I INTRODUCTION TO THE DISPUTE RESOLUTION FRAMEWORK
i Sources of law
Taiwan is a civil law country. The legal system is hierarchical. The Constitution provides the basic rules of fundamental rights and duties, government organisation (including President, executive yuan, legislative yuan, judicial yuan, examination yuan and control yuan), powers between the central and local governments, system of local government, procedure to amend the Constitution and fundamental national policies.
The civil law system is characterised by codified legal provisions. Although in theory court precedents are not binding, they play a predominant role over the court's judgments.
The procedures of litigation are governed by the Code of Civil Procedure (CCP) while the procedures of arbitration are governed by the Arbitration Law. The procedures of mediation are provided in the CCP and other laws, depending on the nature of the dispute.
Taiwan is a country with 21 prefectures and one judicial system, which has three tiers. The Taiwanese judicial system comprises five types of courts: the Supreme Court, one High Court with five branches, 22 district courts, one Juvenile and Family Court, and one Intellectual Property Court.
The Supreme Court is the highest appellate court in Taiwan. All the judgments rendered by the High Court, except for claims worth less than NT$1.5 million, can be appealed to the Supreme Court. Nevertheless, the Supreme Court decides only the issue of law, and does not examine the issue of facts.
The High Court has jurisdiction over appeals from district courts as well as the Juvenile and Family Court. The High Court decides both legal and factual issues.
The district courts are generally the courts of first instance, except for cases within the exclusive jurisdiction of other courts as stated below. They also perform as appellate courts for rulings and decisions under summary proceeding (for cases where the claim is worth less than NT$500,000 or other types of case specifically provided by the CCP)2 and small-claim proceedings (for cases where the claim is worth less than NT$100,000).3
The Juvenile and Family Court acts as the court of first instance for cases involving juvenile delinquency and family affairs. This court is located in Kaohsiung, southern Taiwan. Cases of juvenile delinquency and family affairs not within the area of Kaohsiung shall fall under the jurisdiction of a regular district court.
The Intellectual Property Court is a special court that, as the court of first instance and second instance, presides over disputes concerning IP infringement and, as the court of second instance, presides over criminal cases of IP infringement. This court also performs as the first instance of administrative actions related to disputes concerning IP validity.
Unlike common law countries, there are no jury trials and lay judges in the civil litigation cases.
iii Alternative dispute resolution
Arbitration and mediation are commonly used in Taiwan. The Arbitration Law provides the procedures of arbitration. There are some arbitration institutions established under the laws, among which the Chinese Arbitration Association, Taipei is the most used.
The CCP provides for mediation procedures held by the court. The Township and County-Administered City Mediation Act provides for other mediation procedures held by the city hall of each town and county. In addition to the foregoing mediation schemes, there are other laws outlining mediation procedures for specific disputes.
II THE YEAR IN REVIEW
The balance between preservation of the debtor's rights and the realisation of the creditor's rights
Considering that part or all of the debtor's salaries or other continual payment claims against a third party ('debtor's claims') can be maintaining the living of the debtor and his or her relatives living with him or her, in practice the court, when issuing an enforcement order, reserves a certain amount of debtor's claims for that purpose. However, usually there is insufficient information for the court to judge an appropriate reserved amount before executing the enforcement. Given this, Article 115-1 of the Compulsory Enforcement Act was amended in May 2018, providing that the extent of the enforcement order against debtor's claims shall not exceed one-third of the amount of each instalment of such debtor's claims.
III COURT PROCEDURE
i Overview of court procedure
The main law governing civil court procedure is the CCP. In terms of types of action, it governs the proceedings for both general commercial disputes and disputes regarding 'personal affairs' (i.e., marriage, parent–child relationship, interdiction and declaration of death). In terms of types of procedure, in addition to the general court proceedings, it also provides the basic requirements and rules for provisional remedies and judgment enforcement, and the details of execution are provided in the Law of Compulsory Enforcement.
