Engaging Your Taiwan Counsel Sooner Than Later. Do not wait until receiving your final arbitral award then to engage your Taiwan counsel for the recognition and enforcement of the award with Taiwan court.
A client came to me with a final foreign arbitral award. The client spent considerable effort, time and cost and finally got a favorable arbitral award. He thought it would be an easy task to have this final arbitral award recognized by the Taiwan court as he learnt that the procedure of recognition of a foreign arbitral award shall be a formality review, not a substantial review on the merits. The merits of the case shall not be review, correct, but just an easy task? Not necessarily. Below are few things we need to prepare before we apply for recognizing the foreign arbitral award in Taiwan.
Original Arbitral Award, or Its Certified Copy is required
Of course that there must be an arbitral award rendered, and the “original arbitration award” must be submitted to Taiwan courts. What is an “original arbitral award”? We have encountered a case where the foreign arbitral award is only signed by the sole arbitrator, the signed copy was scanned in PDF, and emailed to the parties. This may not be accepted as an “original arbitral award” in the eyes of Taiwan courts.
Notwithstanding, electronic methods of transmission of documents are very common, Taiwan courts, sometimes, take very conservative point of view on this matter.
Another concern of the Taiwan courts is that the Judge would suspect if the “award” or the arbitration is really taken place in the foreign country or before the arbitrator(s). This concern grows more in a case of ad hoc arbitration in a jurisdiction the Taiwan courts are not familiar with, especially in the event when the losing party does not appear or reject to respond in the recognition procedure in Taiwan.
The Judge would often request the petitioner to present an authentic copy of the arbitral award as an alternative. A authentic copy of the award means the award need to be certified by the Taiwan Consulate / Embassy in the place where this Award is made and rendered. This certification procedure can be done by two ways: (1) the Arbitrator must go to the Taiwan Consulate / Embassy “in person” and signed on the original award in front of the consular officer or, (2) the signature on the original award must be notarized by a notary public in the jurisdiction, and the Taiwan Embassy would verify the notarization and certified the asthenic copy of the arbitral award.
If we decided to present an authentic copy of the ward, the procedure of certification involves at least arbitrator’s signature in front of the consular officer or notary public. As such, if such a required of “original” and authentic copy can make known to the arbitration panel earlier, make sure the formality of the “award” is in accordance with the requirement of Taiwan courts, it is advisable.
Original Arbitration Agreement, or Its Certified Copy
The second document need to be submitted to the Taiwan Court for recognition is the original of arbitration agreement. Arbitration is a procedure subject to parties’ agreement. In Taiwan, the “agreement” must be in writing, and an agreement is deemed to be constituted in writing if it is contained in a document signed by the parties, securities, or in an exchange of letters, telexes, telegrams, or other means of telecommunication which provides a record of the agreement.
The issue here is how to prove the agreement consummated by means of telecommunication or alike is true and authentic? The Taiwan courts have taken a loose scrutiny test on this requirement, but the plaintiff for recognition still need to prove the true and authentic of the record of telecommunication.
If the parties have incorporated an arbitration clause in their contract, or the parties have entered into an arbitration agreement separately before or after the dispute in connection with their contract arisen, please consult the Taiwan lawyer to ensure the consent of arbitration is well established from the perspective of Taiwan laws.
Full Text of Applicable Arbitration Rules with Chinese Translation
As arbitration is based on parties’ consent, the parties may agree to use any rules as the rule of arbitration. We would advise the parties to choose the international institution rules of arbitration as the rule o If we are asked to advise on whether rules of arbitration are preferred. This is because when filing the recognition, petitioner need to submit with the “full text” of applicable arbitration rules with full Chinese translation. The practical issue we encountered is the applicable arbitration rules may be lengthy or its only one chapter of a big procedure rules. In a recent case, we found that the parties draft the arbitration agreement stating that “this arbitration will apply to the procedure rules of South Africa”. It turns out that it may be referred to a whole set of the High Court Uniform Rule. However, only few sections of procedure rules are relevant. Under such a circumstance, if the party is requested to provide the full Chinese translation of the applicable rules, that will be very costly.
Interest and Cost of Arbitration
It is common that the interest and cost of arbitration is to be determined in the same arbitral award or addendum award.
The interest and cost of arbitration granted by the arbitral award or its addendum award is usually only a “formula”, not an exact figure. The execution chamber of Taiwan may have difficult to confirm the exact amount of interest and cost because (i) the Court would only recognize the arbital awar or its addendum per se and the Court will NOT calculate the exact amount for the petitioner, and (ii) the execution chamber is not familiar with nor capable of confirming the “applicable interest rate of the foreign country”. As such, the enforcement procedure after arbitral award is recognized would often delay.
Conclusion
When you entire into an arbitration procedure in foreign country and intend to enforce this foreign arbitral award in Taiwan, you need to plan ahead and the Taiwanese counsel need to be involved earlier about the whole situation of the arbitration, to ensure the smooth recognition procedure.
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