

“There, the theories derived from a culture that stresses individuality, independence, directness and verbal expression met a culture that values group identity, deference to authority, indirectness and intuition.”


“I think I understand much more the power of introducing things indirectly, in ways that allow listeners to make choices on their own,” McGill said. “In our society, we’re so used to talking in ways that emphasize our separateness. To live in Japan is to learn about empathy and really joining other people in their world.”


“There is the continuing wonder at the meaning of things unexpressed. “If I met you here,”, Colman explains, “I’d want to know about you, about your work, your kids. But if we were Japanese, we’d want to find out how to enter a space together. We might talk about how beautiful the temple is in moonlight. Do you know, we got a postcard showing a full moon from our landlord. All he said was, ‘The moon touched the blossoms,’ and he signed his name.” 

Empathy is one of the resources that ADR harnesses for conflict resolution and dispute settlement, seeing the other person’s point of view and perspective without giving up or losing sight of one’s own outlook.

Recently, at the American Bar Association Annual Meeting in Honolulu, I observed a demonstration of ADR between Japanese and American interests. It was a mini-trial.

A mini-trial is one of the new techniques which has become widely known. Originally, it was developed and used to resolve a complex patent infringement suit. In its original form, it was called an information exchange but a New York Times reporter labelled it a mini-trial and the name has stuck. The mini-trial is really a structured negotiation which takes into account the different dynamics of conflict resolution and dispute settlement. 

Anachronistically, the standard dispute resolution clause in many transnational contracts has not evolved to take into account the availability of these new methods. The standard clause provides for arbitration, which may be appropriate for some disputes, especially if an updated modern arbitration model is adopted such as that proposed by the Center for Public Resources in New York, but arbitration may not be appropriate for all disputes. 

I have developed a clause with the assistance of clients and opposing counsel providing for multiple options. I think that it could be applied in Canada-Japan trade with a few cosmetic changes. Here is the clause in the form in which it has been used in a transnational contract:

“In the event of a dispute related in whole or in part to this Agreement, the parties agree to proceed to settle the dispute in an efficient and effective manner. The claimant shall have the choice of procedure which may include judicial adjudication, arbitration, conciliation, mediation or any other procedure for settling disputes. The respondent shall have the choice of third party to assist the parties in settlement of the dispute, provided that the third party has no bias and is perceived by the claimant to have no bias. The resulting agreement shall constitute a transaction having the authority of a final judgement.”

«Advenant un différend relié en tout ou en partie à cette entente, les parties s’engagent à procéder à la solution des conflits et au règlement des différends par les méthodes les plus appropriées. Celui qui revendique aura le choix de l’option; les options peuvent inclure l’adjudication judiciaire, l’arbitrage, la conciliation, la médiation ou tout autre processus pour la solution des conflits et le règlement des différends. Le défendeur aura le choix de la personne neutre, pourvu que cette personne neutre n’ait pas de préjugé et ne soit pas perçue comme ayant un préjugé. L’entente qui pourrait résulter sera une transaction ayant l’autorité d’un jugement final.» 

The multiple options can be classified for purposes of use in two basic groups: adjudicative and facilitative. Adjudicative options, such as trials, hearings, arbitrations and private judging, involve the third party resolving the conflict and settling the dispute for the parties after due process. Facilitative approaches involve a third party in a supporting role to the parties as principals. The job of the third party is to assist the parties to themselves resolve the conflict. 

ADR focuses on relationships and tries to build relationships as a setting for conflict resolution and dispute settlement. The concept of principled negotiation, the modern approach to negotiation which is gradually displacing positional negotiation, as reported in the now classic work by Roger Fisher and William Ury entitled “Getting to Yes – Negotiating Agreement Without Giving In” widely available as a Penguin paperback, emphasizes the importance of being ‘soft on people – hard on issues’. 

The old notion of negotiation as ‘give and take’ is limited in its application to a relatively few situations. This is the classic win–lose, zero sum approach. The modern notion is ‘win–win’, finding solutions which work for both parties. How is it possible to reach agreement most of the time ‘without giving in’? This is the subject matter of ADR. ADR employs a wide variety of techniques to achieve these goals, borrowing from a wide variety of disciplines such as psychology, economics, management, engineering, political science, medicine and, of course, law. The goal is not only to settle the dispute but also to resolve the underlying conflict and open up the way for future dealings.

Dr. Dennis Pirages of the University of Maryland stresses the following cross cultural differences between North America (He was speaking of the U.S.A. but we Canadians can develop the Canadian counterpart!) and the Far East:

1. Differences in social structure – ascribed status vs. achievement. Asian negotiators have a rigid social structure and expect us to respect it.