Other supplemental regulations (e.g., the Enforcement Rules of the Code of Civil Procedure, the Notes for Civil Procedure, and the Guidelines for Handling Civil Actions) are applicable to civil court procedure.
ii Procedures and time frames
There are three types of proceedings provided for in the CCP: ordinary proceedings, summary proceedings and small-claim proceedings. All of the proceedings are commenced by the filing of a complaint with the competent district court. Electronic filing is acceptable.
Upon receiving the complaint, the presiding judge may either send (1) a copy of the complaint to the defendant and a summons indicating the date of the first hearing to the plaintiff and defendant respectively or (2) a copy of the complaint to the defendant along with a letter instructing the defendant to file a reply within a specified period. If the latter procedure is adopted, the judge, upon receiving the defendant's reply, will either designate the date of the first hearing or instruct the plaintiff to respond to such reply. In the latter case, the judge will not designate the date of the first hearing until he or she is satisfied with both parties' arguments and defences.
Following the first hearing, there might be several preparatory hearings depending on the intricacy of the case. The purpose of the preparatory hearing is for the judge to hear both parties' arguments and defences, collect evidence, harmonise and simplify issues and examine witnesses. During the preparatory proceedings, both parties may occasionally submit to the court their briefs, stating and providing the facts, arguments, contentions and supporting evidence. When all the preparatory work is done, the judge will set a date for an oral hearing. Although in theory the oral hearing is for the judge to hear the parties' oral argument, usually it goes quickly because the parties have substantively debated on all issues in each preparatory hearing. Should the parties have no further evidence to submit and the judge feel comfortable with the collection of the facts, evidence and issues, the judge will set a date for announcing his or her judgment. Normally, the announcement date is three weeks after the oral hearing.
The losing party may file an appeal with the High Court. If the district court renders a judgment partially favourable to the plaintiff, both parties may appeal against the unfavourable part respectively. The proceedings in the High Court are similar to those in the district court. When rendering a judgment, the High Court may either sustain the district court's judgment (i.e., dismissing the appeal) or revoke the district court's judgment and render its own judgment.
Except for cases where the amount in dispute is less than NT$1.5 million, the losing party in the High Court proceedings may file an appeal with the Supreme Court. The Supreme Court does not look into the facts of the case but only reviews the legality of the High Court's judgment (i.e., whether the High Court's judgment is in contravention of the laws and regulations).4 Both parties may occasionally submit briefs to the Supreme Court. In practice, the Supreme Court only reviews the parties' briefs without holding any hearing. However, recently the Supreme Court is inclined to hold oral hearings.
The Supreme Court may either sustain the High Court's judgment (i.e., dismiss the appeal) or revoke the High Court's judgment and remand the case to the High Court. Receiving the remanded files, the High Court reopens proceedings.
Some types of cases specified by the CCP (e.g., a labour dispute arising from an employment contract with an employment term of less than one year; a dispute over fixing of the boundaries or the demarcation of a real property; a dispute arising from claims in a negotiable instrument) are subject to the summary proceedings.5 Summary proceedings are almost the same as ordinary proceedings but with simplified procedures and documentation and the appeal against the district court's judgment must be filed with the same district court. The appeal against the judgment of the second instance to the Supreme Court is more restrictive than that in ordinary proceedings.
Where the action is for the payment of money, other replaceable objects or securities, and the price or claim value is not more than NT$100,000, such action is subject to the small-claim proceedings. Compared with ordinary proceedings and summary proceedings, small-claim proceedings are much more simplified. The appeal against the district court's judgment must be filed with the same district court and the grounds for appeal are limited to the issue of the contravention of the laws and regulations by the district court's judgment. The judgment of the second instance is not appealable.
The CCP provides three categories of interim measures: provisional attachment (PA), provisional injunction (PI) and injunction maintaining a temporary status quo (TI).
