Commercial contracts frequently contain mediation clauses requiring parties to mediate as part of a sequence of dispute resolution methods, where they progress from consensus to evaluative methods until resolution is reached. Careful drafting is required to ensure such clauses are effective and enforceable. The primary issues relevant to the enforceability of mediation clauses include severability, certainty, completeness, attempts to oust the court’s jurisdiction, additional policy considerations, certainty, waiver and remedies for breach of mediation clauses. While compliance with mediation clauses is not easy to determine, only the narrowest of requirements has proven workable in practice. Regional and international instruments covering mediation tend not to provide for the enforcement of mediation clauses. There is an international trend towards obligating legal advisors to discuss with their clients whether their commercial disputes are suitable for mediation, and policy in many jurisdictions is moving towards penalising parties where mediation is not given due consideration. Similar to mediation clauses, agreements to mediate require careful drafting to ensure enforceability.

Multi-tier dispute resolution, a combination of mediation and arbitration or litigation, has recently been gaining in importance in international business transactions. While arbitration has the advantages of being confidential, professional and effective across borders owing to the 1958 New York Convention, mediation, geared towards amicable settlements, is time- and cost-efficient and supportive of preserving commercial relationships. Both methods can complement each other in ‘med-arb’, ‘arb-med’ or ‘arb-med-arb’. This chapter discusses cardinal issues surrounding multi-tier dispute resolution in Japan, particularly the enforcement of agreements to mediate as a condition precedent to arbitration or litigation, and the methods of combining mediation and arbitral procedures. At the same time, this contribution sheds light on recent developments and efforts being made in Japan to enhance international arbitration and mediation. This trend will soon bring about legislative reforms and may possibly result in the ratification of the 2019 Singapore Convention on Mediation.