TAIWAN Law and Practice Contributed by: Daniel T H Tsai, Lee and Li
Where the insured is considered liable to indemnify a third party for loss, Article 94 (2) of the Insurance Act provides that the third party may claim for payment of indemnification – within the scope of the insured amount and based on the ratio to which the third party is entitled – directly from the insurer. That is to say, under the circumstances, if the insured is liable for a third party’s damages, such third party may demand the insurer provide indemnification for the damage it has suffered. However, it is worth noting that the scope of such indemnification is restricted to the sum that the insurer has agreed to undertake under the liability insurance. 9.2 Insurance Disputes Over Jurisdiction and Choice of Law Although Taiwan cannot be a member of many inter- national conventions, owing to international political factors, its laws follow the main concepts and spirit of these international conventions. If a civil case in Taiwan involves a foreigner or a foreign country, the jurisdiction and choice of law are addressed by the Act Governing the Choice of Law in Civil Matters Involving Foreign Elements. Generally speaking, in a civil matter involving foreign elements, the court in the domicile of the proposer (ie, the insurance policy buyer) or the insured has juris- diction over the insurance disputes concerned. The parties may further stipulate the jurisdiction, as long as the stipulation will not be unfair to the insured. As regards the choice of law, in general, the applicable law regarding the formation and effect of a juridical act that results in a relationship of obligation is deter- mined by the intention of the parties. However, where the parties have no express intention or their express intention is void under the applicable law determined by them, the formation and effect of the juridical act are governed by the law that is most closely connect- ed with the juridical act. In principle, the parties to the insurance contract may stipulate the governing law – provided that the stipu- lation will not be unfair to the insured ‒ and, if there is no valid mutual agreement on the governing law, the law that is most closely connected with the insur- ance contract shall govern. Additionally, pursuant to
Article 29 of the Act Governing the Choice of Law in Civil Matters Involving Foreign Elements, an injured person’s direct claim against the insurer of the person liable for the tort is governed by the law applicable to the insurance contract. However, if it favours them, the injured person also may assert that the law applicable to the tort’s obligation shall be the governing law. 9.3 Litigation Process In Taiwan, there are three instances in the court sys- tem: district courts, the High Court, and the Supreme Court. In principle, the district courts are the courts of first instance. The losing party in the first instance may pay the court of appeal fee and appeal to the court of second instance if it finds the judgment unfavourable. As per the district courts, the High Court in the sec- ond instance will review and investigate the facts as well as the legal issues. The High Court in the sec- ond instance will also allow the parties to submit new evidence and present new arguments, apart from in exceptional circumstances. However, in the second instance, the losing party in the High Court may only appeal to the court of third instance (ie, the Supreme Court) on the grounds of a matter of law rather than a matter of fact. Furthermore, only cases with a claim amount exceeding TWD1.5 million (approximately USD50,000) can be appealed to the Supreme Court. 9.4 Enforcement of Judgments Compulsory enforcement can be carried out by courts in Taiwan on the grounds of an irrevocable final judg- ment. According to Article 402 of the Code of Civil Proce- dure, a judgment rendered by a foreign court must be recognised, apart from in the following circumstances: • where the foreign court lacks jurisdiction pursuant to ROC laws in Taiwan; • where a default judgment is rendered against the losing defendant (except in cases where the notice or summons of the initiation of action was legally served in a reasonable time in the foreign coun-
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