The purpose of PA is to secure the enforcement of a judgment on monetary claims (e.g., claim for a sum of money) or on claims exchangeable for monetary claims (e.g., claim for delivery of a car, which can be changed to a claim for a sum of damages if delivery is unavailable). In other words, PA is to seize the defendant's assets provisionally so that the plaintiff's claims for money as later upheld by a final judgment may be satisfied through the auction of the seized assets.
The purpose of PI is to secure the enforcement of a judgment on non-monetary claims (e.g., claim for delivery of goods or claim for actions to be taken). In other words, PI is to ensure the plaintiff's non-monetary claims remain intact so that such claims as later upheld by a final judgment may be satisfied through the enforcement of the judgment.
Where there is a legal relation in dispute and where it is necessary to prevent material harm or imminent danger, an application for TI may be made. Obtaining a TI, the plaintiff's rights can be temporarily realised and the defendant shall temporarily perform its obligations.
No law governs the time limit for the court to complete a case of litigation, interim measures or appeal. In practice, it takes six to 12 months for the district court to render a judgment, six to 12 months for the High Court and one to two years for the Supreme Court. However, the duration for completion varies, depending on the complexity of a case, and in some cases may take longer.
As for the interim measures, the normal time frame of obtaining the interim measures is three weeks for PA and two months for PI and TI.
iii Class actions
No typical class action is provided in the CCP but it outlines similar actions. Multiple parties, who have common interests, may appoint one or more persons from among themselves to sue or to be sued on behalf of all of the parties.6 Multiple parties who have common interests and are members of the same incorporated charitable association may appoint the association to sue on behalf of them.7 An incorporated charitable association or a foundation may initiate, subject to some requirements, an action for injunctive relief prohibiting specific acts of a person who has infringed the interests of multiple persons.8
In addition to the CCP, other laws provide class actions. Under the Securities Investor and Futures Trader Protection Act, the Consumer Protection Act (CPA) and the Personal Information Protection Act (PIPA), a protection institution may, empowered by 20 or more investors, consumers and individuals who are damaged owing to a single cause, initiate arbitration or an action on their behalf.
iv Representation in proceedings
In all levels of courts, natural persons and legal entities may represent themselves in the proceedings. If the litigant is a legal entity, its legal representative is entitled to represent the entity without further authorisation from the entity. Besides this, unincorporated associations can be a party to the litigation so long as they have a representative or an administrator.9
Unless prohibited by the presiding judge, any person who is not a licensed lawyer may act as an advocate. However, in the following two proceedings, a licensed lawyer is required to be the advocate:
- under the CCP, only a licensed lawyer can file the appeal with the Supreme Court on behalf of the appellant; and
- under the CPA and PIPA, class actions must be filed by a licensed lawyer.
v Service out of the jurisdiction
Article 145 of the CCP provides that (1) where service is to be made in a foreign country, it shall be effectuated by the competent authorities of such country by letters rogatory or the relevant Taiwan ambassador, minister envoy or consul, or other authorised institutes or organisations in that country, and (2) if such service is not available, the service may also be effectuated by registered and receipt-requested mail through the post office. If the place where service shall be made is unknown or the service to be effectuated in accordance with the above Article 145 is likely to prove futile, according to Article 149 of the CCP the court may, on motion, permit service to be effectuated by 'constructive notice'.
The above rules of service are applicable to both a natural person and a legal entity. However, there are alternatives for service on a legal entity outside the jurisdiction. If the manager of a legal entity is in Taiwan and if the action is related to the legal entity's business, service may be effectuated upon the manager.10 If a foreign legal entity has set up an office or a place of business in Taiwan, service may be effectuated upon its representative or administrator who is in Taiwan.11
All of the above rules of service are applicable to both the documents initiating proceedings and the subsequent documents.
vi Enforcement of foreign judgments
Pursuant to Article 4-1 of the Law of Compulsory Enforcement, a party wishing to enforce a foreign judgment must first file a motion for recognition with the court. Article 402 of the CCP provides that a foreign judgment shall be recognised in Taiwan except in any of the following situations:
- where the foreign court lacks jurisdiction pursuant to Taiwanese laws;
- where a default judgment is rendered against the losing defendant who failed to respond to the suit, except in the case where the notice or summons of the initiation of action had been legally served in a reasonable time in the foreign country or had been served through judicial assistance provided under Taiwanese laws;
- where the performance ordered by the judgment or its litigation procedure is contrary to Taiwanese public policy or morals; and
- where there exists no mutual recognition between the foreign country and Taiwan.
