Due to its unique geopolitical situation, Taiwan is not a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). Nevertheless, Taiwan has developed an arbitration-friendly legal framework.
Arbitration in Taiwan is governed by the Arbitration Law of the ROC promulgated on 24 June 1998 and effective as of 24 December 1998 (the “Arbitration Act”), replacing the former Arbitration Act of 1986. The Act was subsequently amended in 2002, 2009, and 2015, modifying Articles 7, 8, 47, 54, and 56 of the Arbitration Act.
The Arbitration Act of Taiwan reflects the principles of the UNCITRAL Model Law on International Commercial Arbitration adopted on 21 June 1985 (the “Model Law”) with some variations. The Arbitration Act can be divided into the following categories:
- formalistic aspects and the effect of arbitration agreements;
- constitution of the arbitral tribunal;
- powers of arbitral tribunals; and
- enforcement of arbitral awards.
Each category will be explored in this note.
Arbitration Agreements in Taiwan
Article 1 of the Arbitration Act provides that an arbitration agreement must be in writing. In line with the requirements of the Model Law, the provision includes other written documents such as facsimile, correspondence, or any other type of communication as prima facie evidence of an arbitration agreement. Consequently, the Act does not authorize oral agreements.
Article 3 of the Arbitration Act treats arbitration agreements as separable from their underlying contracts:
The validity of an arbitration clause which forms part of a principal contract between the parties may be determined separately from the rest of the principal contract. A decision that the contract is nullified, invalid, revoked, rescinded or terminated shall not affect the validity of the arbitration clause.
The principle of separability, or autonomy of the arbitration clause, is a cornerstone of international arbitration that has been embraced and accepted in numerous jurisdictions, including Taiwan. The principle recognizes that an arbitration clause is a separate and autonomous agreement with contractual requirements, and independent from the main contract. Thus, a decision that invalidates, rescinds or terminates the contract shall not affect the arbitration clause’s validity.
Constitution of an Arbitral Tribunal in Taiwan
Members of the Arbitral Tribunal
The Taiwanese Arbitration Act contains several provisions dealing with the qualifications of the members of the arbitral tribunal seated in Taiwan. For instance, arbitrators must be independent and impartial and maintain a reputation for integrity. Some requirements, however, are stricter, requiring the arbitrator to possess one of the following qualifications:
- service as a judge or public prosecutor;
- practising for more than five years as a lawyer, accountant, architect, mechanic or in any other commerce-related profession;
- acting as an arbitrator of a domestic or foreign arbitration institution;
- teaching as an assistant professor or higher post in a domestic or foreign college certified or recognized by the Ministry of Education; and
- specializing in a particular field or profession and has practised for over five years.
Article 8 specifies that arbitrators must receive training and obtain a certificate before applying to be registered in an arbitral institution, except those who have:
- served as a judge or prosecutor;
- practised as a lawyer for more than three years;
- taught with the department of law or graduate school of law of a domestic or foreign university or college accredited by the Ministry of Education as a professor for two years, or as an associate professor for three years while teaching the major legal courses for more than three years; or
- been registered as an arbitrator at any arbitration institution and acted as an arbitrator in a dispute.
Appointment of Arbitrators in Taiwan
The Arbitration Act reflects the Model Law’s principle that the parties are free to choose the number of arbitrators and the procedure for their appointment. Without such an agreement, the dispute will be settled by a three-member arbitral tribunal. In this case, each party shall nominate one co-arbitrator. The co-arbitrators shall then appoint the presiding arbitrator.
On the other hand, if the co-arbitrators do not agree on a name for the chairman of the arbitral tribunal within 30 days of the appointment, any party can apply before the court for the final appointment.
If the parties have agreed to submit their dispute to an arbitral institution, the chairman or the sole arbitrator shall be appointed by the arbitral institution in case of disagreement and not by the court.
Challenging Arbitrators in Taiwan
Under the Arbitration Act, arbitrators may be challenged if they do not fulfil the qualifications agreed upon by the parties. In addition, the arbitrator may be challenged if any of the following events arise:
- any causes stipulated in Article 32 of the Code of Civil Procedure for disqualifying a judge;
- the existence of employment or agency links between the arbitrator and a party;
- the existence of an employment or agency relationship between the arbitrator and an agent of a party or between the arbitrator and a key witness;
- the existence of any other circumstances which raise any justifiable doubts as to the impartiality or independence of the arbitrator.
