繁體中文 English
About LCP Attorneys Information Welcome
 
  How to Prevent and Handle Stowaways
 
Arbitration - Taiwan - Overview
 
  Supreme Court Confirms Validity of Pre-arbitration Procedure Provisions
 
  Arbitral Awards Cannot be Vacated for Insufficient Reasoning
 
  Grounds for Vacation of Arbitral Award Must be Spelled Out from the Outset
 
  Awards Cannot be Vacated for Improper Application of Statutory Provisions
 
  Corporate Governance ~ Focus on the Comparison of Independent Directors under American Corporate System and Supervisors under Taiwanese Corporate System
 
Arbitration - Taiwan – Overview
  By Joseph B. H. Chang
 

Promulgation of the Arbitration Law

The existing Arbitration Law, which is largely based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law, took effect on December 24 1998 and was slightly amended in 2002.

The Chinese Arbitration Association, established in 1973, is the main body designated to handle disputes. The use of arbitration procedures has been increasing and at present over 100 cases a year are settled through arbitration, with the value of disputes totalling more than US$3 billion.

Arbitrable Disputes

The Arbitration Law provides that the parties to a dispute may enter into an arbitration agreement to resolve a dispute, whether this exists at the time or arises in the future. The arbitration agreement must be evidenced in writing, which includes written documents, letters, faxes, telexes or other similar methods of communication sufficient to prove the existence of the arbitration agreement.

The Arbitration Law has expanded the applicable scope of arbitration beyond commercial disputes, and thus any civil legal disputes may be arbitrated in accordance with the Arbitration Law, provided that there is a valid arbitration agreement as defined by the Arbitration Law between the parties.

Arbitration is widely used in construction disputes in Taiwan. The Arbitration Law is designed to make arbitration more accessible and to encourage companies to adopt it as their preferred method of dispute resolution.

Parties' Autonomy to Define Procedure

The provisions of the Arbitration Law regarding the arbitration procedure are not mandatory. The parties may set out their own procedure by agreement - for example, they may choose the arbitration rules of an international arbitration institution. If there is no such agreement, the procedure prescribed in the Arbitration Law will apply (Article 19).

Court Intervention

The courts cannot intervene before or during arbitration proceedings. However, the courts may exercise their power to assist or supervise the arbitration in the following situations, among others:

  • to appoint the presiding arbitrator of the arbitral tribunal, if the two arbitrators respectively elected by the parties cannot not reach agreement on choosing the presiding arbitrator;
  • to appoint the sole arbitrator, if the parties cannot reach agreement on choosing the sole arbitrator in cases where it was agreed the dispute would be arbitrated by one arbitrator;
  • to decide upon an application for withdrawal of the sole arbitrator; and
  • to decide upon an objection against the decision of the arbitral tribunal regarding the application for withdrawal of an arbitrator.

Court Interim Relief

A party to an arbitration agreement can apply for provisional seizure or injunction in accordance with the Civil Procedure Code before it files the request for arbitration (Article 39).

Language

The parties to international arbitration proceedings may choose by agreement the language used in the proceedings, and the parties and the tribunal may require translations into languages other than the chosen language (Article 25).

Application of Equity Principle

With explicit agreement by the parties to a dispute, the tribunal may apply the equity principle in order to judge the dispute (Article 31).

Decision-Making by Arbitral Tribunal

The time limit for decision-making by an arbitral tribunal is six months after the date on which both parties were notified of the place and time of the first hearing, although this period may be extended to nine months if the circumstances so demand. The arbitral award must contain the facts of the dispute, the reasons for the decision and other items prescribed by the Arbitration Law.

Confidentiality

An arbitrator must keep secret all confidential information disclosed to him or her. Unless both parties consent or laws explicitly authorize otherwise, an arbitral tribunal or an arbitration association is prohibited from disclosing the arbitral award and the relevant materials to the public. Disclosure of the discussions forming a decision by an arbitral tribunal is prohibited.

Enforcement of an Arbitral Award

In principle, an arbitral award will be executed after one party petitions the court to issue an order to this effect. However, an arbitral award can be executed without a court order if it consists of the payment of a specified sum of money, delivery of a specific amount of fungible things or securities, or delivery of a specified movable property, and the parties involved have agreed the same in writing.
The Arbitration Law lists the following circumstances under which a court will not issue an order to enforce an arbitral award:

  • if the award is irrelevant to the dispute as set out in the arbitration agreement, or is beyond the scope of the arbitration agreement (however, if a portion of the award is not in dispute and can stand independently, that portion may be accepted by the court);
  • if no reasons are stated in the arbitral award, unless subsequently amended by the arbitral tribunal; or
  • if the award requires a party to act in a way which is prohibited by law.

Recognition and Execution of Foreign Awards

Foreign arbitral awards are awards made outside of the territory of Taiwan or made in Taiwan in accordance with foreign rules of arbitration, including the arbitration rules of international organizations (eg, the UNCITRAL Model Law).
According to Article 49 of the Arbitration Law, a foreign arbitration award is not recognizable and enforceable in Taiwan if:

  • recognition or enforcement of the foreign arbitration award is contrary to public order or morality;
  • the dispute under the foreign arbitration award cannot be resolved by arbitration according to the laws of Taiwan; or
  • the country in which the foreign arbitration award was rendered, or the country whose arbitration laws or regulations apply to the arbitration award, does not grant recognition to arbitration awards rendered in Taiwan.

Article 50 of the Arbitration Law provides further that recognition of a foreign arbitration award shall not be granted in any of the following circumstances:

  • if the arbitration agreement is invalid because a party lacks capacity according to the governing law;
  • if the arbitration agreement is invalid according to the governing law chosen by the parties or, in the absence of a choice of governing law, is invalid according to the law of the country where the arbitration award is rendered;
  • if one of the parties has not been given proper notice of the appointment of an arbitrator or of any other matter required in the arbitration proceedings, or where there are other circumstances which give rise to lack of due process;
  • if the arbitration award is not relevant to the dispute which is the subject matter of the arbitration agreement or exceeds the scope of the arbitration agreement, unless the arbitration award can still be established after the removal of the offending portion;
  • if the composition of the arbitration tribunal or the arbitration procedure contravenes the arbitration agreement or, in the absence of an agreement between the parties, contravenes the law of the place of arbitration; or
  • if the arbitration award is not yet binding on the parties or has been revoked or suspended by the agency of competent jurisdiction.

Recourse against an Award

A party to an arbitration may bring a lawsuit in order to vacate the arbitral award in one of the following circumstances, among others:

  • in those circumstances mentioned above under which a court will not issue an order to enforce an arbitral award;
  • if the arbitration agreement is invalid or became invalid during the arbitration proceedings;
  • if the composition of the tribunal violated the arbitration agreement or laws;
  • if a party was not legally represented;
  • if the evidence on which the award is based is false or forged; or
  • if the judicial ruling or administrative disposition on which the award is based has been irrevocably and finally revised by a subsequent ruling or disposition.
   
   
地址: 103 台北市大同區民權西路104號7樓之1。 Tel: 886-2-2557-3036 Fax: 886-2-2557-3035
Copyright © 2011 Liu , Chang & Partners . All Rights Reserved