Arbitration Law in Taiwan
Arbitration Law in Taiwan is governed by the Arbitration Act (1998), which provides a framework for both domestic and international arbitration. Taiwan’s arbitration law is primarily based on principles of party autonomy, fairness, and efficiency and aligns closely with international standards such as the UNCITRAL Model Law.
Key Features of Arbitration Law in Taiwan:
1. Legal Framework
- Arbitration Act (1998): The core law governing arbitration in Taiwan is the Arbitration Act (No. 87), which was adopted in 1998 and has been amended to align with international arbitration standards.
- UNCITRAL Model Law: Taiwan’s arbitration law follows the UNCITRAL Model Law on International Commercial Arbitration, ensuring that it meets internationally recognized standards for resolving cross-border disputes.
- Taipei Arbitration Center (TAC): The Taipei Arbitration Center is a key institution for administering arbitration proceedings in Taiwan. It provides arbitration services for both domestic and international disputes.
2. Arbitration Agreement
- Written Agreement: An arbitration agreement must be in writing. It can either be a separate agreement or part of a contract clause.
- Enforceability: Arbitration agreements are enforceable in Taiwan, and if a party seeks judicial intervention in an arbitration dispute, the court will typically refer the matter to arbitration, provided there is a valid arbitration agreement.
- Scope: The scope of the arbitration agreement must be clear, as it governs the disputes that will be arbitrated. Any disputes falling outside the scope of the agreement cannot be arbitrated.
3. Arbitral Tribunal
- Number of Arbitrators: The parties are free to decide the number of arbitrators, though typically, one or three arbitrators are chosen for arbitration proceedings.
- Appointment of Arbitrators: The parties are allowed to choose the arbitrators. If they fail to agree, the court may intervene and appoint the arbitrators. In addition, the Taipei Arbitration Center can assist with the selection of arbitrators.
- Impartiality and Independence: Arbitrators must be impartial and independent. They are subject to disqualification for reasons of bias or conflict of interest.
- Qualifications: There are no mandatory qualifications for arbitrators under Taiwanese law. However, arbitrators often have significant expertise in the area of law or industry related to the dispute.
4. Arbitration Procedure
- Party Autonomy: Taiwan’s arbitration law places great emphasis on party autonomy. The parties are free to agree on the procedural rules and details of the arbitration process, such as the place of arbitration, the language of arbitration, and the governing law.
- Institutional and Ad Hoc Arbitration: Both institutional and ad hoc arbitration are permissible. The Taipei Arbitration Center is a prominent institution providing institutional arbitration services. For ad hoc arbitration, the parties are free to agree on procedural rules, but the UNCITRAL Arbitration Rules are commonly used.
- Language of Arbitration: The parties are free to choose the language of the arbitration. In practice, Mandarin Chinese is often used, but English is also common in international arbitrations.
- Interim Measures: Taiwanese courts have the authority to issue interim measures in support of arbitration, including orders for asset preservation or injunctive relief. This is in line with the UNCITRAL Model Law, which allows tribunals to grant interim relief and seek court assistance for enforcement.
- Confidentiality: The proceedings are generally treated as confidential unless the parties agree otherwise. However, the final award is typically not confidential, especially if it is subject to enforcement.
5. Arbitral Awards
- Final and Binding: An arbitral award in Taiwan is final and binding. The parties must comply with the award once issued, and failure to do so can result in enforcement actions through the courts.
- Types of Remedies: The arbitral tribunal has the authority to grant a variety of remedies, including monetary damages, specific performance, and injunctive relief, depending on the nature of the dispute.
- Written Award: The arbitral tribunal must issue a written award explaining the reasoning for its decision. This ensures transparency and accountability in the arbitration process.
- Time Limits: The arbitral tribunal is required to issue its award within six months after the closure of the proceedings, though this deadline can be extended if both parties agree or for other justified reasons.
6. Recognition and Enforcement of Arbitral Awards
- Domestic Awards: Domestic arbitral awards are enforceable in Taiwan. If a party refuses to comply with an award, the other party can seek enforcement in the Taiwanese courts.
- Foreign Awards: Taiwan is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), which allows the recognition and enforcement of foreign arbitral awards in Taiwan. However, enforcement may be refused on limited grounds, such as if the award violates Taiwan’s public policy (ordre public) or if the dispute is not arbitrable under Taiwanese law.
- Grounds for Refusal: The grounds for refusing the enforcement of foreign arbitral awards in Taiwan include:
- The award is contrary to public policy.
- The arbitral tribunal was not properly constituted.
- The parties were not given proper notice of the appointment of the arbitrator or the arbitration proceedings.
- The dispute is not capable of being settled by arbitration under Taiwanese law.
7. Judicial Review and Setting Aside of Awards
- Limited Judicial Review: In Taiwan, judicial review of arbitral awards is limited. A party can challenge an award only on specific grounds, such as:
- Excess of Jurisdiction: If the tribunal exceeds its authority.
- Procedural Irregularities: If there is a violation of due process or a failure to provide the parties a fair opportunity to present their case.
- Violation of Public Policy: If the award is against Taiwan’s public policy.
- Time Limit for Challenge: A party wishing to challenge an award must do so within 30 days after being notified of the award. If this period expires, the award is considered final.
8. Role of Courts in Arbitration
- Supportive Role: Taiwanese courts play a supportive role in arbitration. They assist in the enforcement of interim measures, appointment of arbitrators, and the recognition and enforcement of awards.
- Stay of Court Proceedings: Courts in Taiwan will typically stay legal proceedings in favor of arbitration if there is a valid arbitration agreement. This ensures that the parties respect their agreement to resolve disputes through arbitration rather than litigation.
- Interim Relief: Taiwanese courts are also empowered to assist arbitrations by granting interim relief, such as freezing assets or ordering other protective measures.
- Enforcement: Once an award is rendered, the winning party can apply to Taiwanese courts for enforcement of the award, either for domestic or foreign awards.
9. Arbitration Institutions in Taiwan
- Taipei Arbitration Center (TAC): The Taipei Arbitration Center is the primary institution for institutional arbitration in Taiwan. The TAC offers comprehensive arbitration services for both domestic and international disputes.
- China International Economic and Trade Arbitration Commission (CIETAC): Taiwan also recognizes the CIETAC as a reputable arbitration institution, especially for disputes involving China or other cross-border issues.
- Taiwan International Arbitration Association (TIA): The TIA also provides arbitration services and promotes the development of arbitration in Taiwan.
10. Recent Developments and Outlook
- Promotion of Arbitration: Taiwan has been actively promoting itself as a hub for arbitration in the Asia-Pacific region. It has established various arbitration centers and is continually working to improve its arbitration law to meet international standards.
- International Arbitration: Taiwan is increasingly becoming a more attractive jurisdiction for international arbitration, particularly in the areas of intellectual property, trade disputes, and commercial matters.
- Regional Cooperation: Taiwan has sought to enhance its cooperation with other jurisdictions in Asia, especially with Hong Kong, Singapore, and mainland China, in the field of international arbitration.
Conclusion
Arbitration in Taiwan is governed by a modern, flexible legal framework that aligns with international standards, including the UNCITRAL Model Law. Taiwan’s Arbitration Act provides a clear, efficient process for both domestic and international arbitration, with strong emphasis on party autonomy and fairness. The presence of established institutions like the Taipei Arbitration Center and a robust judicial system that supports arbitration procedures makes Taiwan an attractive forum for resolving commercial disputes.
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