The Arbitration Act provides that any of the circumstances above must be immediately disclosed in detail to the parties.
A party shall apply for the disqualification of an arbitrator within 14 days from the date on which the cause for the challenge became known. Once the tribunal is constituted, it shall make a ruling within ten days. A challenge to the arbitral tribunal’s decision on the disqualification shall be filed within 14 days before the competent Taiwanese court.
Arbitration Proceedings in Taiwan
Many principles related to the conduct of arbitral proceedings were incorporated into the Arbitration Act in accordance with the provisions enshrined in the Model Law, such as the principle of the parties’ autonomy in choosing the rule governing the proceedings, the place and the language of the arbitration.
For an arbitration seated in Taiwan, the arbitral tribunal has the power to make a ruling on its own jurisdiction concerning any objections concerning its competence, the validity of the arbitration clause, or any procedural irregularities.
The Arbitration Act also provides that each party must be allowed to present its case or defence, and the arbitral proceeding shall be confidential unless otherwise agreed by the parties.
Whereas most of these provisions align with the Model Law, others are more regional. Some Articles still refer to the Taiwanese Civil Code and the Code of Civil Procedure. For example, Article 19 stipulates that in the absence of agreement and where the Arbitration Act is silent, the arbitral tribunal may adopt “the Code of Civil Procedure mutatis mutandis or other rules of procedure which it deems proper.”
Another provision concerns the time limit to render an award. Under Article 21, the arbitral tribunal shall render the final award within six months of the commencement of the arbitration, which may be extended for an additional three months “if the circumstances so require.” Article 21 also provides that, in the absence of an agreement between the parties, the arbitral tribunal shall determine the date of the hearing within ten days following its appointment.
Arbitral Awards in Taiwan
Challenging Arbitration Awards in Taiwan
Unlike the Model Law, Article 40 of the Arbitration Act enumerates a comprehensive list of grounds to set aside an arbitral award in Taiwan. The party seeking the annulment of an arbitral award must show:
- the existence of any circumstances stated in Article 38 (a dispute not contemplated by the terms of the arbitration agreement, a failure to state reasons, directing an illegal act);
- that the arbitration agreement was nullified, invalid or has yet to come into effect or has become invalid prior to the conclusion of the arbitral proceedings;
- that the arbitral tribunal failed to allow any party to present its case before the conclusion of the arbitral proceedings, or if any party was not lawfully represented in the arbitral proceedings;
- that the composition of the arbitral tribunal or the arbitral proceedings was contrary to the arbitration agreement or the law;
- that an arbitrator failed to fulfil the duty of disclosure and appeared to be partial or has been requested to withdraw but continued to participate, provided that the court has not dismissed the withdrawal request;
- that an arbitrator violated any duty resulting in criminal liability;
- that a party or any representative has committed a criminal offence concerning the arbitration;
- if any evidence or content of any translation upon which the arbitration award relies has been forged or fraudulently altered or contains any other misrepresentations; or
- if a judgment of a criminal or civil matter or an administrative ruling upon which the arbitration award relies has been reversed or materially altered by a subsequent judgment or administrative ruling.
It has been opined that circumstances where the tribunal has wrongly declared itself competent or where the arbitral award is contrary to public policy are not grounds to set aside an arbitration award in Taiwan.
The application to set aside an award must be filed at the district court of the seat of the arbitration within 30 days of the date the award was issued or from the date the party became aware of the irregularity.
Recognition and Enforcement of Foreign Awards in Taiwan
According to Article 47 of the Arbitration Act, a foreign award is an arbitral award issued outside the territory of China “or issued pursuant to foreign laws within the territory of the Republic of China.”
Taiwan has not acceded to the New York Convention, primarily due to its unique geopolitical situation. Nevertheless, the Arbitration Act contains a number of provisions that incorporate the same conditions as the New York Convention to enforce and recognize an arbitration award. Therefore, a party seeking the enforcement or recognition of a foreign award in Taiwan must present:
- the original arbitral award or an authenticated copy thereof;
- the original arbitration agreement or an authenticated copy thereof; and
- the full text of the foreign arbitration law and regulation, the rules of the foreign arbitration institution or the rules of the international arbitration institution which applied to the foreign arbitral award.
Article 48 also adds that “[i]f the documents in the preceding paragraph are made in a foreign language, a copy of the Chinese translation of the same shall be submitted.”
