THE RULES OF THE SMALL CLAIMS
ARBITRATION PROCEDURE (SCAP)
OF TOMAC

Article 1. [Definition]

The Small Claims Arbitration Procedure in these Rules means arbitration procedure which is performed with expedition and simplicity, regarding a dispute over a claim not exceeding, in principle, Five Million Yen (¥5,000,000), under these Rules in place of the Ordinary Rules, by agreement between both parties.

Article 2. [Relation between these Rules and the Ordinary Rules]

All matters which are not covered by these Rules shall be governed by the Ordinary Rules.

Article 3. [Application for the Small Claims Arbitration Procedure]

An applicant for the Small Claims Arbitration Procedure under these Rules (hereinafter referred to as "the Claimant"), shall file with the Secretariat the following documents in three copies (in respect of items 4 and 5, one copy each is sufficient):

1. Statement of Claim in the Small Claims Arbitration Procedure;
2. A document evidencing the agreement that any dispute shall be referred to arbitration of JSE or arbitration in accordance with these Rules;
3. Documentary evidence in support of the claim, if any;
4. Where a party is a body corporate, a document evidencing the capacity of its representative;
5. Where an attorney is nominated by the Claimant, a document empowering the attorney to act on behalf of the Claimant.

Article 4. [Acceptance of Application for the Small Claims Arbitration Procedure]

When the Secretariat acknowledges that the application complies with the requirements of Section 3, it shall accept the application.

Article 5. [Filing of Defense and Supplementary Statement in the Small Claims Arbitration Procedure]

(1) When the Secretariat has accepted the application for the Small Claims Arbitration Procedure, the Secretariat shall forward to the other party (hereinafter referred to as "the Respondent") a copy of the Statement of Claim in the Small Claims Arbitration Procedure together with copies of the documentary evidence, and instruct the Respondent to send to the Secretariat and the Claimant respectively within 15 days from the day of receipt of such instruction a Defense in the Small Claims Arbitration Procedure and any supporting evidence.
(2) Where there is no document evidencing the agreement to refer a dispute to arbitration under these Rules, the Secretariat shall forward to the Respondent, together with those documents specified in the preceding Sub-Section, a notice in writing to the effect that TOMAC shall proceed with the Small Claims Arbitration Procedure unless the Respondent submits an objection in writing thereto within the period stipulated in the preceding Sub-Section. Where the Respondent has not submitted an objection in writing within the said period, the Respondent shall be deemed to have confirmed that the dispute should be submitted to the Small Claims Arbitration Procedure under these Rules.
(3) When the Claimant has received the Defense and documentary evidence if any, the Claimant shall, if it has any objection to the Defense, send its Final Supplementary Statement and further documentary evidence, if any, to the Secretariat and the Respondent, respectively, so that such Final Supplementary Statement and further documentary evidence, if any, are received within 10 days from the day of receipt by the Claimant of the Defense and documentary evidence, if any.
(4) When the Respondent has received the Final Supplementary Statement and documentary evidence, if any, the Respondent shall, if it has any objection thereto, send its Final Supplementary Statement and further documentary evidence, if any, to the Secretariat and the Respondent, respectively, so that such Final Supplementary Statement and further documentary evidence, if any, are received within 10 days from the day of receipt by the Claimant of the Defense and documentary evidence, if any.

Article 6. [Counterclaim by Respondent]

(1) If the Respondent wishes to apply for the Small Claims Arbitration Procedure of a counterclaim arising out of the same cause or matter, the Respondent must do so within the period stipulated in Article 5(1).
(2) When such an application has been made within the period stipulated in Article 5(1), the Small Claims Arbitration Procedure of such counterclaim shall, in principle, be performed concurrently with the Small Claims Arbitration Procedure applied for by the Claimant.

