TAIWAN Law and Practice Contributed by: Derrick Yang, Judy Lo and Yu-Ting Su, Lee and Li Attorneys-at-Law
Conversely, interim relief is less common in disputes involving administrative decisions. Generally, neither the initiation of administrative litigation nor the filing of an administrative appeal suspends the enforcement of the disputed administrative decision. The court may only stay enforcement if it determines that doing so is necessary to prevent irreparable harm and that an urgent situation exists. 9.5 Interaction With Damages and Other Civil Actions In Taiwan, litigation challenging merger control, DIR or other regulatory decisions are relatively uncommon. Consequently, follow-on damages actions or other civil claims are even more infrequent. In principle, in civil proceedings, if a fact has already been established by a court, then unless the court’s judgment is clearly unlawful or the parties present new evidence in a subsequent lawsuit sufficient to overturn the original decision, neither party may make contrary assertions in another lawsuit involving the same par - ties and the same key issue, nor may the court issue a contradictory judgment. 10. Private Enforcement and Competition/Regulatory Claims 10.1 Follow-On and Standalone Actions Generally speaking, follow-on or standalone damages actions arising from M&A transactions are infrequently pursued in Taiwan. On the rare occasions when such actions do occur, they typically involve insider trading or breach of fiduciary duty claims related to public companies. This is largely due to the nature of merger transactions, which often involve insider information, numerous internal and external participants from both sides, extensive business decisions and planning, and prolonged negotiation and operational timelines. Collectively, these factors increase the risk of failures, flaws or breaches in the exercise of fiduciary duties and insider trading during the merger process. 10.2 Collective and Class Actions To strengthen investor protection, Taiwan’s Securities Investor and Futures Trader Protection Act provides for an opt-in class action mechanism. When securi -
ties-related incidents stemming from the same cause harm multiple securities or futures investors, if 20 or more investors authorise the Securities and Futures Investors Protection Center to act on their behalf, the Center may initiate class action lawsuits or submit the matter to arbitration in its own name. In practice, these claims typically involve false financial reports or prospectuses, stock price manipulation and insider trading. 10.3 Limitation Periods, Causation and Quantification In Taiwan, private enforcement following regulatory decisions or M&A-related misconduct is uncommon in the form of court litigation, as most disputes are resolved through settlements, arbitration or other contractually agreed dispute resolution mechanisms, which remain confidential in nature. Consequently, publicly available judicial precedents addressing limitation periods, causation and the quantification of damages are limited. That said, as a general rule, unless otherwise agreed upon by the parties, limitation periods are typically governed by ordinary civil law prescription rules. Prac - tical challenges often arise in determining when the claimant is deemed to have knowledge of the damage and the liable party. Establishing causation can also be difficult, as claimants must prove a direct causal link between the alleged misconduct and the losses suffered, despite the influence of multiple market or transaction-specific factors. As to damages, clear and credible evidence is usually required, though in insider trading claims (which are relatively more com - mon among the few publicly available M&A-related litigation cases), statutory damage calculation mecha - nisms apply, thereby easing the investors’ burden of proof. This is why representations and warranties insurance and other forms of coverage are increasingly being adopted as essential risk mitigation tools in M&A transactions. 10.4 Settlements, ADR and Arbitration As competition or regulatory disputes arising from M&A cases are rarely seen in Taiwan, there is limited information on whether and how settlements, media-
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