A. LEGISLATION AND RULES
A.1 Legislation
International arbitration proceedings in Taiwan continue to be governed by the Arbitration Law, to which there have been no legislative amendments in the past year. In 2023, Taiwan’s Ministry of Justice, Executive Yuan, proposed to amend the Arbitration Law in its annual plan; however, no amendment draft has been introduced to date. The subsequent developments require further observation.
A.2 Institutions, rules and infrastructure
The Chinese Arbitration Association, Taipei (CAA) remains the leading arbitration institution in Taiwan. There has been no amendment to the CAA Arbitration Rules in the last 12 months.
B. CASES
B.1 A foreign arbitral award having been recognized by a court has the same force as a final judgment of a court and may constitute the enforcement title; the debtor may not institute an objection suit against the creditor based on the supporting facts prior to the time when the enforcement title is created
In 2007, the appellant of this case (Supreme Court 111 Year Tai-Shang-Tzu No. 202 Civil Judgment, which was announced on 21 April 2023) and the appellee entered into a Development and Supply Agreement and its addendum, which contained an arbitration clause. In 2014, for the contractual disputes, the appellee filed an application for arbitration with the Japan Commercial Arbitration Association, which in 2016 made the arbitral award stating that the appellant shall pay the appellee JPY 624,253,753 and the interest thereof.
The appellee filed an application for recognition of the foreign arbitral award with the Taiwan Tainan District Court, and the foreign arbitral award was then recognized by the same court. As the foreign arbitral award became the enforcement title after recognition, the appellant instituted an objection suit against the enforcement title, arguing that the Development and Supply Agreement and its addendum were inherently null and void.
The Supreme Court agreed with the Taiwan High Court’s view stating that according to Article 47 of the Arbitration Law, as the arbitral award in question had been recognized by a Taiwan court, it had the same force as a final judgment of a court and may constitute the enforcement title. If the appellant intended to institute an objection suit against such enforcement title, the supporting facts of the objection, i.e., the fact that the Development and Supply Agreement and its addendum were null and void, must occur after the enforcement title was created. Thus, the Supreme Court upheld the judgment rendered by the Taiwan High Court, denying the appellant’s objection suit.
B.2 The Non-litigious Act is applicable to the recognition of foreign arbitral awards; thus, the re-appeal against the ruling that granted the recognition of foreign arbitral award is limited to the circumstance where the ruling is “clearly erroneous in the application of law,” not including the circumstances where the ruling does not provide reasons and where the findings of facts and the selection of evidence in the ruling are inappropriate
The re-appellant of this case (Taiwan High Court 112 Year Fei-Kang-Tzu No. 43 Civil Ruling, which was announced on 8 August 2023) first filed the appeal with Taiwan New Taipei District Court against its ruling recognizing the foreign arbitral award at issue made by the Hong Kong International Arbitration Centre in 2022. To the appeal above, the Taiwan New Taipei District Court rendered the ruling (“Original Ruling“), stating that as the legal effect of recognizing the said foreign arbitral award would not be contrary to the “public order or good morals” set out in Article 49, Paragraph 1, of the Arbitration Law, nor had the circumstance set out in Article 50, Subparagraph 2, of the Arbitration Law occurred, the appeal against the ruling recognizing the foreign arbitral award at issue made by the Hong Kong International Arbitration Centre should be dismissed.
The Taiwan High Court held that the Non-litigious Act is applicable to the recognition of foreign arbitral awards. Thus, the re-appeal against the ruling that granted the recognition of foreign arbitral award is limited to the circumstance where the ruling is “clearly erroneous in the application of law,” not including the circumstances where the ruling does not provide reasons and where the findings of facts and the selection of evidence in the ruling are inappropriate. As such, the Taiwan High Court, as the trial of law, examined and then determined that the original ruling was not clearly erroneous in the application of law, and eventually dismissed the re-appeal.
