Legal Culture and Commercial Arbitration in the United States and Japan

In this paper, a conceptual model of legal culture based on Ehrlich's "living law" theory and Cole's social-cultural explanation can explain the low utilization rates of arbitration of Japan and the high utilization rates of arbitration in the United States, simultaneously. This model highlights the clash between social norms and legal provisions in Japan. Japan has developed a two-tiered system of dispute resolution. At the official level, Japanese people accept the legal system imposed by the outside world. But, at a deeper level, they utilize diverse forms of informal dispute resolution mechanisms, such as reconcilement and conciliation, reflecting their own social norms. In contrast, there is no conflict between social norms and legal provisions in United States. This study may show that there are distinctions between American-style arbitration and Japanese-style arbitration, reflecting their own respective social norms. The question of reconciliation between the American style of arbitration and the Japanese style of arbitration can be resolved by an international arbitrator.