For the last requirement, 'mutual recognition', Taiwanese courts take a lenient attitude towards it. In practice, as long as the foreign courts do not explicitly decline to recognise the judgments of Taiwanese courts, the Taiwanese courts would recognise the judgments of such foreign courts. Precedents reveal that the Taiwanese courts have recognised the judgments of the courts in Australia, China, Hong Kong, Japan, Korea, Singapore, South Africa, the United Kingdom, the United States and Vietnam.
vii Assistance to foreign courts
The Law in Supporting Foreign Courts on Consigned Cases (the Supporting Law) governs judicial assistance. Under the Supporting Law, the Taiwanese courts can provide service of documents and examination of evidence to the foreign courts.
A request for service to individuals and entities in Taiwan through Taiwanese courts shall conform to the following requirements:
- the country of the requesting foreign court shall declare reciprocal support to Taiwan in a similar case; and
- the letter rogatory issued by the foreign court shall expressly indicate the name, nationality, domicile, address or office of the party to be served.
Service by Taiwanese courts will be effectuated in accordance with the CCP and the Code of Criminal Procedure, respectively.
For judicial assistance in the examination of evidence for civil or criminal proceedings, the above foreign country's declaration and letter rogatory are needed as well. The letter rogatory shall indicate the names of the involved parties, methods and categories of evidence, the name, nationality, domicile, address or office of the parties to be investigated, and the subjects of investigation.
The service and investigation costs shall be duly handled according to the relevant regulations of Taiwan in civil cases, and shall be counted at actual spending and reimbursed by the country of the requesting foreign court in criminal cases.
viii Access to court files
According to Article 242 of the CCP, only a party to the suit may apply to the court for inspection, copying or photographing of the documents filed in the court's dossier with expenses advanced. A third party, however, may have access to the court's dossier provided that he or she obtains the consent of the parties to the suit or provides a preliminary showing of his or her legal interests and the court grants his or her application for such access.
Article 242 of the CCP also protects privacy and trade secrets: where the documents in the dossier involve the privacy or business secret of the party or a third person and a grant of the application for access to the dossier is likely to result in material harm to the person, the court may deny the application or restrict access.
Although, with very few exceptions, court hearings are open to the public, the progress of court proceedings is not available in the public domain. And, as stated above, the third party has very limited opportunity to have access to the court's dossier. As a result, any third party would have no information about the progress of court proceedings until the judgment is announced. All judgments, apart from a very limited number of cases that are exempted for some reason, will be published on the court's bulletin board and official website.
ix Litigation funding
Basically, the parties bear the litigation costs. The party who initiates an action or relevant proceedings shall first advance the fees as provided under the laws. However, 'legal aid' through the court and a foundation is possible.
Legal aid through the court
Articles 107–115 of the CCP provide for legal aid through the court, which denotes temporary exemption from paying the court costs or any other litigation expenses, providing security bonds and paying attorneys' fees. If a party lacks the financial means to pay the litigation expenses, the court may, on motion, grant legal aid on the condition that there is no manifest likelihood that the party will fail in the action. Legal aid will be granted to a foreign national on the condition that a Taiwanese national may receive the same aid in the foreign national's country in accordance with a treaty, agreement, or the laws or customs of that country.
Legal aid through a foundation
The Legal Aid Act provides legal aid to people who are indigent or are unable to receive proper legal protection. For such purpose, a foundation called the Legal Aid Foundation (the Foundation) was established.
