TAIWAN Law and Practice Contributed by: Yafen Lin, Peng-Kwang Chen, I-Ming Chen and Weiyu Chiang, Formosa Transnational Attorneys at Law
The Taiwanese court will refuse to recognise a for - eign arbitral award if such arbitral award is contrary to public order or good morals (public policy) in Taiwan. Although Taiwan is not a contracting party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Con - vention”), this public order requirement is to some extent comparable to the public-policy exception under the New York Convention (Article V 2 (b) of the New York Convention). Arbitrability The Taiwanese court will refuse to recognise a foreign arbitral award if such award concerns a dispute that cannot be resolved by arbitration under the laws of Taiwan (ie, lack of arbitrability). Reciprocity A Taiwanese court will refuse to recognise a foreign arbitral award if the country in which the award was made, or whose laws govern the award, does not rec - ognise Taiwanese arbitral awards. The de facto application of the New York Convention Owing to its contested political status, Taiwan is cur - rently not a contracting party to the New York Con - vention. Nevertheless, the Taiwan Arbitration Law has adopted some of the principles underpinning the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”) adopted by the United Nations Commission on International Trade Law. Although Taiwan is not a signatory to the New York Convention, that fact does not necessarily affect reciprocity in the enforcement of arbitral awards. Tai - wanese courts in fact tend to adopt a relatively liberal approach to the reciprocity requirement in applica - tions for recognition of foreign arbitral awards. A 2005 Taiwanese High Court decision states that the reci - procity requirement under the Taiwan Arbitration Law does not mean that a Taiwanese court may recognise a foreign arbitral award only if the foreign seat recog - nises Taiwanese arbitral awards. Rather, the provision authorises the court to deny recognition in its discre - tion after considering reciprocity-related factors.
Taiwan has also sought to align its arbitral laws and practices with important international instruments such as the New York Convention. For example, the Taiwan-Vietnam Mutual Legal Assistance Agreement provides that “one party shall recognise and enforce arbitral awards rendered in the territory of the other party in accordance with the Convention on the Rec - ognition and Enforcement of Foreign Arbitral Awards concluded in New York on 10 June 1958 and the arbi - tration laws of the two parties.” Accordingly, although Taiwan is not a contracting party to the New York Convention, the Convention may generally be said to be applied de facto in recognition and enforcement practice in Taiwan. 4.2 Variations in Approach to Enforcement of Arbitral Awards There is no variation in approach to enforcement of arbitral awards in Taiwan. 4.3 Categories of Arbitral Awards Not Enforced Domestic Arbitral Awards Pursuant to Article 38 of the Taiwan Arbitration Law, the enforcement of domestic arbitral awards shall be refused if the court finds that one of the following cir - cumstances applies: • the arbitral award involves a dispute irrelevant to the subject matter of the arbitration agreement, or falls beyond the scope of the arbitration agreement (ie, matters outside the submission to arbitration), unless the offending portion can be severed from and not affect the remainder of the arbitral award; • the arbitral award does not set forth the reasoning for the award where the reasoning is required by law, unless such omission is supplemented/cor - rected by the arbitral tribunal; or • the arbitral award orders a party to act contrary to Taiwanese law. Arbitral Awards From China As described in 4.1 Legal Issues Concerning Enforce- ment of Arbitral Awards , the court shall dismiss a petition for confirmation/recognition of an arbitral award from China if such award is contrary to public order and good morals in Taiwan or there is a lack of reciprocity.
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