The Journal The Authority on Global Business in Japan

On August 9, the American Chamber of Commerce in Japan (ACCJ) Kansai chapter hosted a special presentation about the outcome and potential impact of the Brexit referendum. In this vote, which took place on June 23, British, Irish and most Commonwealth citizens aged 18 and over who live in the UK, and Britons who have lived abroad for less than 15 years chose by a slim margin to leave the European Union. Brexit is being called one of the most significant events in post-war European history, and there is no doubt that it will have major political, legal, and economic implications around the globe.

The presenters were Jiri Mestecky, partner and registered foreign attorney with the Japanese law firm of Kitahama Partners (Osaka Office), who is also the head of Kitahama Partners’ European Practice Group and a former ACCJ governor and vice president–Kansai; and Christopher Hunt, partner and registered foreign attorney with the Tokyo office of the London-based international law firm of Herbert Smith Freehills.

The basic topics covered in the presentation were: (1) an overview of the European Union; (2) possible scenarios for the future relationship between the UK and EU; (3) short-term and long-term Brexit consequences; and (4) what businesses can do now to prepare for Brexit.

With respect to the first topic, even after the Brexit vote there continues to be confusion in the UK and other countries regarding exactly what the EU is and how it functions. Therefore, one of the main reasons for the presentation was to provide some explanation, and to clarify the working, of the EU as well as its organs and peripheral organizations, based on which the possible future Brexit consequences and relationship scenarios for the UK and EU could be better understood.

Another important area and source of debate covered in the presentation was the issue of the EU Single Market, and how access thereto by the UK—as well as by foreign investors from Japan, the United States, and elsewhere based in the UK—might be affected by Brexit. We also discussed the legal and political processes that will need to take place to actually trigger the withdrawal, as well as the possible business consequences.

In addition, we provided certain Brexit-proofing measures from a primarily legal perspective that businesses can take at present to prepare. These measures include: (1) monitoring developments on negotiations between the UK and EU on jurisdiction and reciprocal enforcement to ensure that judgments remain enforceable; (2) amending dispute resolution provisions in commercial contracts to allow for arbitration as an alternative to litigation if desirable; (3) amending jurisdiction and governing law provisions of commercial and other contracts to prepare for the UK’s withdrawal from the EU; and (4) amending commercial and other contracts to ensure that important contractual definitions such as force majeure and material adverse change either do or do not include the UK leaving the EU.

The attendees were a diverse group, with members of many nationalities representing various types of companies and other organizations. After the main presentation, there was a Q&A session which was extremely lively, interesting, and demonstrative of the concern that exists both in and outside Europe with respect to Brexit. Based thereon, the speakers plan to continue conducting seminars that will keep ACCJ members, clients, and others informed about the consequences and impact of Brexit as the situation develops and negotiations between the UK and EU progress.

Jiri Mestecky is partner and registered foreign attorney with the Japanese law firm of Kitahama Partners (Osaka Office)
Brexit is being called one of the most significant events in post-war European history.