People who are indigent may apply to the Foundation for legal aid. The Legal Aid Act provides the definition of 'indigent people'. Where the application for legal aid is granted, the Foundation may assign a licensed lawyer (the aiding lawyer), paid by the Foundation, to act as a representative, advocate or assistant for the litigation, arbitration, mediation and settlements. The legal aid provided by the Foundation is applicable to foreigners under some conditions.
Where the Foundation has granted legal aid to a person and where the court costs are needed in the court proceedings, the aiding lawyer shall apply for legal aid with the court on behalf of such person and the court shall not dismiss such application unless there is manifestly no prospect of the party prevailing in the action. If the Foundation considers the legal aid recipient's case will probably prevail, and it is necessary to apply to the court for interim measures, the Foundation may submit a letter of guarantee to substitute for the security bonds to be deposited with the court.
IV LEGAL PRACTICE
i Conflicts of interest and Chinese walls
Conflicts of interest
The Attorney Regulation Act governs the attorneys' goals of promoting social justice, protecting human rights and contributing to democratic government and the rule of law. It also provides guidelines for conflicts of interest in that an attorney is prohibited from accepting representation in the following situations:
- instances where a matter had been previously handled by the attorney while he or she was acting as a judge, prosecutor, judicial officer or judicial police; and
- a case that had once been handled by the attorney in the capacity of arbitrator in arbitration proceedings.
As a matter of fact, the issue of conflicts of interest is more a self-governing matter, dealt with by the Bar association. As a result, the Code of Ethics for Lawyers passed by the Taiwan Bar Association provides further restrictions on attorneys' representation. Article 30 of the Code provides that a lawyer may not accept the following matters:
- a matter that has a conflict of interest or a substantial connection with another matter on which he or she has provided consultation in accordance with a trust relationship or a general legal counsel relationship;
- a matter that has a conflict of interest or a substantial connection with another matter that he or she has accepted. This also applies in the case of a matter that has already been concluded by the lawyer and the former client;
- other matters in which the parties are adversaries of the client in a current matter that he or she has accepted;
- other matters that are commissioned by an adversary in a current matter that he or she has accepted;
- where he or she has previously served as a government officer or an arbitrator, he or she may not accept the same matter or a matter having a substantial connection with a matter that he or she had handled by virtue of his or her office;
- a matter that is related to his or her property, business or personal interests, and is likely to have an effect on his or her independent professional judgment;
- the same matter or a matter having a substantial connection with a matter in which the adversary's appointed lawyer is his or her spouse or a blood relative within the second degree or a relative by marriage;
- a matter that is commissioned by several clients having a conflict of interest among themselves;
- other matters that are in conflict with his or her current, existing obligations to other clients, former clients or third persons;
- a litigious matter where he or she concurrently accepts appointment from both parties or from several persons who are a party in the matter but who have a conflict of interest among themselves; or
- a matter in which he or she has served as a witness and now he or she wants to act as an agent or pleader.
The Attorney Regulation Act provides a simple rule regarding Chinese walls: an attorney is prohibited from accepting representation where he or she or another attorney in his or her firm has previously accepted employment from a party which is a respondent party to his or her or their potential client, or else he or she or they had given counsel to or otherwise rendered assistance to said respondent party.
Again, Article 32 of the Code of Ethics for Lawyers provides further restrictions: where an attorney is subject to a conflict of interest restriction in accordance with Article 30, other attorneys who are in the same law firm as him or her shall also be subject to the same restriction.
ii Money laundering, proceeds of crime and funds related to terrorism
Money laundering is governed by the Money Laundering Control Act (MLCA). In addition to the financial institutions such as banks, trusts and investment corporations, insurance companies, securities brokers, futures brokers, etc., which are required by the MLCA to submit the financial transaction, the customer's identity and the transaction records to the Investigation Bureau, the newly amended MLCA also requires attorneys to do so. However, Article 33(2) of the Code of Ethics for Lawyers provides that a lawyer shall strictly keep confidential the matter he or she has accepted to handle for his or her client, except where there is a need to prevent or mitigate serious damage that may be caused to the property of another person by the client's criminal intent, plan or criminal act. Given the above, should a matter be related to money laundering or terrorism, the attorney shall be under no obligation to keep it confidential.
