Recognition and enforcement of foreign judgments in Taiwan

Yes, there is an exequatur procedure for the recognition and enforcement of foreign judgments in Taiwan. The petitioner may present the final judgment rendered by a foreign court and request the court of Taiwan to recognize it. Once it has been recognized, the petitioner may then request the enforcement court of Taiwan to enforce the foreign final judgment.

According to Article 4-1 of the Compulsory Enforcement Act, a petition to enforce a final judgment rendered by a foreign court is permissible only after it has been recognized by a Taiwanese court under Article 402 Paragraph 1 of the Taiwan Code of Civil Procedure. According to Article 402 Paragraph 1 of the Taiwan Code of Civil Procedure, a Taiwanese court will recognize a final judgment rendered by a foreign court only if it satisfies the following conditions:

1. The foreign court rendering the judgment had jurisdiction over the subject matter according to the laws of Taiwan;
2. If a default judgment was rendered against the defeated defendant by the foreign court, (a) such defeated defendant was duly served within a reasonable time in the jurisdiction of such court in accordance with the laws and regulations of such jurisdiction or (b) process was served on such defeated defendant with judicial assistance of Taiwan;
3. The judgment and the legal procedures resulting in the judgment were not contrary to the public order or good morals of Taiwan; and
4.  Judgments of Taiwanese courts would be recognized and enforceable in the jurisdiction of the foreign court rendering the judgment on a reciprocal basis. 

Here are some important judicial precedents regarding the criteria considered by Taiwanese courts for recognizing foreign judgments: 

Whether There Was Proper Service in Default Judgment

Regarding item (ii) of the requirements mentioned above, according to Taiwan Supreme Court Civil Judgment No. Tai-Shang-Zi 883 (2003), this requirement aims to ensure that a Taiwanese citizen’s stake in litigation is protected in a foreign litigation procedure. Therefore, it should be determined based on whether the defendant’s substantive defense rights are fully protected. In the case under the above judgment, because the trial in the U.S. court adopted an oral hearing procedure, the defendant was not legally notified and did not attend the oral hearing. The defendant could not substantively exercise its defense rights during the oral hearing, and thus the Taiwan Supreme Court upheld the lower court’s decision to refuse recognition of the foreign judgment. 

Public Order or Good Morals

To be recognized and enforced in Taiwan, one of the requirements for a foreign court judgment is that it must not be contrary to Taiwan’s public order and good morals. According to the Taiwan High Court Taichung Branch Court Civil Judgment No. Zhong-Shang-Zi 169 (2020), “the term 'public order' refers to the concrete expressions of the founding spirit and fundamental national policies, while 'good morals' pertains to ethical concepts originating from the public. Recognition of a foreign court’s final judgment can be refused under this clause if such recognition would result in a violation of the fundamental principles or basic concepts of Taiwan’s legal or ethical order.” 

In practice, it is not rare for the Taiwanese court to deny recognition of a foreign judgment based on this clause. One thing worth noting is that the Taiwan Supreme Court has held that the fundamental legal principles in Taiwan may also be considered part of the public order in Taiwan. For example, the Taiwan Supreme Court has once ruled that punitive damages awarded based on tort in the U.S. violate the public order in Taiwan, as the rules of civil tort in Taiwan aim to compensate for any losses incurred and do not provide for punitive damages (Taiwan Supreme Court Civil Judgment No. Tai-Shang-Zi 552 (2011)). On the other hand, since there are punitive damage regulations in the Taiwan Patent Act, Trade Secret Act, and Fair Trade Act, some Taiwanese courts have held that punitive damages for IP infringement or trade secret infringement do not contradict public order in Taiwan. (Taiwan Taipei District Court Civil Judgment No. Zhong-Su-Zi 233 (2012)). Therefore, whether a foreign judgment violates the fundamental legal principles in Taiwan depends on the legal field involved in such foreign judgment. 

Reciprocity

According to the Taiwan Supreme Court Civil Order No. Tai-Shang-Zi 1367 (2013), “The so-called mutual recognition does not refer to mutual recognition of states or governments under international law between that country and our country. Instead, it refers to mutual recognition of court judgments between courts on the basis of reciprocity. If that foreign country has not explicitly refused to recognize the effectiveness of our judgments, efforts should be made to recognize the effectiveness of that country’s judgments from a broad and proactive perspective of reciprocity.” That is, Taiwanese courts have a relatively lenient interpretation of this requirement. Essentially, as long as the foreign country has not explicitly refused to recognize Taiwanese judgments, that country’s judgments will be recognized in Taiwan. 

No. According to the Taiwan Supreme Court Civil Order No. Tai-Shang-Zi 216 (2021), the court will only review whether the foreign judgment meets the conditions listed in Article 402 Paragraph 1 of the Taiwan Code of Civil Procedure, without retrying the same case. 

