What is arbitration?
Arbitration is a consensual dispute resolution process where the parties agree to submit their disputes to be resolved by an arbitral tribunal, which renders a final and binding award.
What are the advantages of arbitration?
Pursuant to Article 37 of the Arbitration Act , an arbitral award is binding on the parties, cannot be appealed, and has the same force as a final court judgment.
An arbitral award shall be made within six months of the commencement of the arbitration. The time limit may be extended by three additional months if the arbitral tribunal deems it necessary.
In arbitration, the parties can choose their arbitrators, allowing persons with appropriate knowledge, expertise or experience in specialized fields to serve as arbitrators.
Arbitration proceedings are confidential and private. Pursuant to Section 2, Article 23 of the Arbitration Law, arbitral proceedings cannot be made public unless the parties have agreed otherwise.
The cost of arbitration is moderate compared with court filing fees. Arbitration proceedings are also generally more expeditious than court proceedings.
What is “institutional” arbitration and what is “ad hoc” arbitration?
Institutional arbitration proceedings are administered by an arbitral institution, usually conducted under the institution's arbitration rules. The CAA is the largest provider of institutional arbitration in Taiwan . On the other hand, “ad hoc” arbitration proceedings are arranged by and between the arbitrators and the parties. In international arbitration, ad hoc proceedings usually adopt the UNCITRAL Model Rules.
What legislation governs arbitration in Taiwan? What is the basis of the arbitration legislation and does it distinguish between international and domestic arbitrations?
The Arbitration Act of the Republic of China governs arbitration in Taiwan . The Act is based on the UNCITRAL Model Law of 1985. The Act applies to both domestic and international arbitrations and does not distinguish between the two.
How much will it cost to arbitrate at the CAA?
The CAA arbitration fees are divided into two parts: the administration fee and the arbitrator(s) fee. Both fees are fixed by reference to the amount in dispute.
How is the CAA arbitration fee schedule determined?
The arbitration fee schedule is set by the Rules on Arbitration Institutions, Mediation Procedures, and Fees promulgated by the executive branch of the government.
How do arbitration proceedings commence?
Parties must have agreed to submit the dispute to arbitration either by including an arbitration clause in their contract or after a dispute arises, submit the dispute to arbitration. To commence arbitration, the claimant should provide written notice to the respondent when the dispute is submitted to arbitration. The arbitration proceedings begin on the date the respondent receives the written notice.
What are the requirements of an enforceable arbitration agreement?
An arbitration agreement must be in writing. Written documents, correspondence, facsimiles, telegrams, or any other similar types of communications between the parties may evince the parties' mutual intention to arbitrate and may also be deemed to constitute an arbitration agreement.
Who can be appointed as an arbitrator?
Not everyone can be appointed as an arbitrator. According to Article 6 of the Arbitration Act, to act as an arbitrator a person must possess legal or other professional knowledge or experience, a reputation for integrity and impartiality, and:
- have served as a judge or prosecutor;
- have practiced for more than five years as a lawyer, accountant, architect, engineer or in any other commercial-related professions;
- was appointed as an arbitrator of domestic or foreign arbitration proceedings administered by an arbitral institution;
- have taught as an assistant or associate professor for 3 years or as a full professor for 2 years in a domestic or foreign college certified or recognized by the Ministry of Education of the Republic of China; or,
- is a specialist in a specialized field or profession and have practiced in that field for at least five years.
Who can appear as counsel?
Any natural person, foreign or domestic, can act as counsel.
How long does it take for the arbitral tribunal to render the award?
The arbitral tribunal shall render the award within six months of the commencement of the arbitration. The time limit may be extended by three additional months if the arbitral tribunal deems it necessary.
What constitutes a Taiwan award under the Arbitration Act?
An award is considered a “Taiwan” (domestic) award if it is made within the territory of the Republic of China and issued pursuant to the laws (procedural and substantive) of the Republic of China.
What constitutes a foreign award under the Arbitration Act?
An award issued outside the territory of the Republic of China or issued pursuant to foreign laws within the R.O.C. is a foreign arbitral award. The Taiwanese courts have ruled that arbitral awards made in Taiwan but issued pursuant to rules of foreign arbitral institutions (procedural rules), such as the ICC arbitration rules, are considered foreign arbitral awards.
How is a domestic award enforced in Taiwan?
Article 37 of the Arbitration Act stipulates that an award shall have the same force as a final judgment of a court and is binding on the parties. The award normally may not be enforceable unless a competent court has granted an enforcement order. However, it can be enforced without asking the court for an enforcement order if the parties so agree in writing and the arbitral award: (1) concerns payment of a specified sum of money or certain amount of tangible goods or valuable securities; or (2) concerns delivery of a specified movable property (i.e. cars, trucks).
How is an international award enforced in Taiwan?
A foreign arbitral award can be enforced after an application for recognition has been granted by the court. However, the court may dismiss an application submitted by a party for the recognition of a foreign award if it is made contrary to the public order or good morals of the Republic of China or if the dispute is not arbitrable under the laws of the Republic of China. Furthermore, the court may, at its discretion, dismiss an application for the recognition of a foreign arbitral award if the country where the arbitral award is made or whose laws govern the arbitral award does not recognize arbitral awards of the Republic of China.
Is Taiwan a party to the New York Convention?
No, Taiwan is not a party to the New York Convention because the country is not a member of the United Nations. The New York Convention (The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958) is a treaty that requires courts of its contracting states to recognize and enforce arbitration awards made in other contracting states.
Can arbitral awards made in Taiwan be recognized and enforced in other countries?
Yes, although Taiwan is not a signatory of the New York Convention, awards made in Taiwan can still be recognized and enforced in most countries. Countries that have adopted the UNCITRAL Model Law as its domestic arbitration law recognize and enforce arbitration awards made anywhere except on narrow grounds relating to lack of jurisdiction, improper constitution of the tribunal, serious procedural irregularity, or if enforcement of the award would be contrary to public policy, similar to the recognition and enforcement of awards made in New York Convention countries. Countries that do not adopt the UNCITRAL Model Law or do not adopt the Model Law's rules on recognition and enforcement usually have statutes or rules in place to recognize arbitration awards made in non-Convention countries subject to comparable terms as Convention awards.