iii Data protection
The PIPA has comprehensive protection of personal data. Generally, the collection, processing and use of personal data are prohibited unless otherwise permitted by this Act. As the attorney can be the 'non-government agency' collecting, processing and using personal data as set forth in this Act, the attorney, when dealing with personal data, is subject to this Act. No specific laws govern the collection, processing and use of personal data for the purpose of court proceedings.
V DOCUMENTS AND THE PROTECTION OF PRIVILEGE
Attorney–client privilege is protected under Taiwanese laws. Article 33 of the Code of Ethics for Lawyers provides that an attorney shall strictly keep confidential the contents of an accepted matter and may not, with very limited exceptions, disclose the same to any third party without having obtained the client's consent. However, Article 307 of the CCP provides that a witness may refuse to testify if (1) the witness is to be examined with regard to a matter which he or she is obliged to keep confidential in the course of performing his or her official duties or conducting business, or (2) the witness cannot testify without divulging his or her technical or professional secrets. Article 348 of the CCP provides that the foregoing Article 307 is applicable to a third party's duty to produce documents. Together with the above provisions of the CCP and the Code of Ethics for Lawyers, an attorney is obligated to keep his or her client's cases confidential and may refuse to provide testimony and produce documents in connection with such cases.
The above attorney–client privilege is applicable to a foreign lawyer.
No rules regarding the attorney–client privilege are provided to an in-house lawyer. And, so far, there has been no precedent in this regard. However, the majority are of the opinion that attorney–client privilege is applicable to an in-house lawyer as well.
ii Production of documents
Documents required to be produced
In addition to a document voluntarily produced by one party, other documents held by such party may be required to be produced. Any party may move the court to order the opposing party to produce a document held by such opposing party. The motion shall specify, among others, the reason why the opposing party has a duty to produce such document. Where the court considers that the disputed fact is material and that the motion is just, it shall order the opposing party to produce such document.12
Notwithstanding the foregoing, a party has the duty to produce the following:13
- documents to which such party has made reference in the course of the litigation proceedings;
- documents which the opposing party may require the delivery or inspection thereof pursuant to the applicable laws;
- documents that are created in the interests of the opposing party;
- commercial accounting books; and
- documents that are created regarding matters relating to the action.
All of the above rules apply to all documents whether they are stored in Taiwan or overseas.
Documents held by a third party
Where a document identified to be introduced as documentary evidence is in a third party's possession, a party may move the court to order such third party to produce the document. The motion shall also specify, among others, the reason why the third party has a duty to produce such document. Where the court considers that the disputed fact is material and that the motion is just, it may order the third party to produce the document.14 With limited exceptions,15 the third party has the duty to produce the document as ordered by the court.
The above rules apply to the third party who is holding the document at issue under the control of a party, who is the subsidiary or parent company of a party, or who is an adviser of a party.
Documents stored electronically
The position of documents stored electronically is not governed by the CCP. Depending on the type of such electronic evidence, the court takes a different attitude towards it. If it is an email, the court is inclined to accept it unless the opposing party objects to the email. If it is a tape, some courts may refuse to accept it. However, if the opposing party listens to the tape and feels comfortable with it, the court may accept it.
Failure to produce documents
Where a party disobeys an order to produce documents without giving a justifiable reason, the court may, in its discretion, take as the truth the opposing party's allegation with regard to such document or the fact to be proved by such document.16 If it is the third party who disobeys the court's order to produce documents without giving a justifiable reason, the court may impose a fine not exceeding NT$30,000; where necessary, the court may also order compulsory measures to be taken.17
VI ALTERNATIVES TO LITIGATION
i Overview of alternatives to litigation
Alternative dispute resolution in Taiwan comes mainly in two forms: arbitration and mediation. Both, if successful, have the same effect as a court's final and binding judgment.