Generally, it takes approximately six months if the necessary documents are prepared and presented to the court. However, some cases took up to a year to two years, or even longer. The time required depends on the complexity of the case and various factors, such as the defenses raised by the opposing party. 

Yes. The opponent has the opportunity to participate in both the procedures for the recognition and the procedures for the enforcement of the foreign final judgment, by submitting defenses/objections to the court. 

Yes. Alhough Taiwan is not a signatory to the New York Convention due to its unique international status, Taiwan generally will recognize and enforce a foreign arbitral award. According to Article 47 Paragraph 2 of the Taiwan Arbitration Act, a foreign arbitral award, once recognized by the Taiwanese courts, has the same effect between the parties as a final judgment rendered by the Taiwanese courts and can serve as a basis for enforcement in Taiwan. Once it has been recognized, the petitioner may then request the enforcement court of Taiwan to enforce the foreign arbitral award. The Taiwanese courts shall refuse, ex officio, to recognize the foreign arbitral award if any of the following circumstances exists:

1. Recognition or enforcement of the foreign arbitral award would violate Taiwan’s public order or good morals.
2. The subject matter of the dispute cannot be resolved by arbitration under the laws of Taiwan. 

In addition, if the country where the arbitral award is made, or whose laws govern the arbitral award, does not recognize arbitral awards from Taiwan, the Taiwanese court may, at its discretion, dismiss the application for recognizing the foreign arbitral award. 

Lastly, the Taiwan Arbitration Act provides that the opposing party has the right to apply to the court to dismiss the recognition of a foreign arbitral award under certain circumstances. These circumstances include situations where the arbitration agreement is invalid under the applicable law, the foreign arbitral award is unrelated to the subject matter of the arbitration agreement or exceeds the scope of the arbitration agreement, or where the composition of the arbitral tribunal or the arbitration procedure violates the agreement of the parties, among others. 

Here are some important judicial precedents regarding the criteria considered by the court for recognizing foreign arbitral awards: 

The Scope of “Foreign Arbitral Award”

According to Article 47 Paragraph 1 of the Taiwan Arbitration Act, a foreign arbitral award is one that is rendered outside the territory of Taiwan or rendered within Taiwan based on foreign laws. According to Taiwan Supreme Court Civil Judgment No. Tai-Shang-Zi 1563 (2021), “foreign laws” include foreign arbitration laws, arbitration rules of foreign arbitration institutions, and arbitration rules of international organizations. Therefore, an arbitral award rendered within Taiwan based on foreign laws, such as the ICC Arbitration Rules, will be considered a foreign arbitral award and must be recognized by a Taiwanese court before it can be enforced. In addition, although Article 40 of the Taiwan Arbitration Act allows a petitioner to apply to the Taiwanese court to set aside an arbitral award if the award has certain procedural defects, the aforementioned Supreme Court judgment specifies that Article 40 applies only to domestic arbitral awards and not to foreign arbitral awards. 

Public Order or Good Morals

According to the Taiwan Taichung District Court Civil Judgment No. Zhong-Ren-Zi 1 (2006), whether the recognition or enforcement of a foreign arbitral award would violate Taiwan’s public order or good morals depends on, when the foreign arbitral award mandates a specific performance, whether the legal effects of such a foreign arbitral award violate the general interests and moral concepts of Taiwanese society, or if the reasons underlying the legal effects of the foreign arbitral award violate these general interests and moral concepts. If the matter is unrelated to the general interests of society or general moral concepts, then the issue of whether it violates public order or good morals does not arise. For example, in the above judgment, since the foreign arbitral award adopted the “piercing the corporate veil” principle, which was not explicitly adopted by the Taiwan Company Act at that time, the opposing party argued that the adoption of such a principle violated Taiwan’s public order and good morals. However, the court held that since the adoption of such principle pertains to the substantive determination of the parties and their commercial relationships, which falls under the arbitrator’s discretion in establishing facts and applying the law, it does not relate to the general interests and moral concepts of society, and therefore does not violate the public order or good morals in Taiwan. 

Reciprocity

In the Taiwan Taichung District Court Civil Judgment No. Zhong-Ren-Zi 1 (2006), the underlying foreign arbitral award was made in the U.S. and based on the Commercial Arbitration Rules of the American Arbitration Association. Since the U.S. and Taiwan have entered into the Sino-American Treaty of Friendship, Commerce, and Navigation, which includes a reciprocal treaty for arbitration matters, the arbitral award in question should be recognized.

Generally, it takes nine months if the necessary documents are prepared and presented to the court. However, some cases may take up to a year to two years, or even longer. The time required depends on the complexity of the case and various factors, such as the defenses raised by the opposing party, making it difficult to generalize. 

Yes. The award debtor has the opportunity to participate in both the procedures for the recognition and the procedures for the enforcement of that foreign arbitral award, by submitting defenses/objections to the court.