2. Business and pleasure – Asians are interested in multidimensional relationships – therefore heavy emphasis on entertainment and non-task sounding activities.

3. The time frame in Asia is different – Things worth doing are worth doing slowly. Agreements are expected to be of long duration – negotiations can’t be rushed.

4. The role of the individual is different – the lone ranger is fine by American standards – the Asians see themselves as part of the team and really can’t engage in freelancing. Less destabilization on a Japanese team.

5. The need for consensus is strong in Asia – much time will be spent clearing proposals at all levels so that consensus can be built – Americans are much more likely to disregard the need for harmony.

6. Asians pay much more attention to formality – easily offended by firstname informality – Official signing of agreements.

7. Somewhat paradoxically Americans are more interested in formal legalisms – Asians operate with a handshake. Americans want to spell out in contractual detail. The U.S. is seen as a nation of lawyers – very few in Japan.

8. Asians have difficulty with confrontation – can’t say no – Americans relish the combat – have strong feelings about “winning” a negotiation.

9. American table teams have much more authority than those in Asia – Asians can’t cut deals at the table.

10. Asian concern with personal evaluation of counterparts – Americans will do business with anyone.

11. Situational ethics in Asia – what applies in one context might not apply in another – there is no “complete” moral code.” 

In an article by Nathaniel B. Thayer and Stephen E. Weiss entitled “The Changing Logic of a Former Minor Power” in a series of articles on National Negotiating Styles published by The Center for the Study of Foreign Affairs, Foreign Service Institute, U.S. Department of State, the authors compare negotiating behaviour as follows:



      1.Establishing a first position is almost a public process with executive agencies, Congress, and interest groups involved – each fighting to have its interests recognized. No particular attempt is made to exclude the Japanese from this process.

      2.The first position is sometimes overstated to allow for retreat. Economic positions are often cast in harsh, challenging language.

      3.Final formulation of the first position is hidden. Revelation made at first negotiating session.

      4.Americans respond to newsmen on an “if–asked” basis. There is an adversarial relationship between officials and reporters. Officials favor the domestic press only slightly over the foreign press.

      5.Americans try to maintain secrecy over the course of the negotiations until the end of a negotiating session.

      6. Americans like to establish a principle and then search out a solution based on that principle.



1. Formulating a position is an internal process with an active attempt to keep Americans out of the process. Japanese spend much time reaching consensus among themselves.

2. The first position is rarely overstated, though sometimes fuzzy. Japanese like to regard their position as reasonable for both sides. 

3. The Japanese position is usually leaked to some American before it is formally revealed.

4.  Japanese officials initiate encounters with the press. They expect, and often get, editorial sympathy from the domestic press, at least in foreign economic negotiations. Officials isolate foreign press from domestic press.

5.  Japanese usually reveal the tenor and substance of the negotiations and sometimes the details as the negotiations go along.

6.  Japanese like to talk about practical solutions, resolving matters case–by–case. They allow the solution to precede the principle.


7.     The American tendency is to compromise too soon, particularly if Japanese negotiators recognize the American principle.

8.     Americans place great value on winning an argument.

9.     Americans are adversarial. 

10.   Americans cast negotiations in terms of victory/defeat. 

11. Americans tend to conduct their business in the negotiating hall, though they are aware that activities outside can be important. 

12.   Americans see the negotiated solution as final and implementation naturally flowing therefrom.



7.   Japanese find compromise difficult. They often create a fictive principle or offer meaningless concessions.

8.   Japanese try to stress areas of agreement. 

9.   Japanese try to avoid contention. 

10. Japanese negotiate to avoid failure.

11. Japanese would like to conduct real negotiations away from the formal negotiating hall, using formal session to announce agreements reached elsewhere.

12. Japanese see the negotiated solution as one more stage and implementation as a subject for further negotiation.”

In conclusion, I recommend a multiple option approach to dispute resolution in order to be able to use the approach most appropriate to the circumstances and needs of the parties. The accent is on improving the quality of the result in terms of currency, time, flexibility, knowledgeability, confidentiality, etc. and keeping waste to a minimum.

An example of the flexibility of ADR and its responsiveness to needs is that the product of a mediation could by agreement be converted into an arbitration award in order to benefit from international enforcement mechanisms. This is the option known as ‘med–arb’.

Japanese conflict resolution methods and several North American ADR options will prove congruent and create a common ground for conflict resolution and dispute settlement, leading to continued and healthy business relationships for the future.


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