The Arbitration Law governs arbitration. Only if the parties to a dispute come to an agreement on arbitration shall such dispute be submitted to arbitration.
Established under the Arbitration Law, there are five arbitration institutions: the Chinese Arbitration Association, Taipei; the Taiwan Construction Arbitration Association; the Labour Dispute Arbitration Association; the Chinese Construction Industry Arbitration Association; and the Chinese Real Estate Arbitration Association. The Chinese Arbitration Association, Taipei is the most used arbitration association.
Arbitration is becoming more and more common in Taiwan in particular in construction contracts.
Once an arbitral award is rendered, it becomes final, irrevocable and unappealable. However, in the event of limited procedural irregularities it can be set aside by the court.18 Furthermore, an award may be enforceable after an application for enforcement has been granted by the court. Again, only with very limited irregularities shall such an application be dismissed.19
A foreign arbitral award is an arbitral award rendered outside Taiwan or rendered pursuant to foreign laws within Taiwan. A foreign arbitral award, after an application for recognition has been granted by the court, shall be enforceable.
The court shall dismiss the application for recognition of a foreign arbitral award if such award contains one of the following elements:20
- where the recognition or enforcement of the arbitral award is contrary to the public order or good morals of Taiwan;
- where the dispute is not arbitrable under the laws of Taiwan; or
- where the country where the arbitral award is made or whose laws govern the arbitral award does not recognise the arbitral awards of Taiwan.
In addition, if a foreign arbitral award concerns any of the following circumstances, the respondent may request the court to dismiss the application for recognition within 20 days from the date of receipt of the notice of such application:21
- the arbitration agreement is invalid as a result of the incapacity of a party according to the law chosen by the parties to govern the arbitration agreement;
- the arbitration agreement is null and void according to the law chosen to govern said agreement or, in the absence of choice of law, the law of the country where the arbitral award was made;
- a party is not given proper notice of the appointment of an arbitrator or of any other matter required in the arbitral proceedings, or any other situations that give rise to lack of due process;
- the arbitral award is not relevant to the subject matter of the dispute covered by the arbitral agreement or exceeds the scope of the arbitration agreement, unless the offending portion can be severed from and not affect the remainder of the arbitral award;
- the composition of the arbitral tribunal or the arbitration procedure contravenes the arbitration agreement or, in the absence of an arbitration agreement, the law of the place of the arbitration; or
- the arbitral award is not yet binding upon the parties or has been suspended or revoked by a competent court.
Taiwan is not a signatory to the New York Convention and therefore the Convention does not apply to arbitrations in Taiwan.
Mediation is provided in the CCP to be held by the court and in other laws to be held by other institutions.
Mediation in the court
Under the CCP, mediation may be compulsory or optional.
- disputes arising from a relationship of adjacency between real property owners or superficiaries, or other persons using the real property;
- disputes arising from the determination of boundaries or demarcation of real property;
- disputes among co-owners of real property arising from the management, disposition or partition of a real property held in undivided condition;
- disputes arising from the management of a building or of a common part thereof among the owners of the shared, divided title or persons using the building;
- disputes arising from an increment or reduction or exemption of the rental of real property;
- disputes arising from the determination of the term, scope and rental of a superficies;
- disputes arising from a traffic accident or medical treatment;
- disputes arising from an employment contract between an employer and an employee;
- disputes arising from a partnership between the partners, or between the undisclosed partners and the nominal business operator;
- disputes arising from proprietary rights between spouses, lineal relatives by blood, collateral relatives by blood within the fourth degree of relationship, collateral relatives by marriage within the third degree of relationship, or head of the house or members of the house; and
- other disputes arising from proprietary rights where the price or value of the object in dispute is less than NT$500,000.
Nevertheless, in practice a regular lawsuit may be filed with the court although the matter at issue is one of the above compulsory mediation matters. Receiving the complaint, the court would conduct the mediation proceedings first. Should the mediation fail, the regular litigation proceedings will commence.