Article 7. [Costs of Arbitration]

(1) The Claimant shall, when applying for the Small Claims Arbitration Procedure, pay to the Secretariat a Filing Fee in the amount of Thirty Thousand Yen (¥30,000) together with the amount defined in the Tariff of Fees for the Small Claims Arbitration Procedure (hereinafter referred to as "the Arbitration Fee").
(2) The provision in the preceding Sub-Section shall also apply to an application for the Small Claims Arbitration Procedure of a counterclaim.
(3) Each party shall pay the consumption tax imposed on the amount of the each fee as provided in the preceding paragraphs.
(4) The Filing Fee shall not be refunded after the application for arbitration has been accepted.

Article 8. [Appointment of Arbitrator]

TOMAC shall, within 10 days from the day when the Respondent's Defense was filed or should have been filed, whichever is earlier, appoint a sole arbitrator from the persons listed on the Panel of TOMAC Arbitrators who has no connection with either of the parties or the matter in dispute.

Article 9. [Hearings]

(1) The Tribunal shall conduct a hearing by way of the examination of documents, in principle, within 15 days from the day of appointment. There shall be no oral hearing unless the Arbitrator deems it necessary.
(2) Where the Tribunal deems it necessary to give an oral hearing, the Arbitrator shall, in principle within 15 days from the day of appointment, hold the hearing in the presence of all parties. In the absence of exceptional circumstances, there must be only one oral hearing.

Article 10. [Disclosure of Documents]

The Tribunal may require from the parties production of the following documents which are certain to exist but have not been produced by the parties as evidence:

1. A document signed by the parties and having a connection with the dispute;
2. Any document which is usually created in the ordinary course of dealings between the parties;
3. Any document which the party who bears the burden of proof is legally entitled to request the production of from the party holding such document, and any other documents which the Tribunal deems necessary or appropriate.

Article 11. [The Award]

(1) The Tribunal shall issue an award on the case promptly after conclusion of the hearing pursuant to Article 9.
(2) In the Award of the Small Claims Arbitration Procedure, items 3 and 4 of Article 35(1) of the Ordinary Rules may be described as briefly as practicable.

Article 12. [Period of Grace]

(1) Where the Tribunal awards the claim in whole or in part to the Claimant, the Arbitrator may, having considered the Respondent's solvency, the trade relationship between the parties and/or other pertinent circumstances, grant the Respondent such terms of payment including but not limited to the following: (a) a period of grace for payment; (b) payment by instalments within a period not exceeding 3 years without incurring default interest for so long as such payments are being timely made pursuant to the installment schedule; and/or (c) issuance of promissory notes on such instalments.
(2) If the Tribunal grants such payment method, it must state in the award that in the event of nonfulfilment of the obligations by the Respondent in respect of such payment the Respondent shall forfeit the benefit of the period of payment and must pay any outstanding balance immediately together with interest which the Claimant would have earned had the Arbitrator not granted such payment method.
(3) Where the Arbitrator awards the counter-claim in whole or in part to the Respondent, the preceding Sub-Sections shall also apply thereto.

Article 13. [Notarial Deed]

(1) The Tribunal may, in awarding all or part of the monetary claim to the Claimant, recommend that the parties obtain a notarial deed for compulsory execution of the award.
(2) When the parties agree on such notarial deed, the Secretariat shall perform the notarization work on behalf of the parties. In this case, the Secretariat shall require from the Claimant reimbursement of the fee paid to the Notary Public plus a charge of Ten Thousand Yen (¥10,000) to cover the administrative expenses.
(3) Where the Tribunal awards all or part of the counter-claim to the Respondent, the preceding Sub-Sections shall also apply thereto.

Article 14. [Apportionment of Costs of Arbitration]

The costs of the Small Claims Arbitration Procedure shall be paid from the Filing Fee and Arbitration Fee paid to the Secretariat under Section 7 and the ratio which each party shall bear shall be decided by the Tribunal.

Article 15. [Omission of Procedure by Agreement]

Where the parties agree that a certain part of the arbitral procedure under these Rules is to be omitted, the Tribunal may, in its discretion, omit such part.

The Tariff of Fees for the Small Claims Arbitration Procedure

    The amount of the Small Claims Arbitration Procedure Fee to be paid shall be as follows:

• Five percent (5%) of the amount of the claim and of the counter-claim, if any, but in any event not less than One Hundred Thousand Yen (¥100,000).