On the other hand, Taiwanese courts will deny the recognition and enforcement of an arbitral award in Taiwan if:
- the recognition and enforcement of the arbitral award is contrary to the public order or good morals of the ROC; or
- the dispute is not arbitrable under the laws of the ROC.
Although Taiwan is not a signatory party to the New York Convention, Taiwanese courts have rejected arguments of parties resisting the enforcement of arbitral awards:
- In one case, the High Court of Taiwan accepted that foreign awards have the same legal effect as domestic awards. The High Court, in particular, noted that the Act aims at creating a favourable legal framework for arbitral awards.
- In another case, the Hsinchu District Court rejected the argument that an award rendered in Finland could not be enforced in Taiwan. According to the respondent party, as Taiwan is not a party to the New York Convention, Finland would not recognize Taiwanese awards. The District Court held that while contracting states may make reciprocity reservations, Finland has not done so, and nothing suggested that Finland would systematically refuse to recognize awards issued in Taiwan.
- Finally, the Tainan District Court refused the recognition and enforcement of an arbitral award in which it was proved that the respondent was not given proper notice of the arbitration proceedings.
In conclusion, the landscape of arbitration in Taiwan is well-structured and closely aligned with international standards, thanks to the Arbitration Act, which takes its cue from the UNCITRAL Model Law. While the Arbitration Act reflects global best practices in many ways, it also includes several unique features that cater to local needs and circumstances. However, the absence of Taiwan’s accession to the New York Convention creates a hurdle in the international enforcement of arbitration awards. Despite this, the Arbitration Act does encompass similar provisions to the New York Convention, and Taiwanese courts have upheld the principle of enforcing foreign awards, fostering an arbitration-friendly environment. Moving forward, the evolution of arbitration in Taiwan will surely continue to be shaped by its engagement with global arbitration practices and its response to its unique domestic circumstances.
 C. Li, The New Arbitration Law of Taiwan – Up to an International Level?, 16(3) J. of Intl. Arb. p. 128.
 N.T and J. Chang, Taiwan in K. Kim and J. Bang (eds.) Post-Award Interest in the Asia-Pacific (2023), fn. 3.
 Arbitration Law of ROC, Article 1.
 Ibid, see also 1985 Model Law, Article 7(2).
 Arbitration Law of ROC, Article 3; see also 1985 Model Law, Article 16 (1).
 R. Feehily, Separability in international commercial arbitration; confluence, conflict and the appropriate limitations in the development and application of the doctrine, 34(3) Arb. Intl., p. 356.
 Arbitration Law of ROC, Article 6.
 Arbitration Law of ROC, Article 8.
 Arbitration Law of ROC, Article 9; see also Articles 11(2) and 11(3).
 Arbitration Law of ROC, Article 9.
 Arbitration Law of ROC, Article 9.
 C. Li, supra fn. 1, p. 130.
 Arbitration Law of ROC, Article 16.
 Arbitration Law of ROC, Articles 16 and 15.
 Arbitration Law of ROC, Article 15.
 Arbitration Law of ROC, Article 17.
 Arbitration Law of ROC, Article 17.
 C. Li, supra fn. 1, p. 132.
 Ibid; see also Arbitration Law of ROC, Article 22.
 Id., p. 133; Arbitration Law of ROC, Articles 23 and 15.
 Arbitration Law of ROC, Article 19.
 Arbitration Law of ROC, Article 21.
 Arbitration Law of ROC, Article 21.
 Article 38 provides that the court shall reject an application for enforcement where: “1.The arbitral award concerns a dispute not contemplated by the terms of the arbitration agreement, or exceeds the scope of the arbitration agreement, unless the offending portion of the award may be severed and the severance will not affect the remainder of the award; 2.The reasons for the arbitral award were not stated, as required, unless the omission was corrected by the arbitral tribunal; 3.The arbitral award directs a party to act contrary to the law.”
 See C. Li, supra fn. 1, pp. 133-134.
 Arbitration Law of ROC, Article 41.
 Arbitration Law of ROC, Article 47.
 Arbitration Law of ROC, Article 48.
 Arbitration Law of ROC, Article 48.
 Arbitration Law of ROC, Article 49.
 New York Arbitration Convention, Taiwan Decisions, https://www.newyorkconvention.org/news/taiwan+decisions 10 May 2022 (accessed on 16 May 2023).