If the matter at issue is not subject to the compulsory mediation, any party may also apply for mediation before initiating the relevant action.
The court would seek mediation at any time irrespective of the phase of the proceedings and irrespective of compulsory or optional mediation.
The settlement in the mediation is at will. A successful mediation is reached upon the agreement of the parties. A successful mediation shall take the same effect as a settlement in litigation, meaning that a mediation transcript made based on the parties' settlement agreement may be enforceable. When an action has been filed and the mediation succeeds during the litigation proceedings, the plaintiff may move for the return of two-thirds of the court costs already paid when the action was filed.
Mediation outside the court
Some other laws provide for mediation:
- the Family Act, for family matters;
- the Township and County-Administered City Mediation Act, for general civil disputes. This is the most commonly used mediation because townships and county-administered cities all over Taiwan establish their own mediation committees, which are convenient for people for settling disputes, and such mediation covers all civil cases and the type of criminal cases instituted only upon complaint;
- the Regulations for Consumer Dispute Mediation, for consumer disputes;
- the Act for Settlement of Labour Management Disputes and the Regulations for the Mediation of Labour Management Disputes, for labour disputes;
- the Regulations for Mediation on Disputes of Contract Performance of Government Procurement, for government procurement;
- the Regulations of Copyright Dispute Mediation, for copyright disputes;
- the 37.5% Arable Rent Reduction Act, for disputes involving farm land leasing; and
- the Public Nuisance Dispute Mediation Act, for public nuisance disputes.
iv Other forms of alternative dispute resolution
Besides arbitration and mediation, there are no other formal alternative dispute resolution procedures. The parties may resolve the dispute by voluntary agreement. Such settlement agreement is not enforceable unless a party files a regular lawsuit with the court and obtains a final and irrevocable judgment based on such settlement agreement. However, if the parties have reached a settlement agreement, the dispute would have been settled and the court would not look into the original dispute but plainly make a decision on the settlement agreement itself.
No expert determination is available in Taiwan.
VII OUTLOOK and CONCLUSIONS
To facilitate litigation proceedings regarding business disputes, in July 2019, the Judicial Yuan proposed the draft of the Business Case Adjudication Act (BCAA) as well as an amendment to the Intellectual Property Court Organisation Act, under which a Business Tribunal will be established in the existing IP Court. Thus, the IP Court will be turned into the IP & Business Court. The Business Tribunal, constituted by professional and well-trained judges, will have exclusive jurisdiction for business cases. Mandatory legal representation by attorneys has been introduced into the BCAA: parties shall engage attorneys to represent them to conduct the litigation procedure. However, mediation shall be carried out before commencement of a trial. The mediation shall be held by a judge or an expert with professional knowledge. The parties may engage expert witnesses to provide their professional opinion, and may also raise inquiries against the professional opinion provided by the other party. We expect that the two draft Acts may be passed in the near future.
1 Simon Hsiao is a partner at Wu & Partners, Attorneys-at-Law.
2 Article 427 of the CCP.
3 Article 436-8 of the CCP.
4 Article 467 of the CCP.
5 Article 427 of the CCP.
6 Article 41 of the CCP.
7 Article 44-1 of the CCP.
8 Article 44-3 of the CCP.
9 Article 40 of the CCP.
10 Article 131 of the CCP.
11 Article 128 of the CCP.
12 Articles 342 and 343 of the CCP.
13 Article 344 of the CCP.
14 Articles 346, 347 and 343 of the CCP.
15 Articles 306–310, 344I(2)–(5) and 344II of the CCP.
16 Articles 345 of the CCP.
17 Articles 349 of the CCP.
18 Article 40 of the Arbitration Law.
19 Articles 37 and 38 of the Arbitration Law.
20 Article 49 of the Arbitration Law.
21 Article 50 of the Arbitration Law.
22 Article 406 of the CCP.
23 Article 403 of the CCP.