November 2023
No. TWN_003

Introduction to Methods of Dispute Resolution in Taiwan
1. Litigation system in Taiwan
In Taiwan, different litigation systems apply depending on the nature of a particular case.
① Civil/Criminal Litigation
A three-tier court system 1, where cases are heard by the District Courts, High Court (and its branches), andSupreme Court, is used for civil and criminal case.
② Administrative Litigation
A two-tier court system 2, where cases are heard by the District Administrative Litigation Divisions, High
Administrative Courts, or the Supreme Administrative Court is used for administrative cases.
③ Intellectual Property Litigation
Cases concerning certain intellectual property rights and commercial cases are conducted at theIntellectual Property and Commercial Court.
Further, different procedures (for instance, prior mediation) may apply under the abovementioned
framework for cases that are special in nature, such as labor cases and family cases. As judicial reforms
have been implemented in Taiwan in recent years, introducing the Grand Chamber system, Citizen Judgesystem, etc. and various other changes, it is advisable for Japanese companies to pay full attention to therelated systems when engaging in legal action in Taiwan.

2. Period of legal action and alternative dispute resolution methods
When a commercial dispute arises in Taiwan, alternative dispute resolution procedures (ADR) including
arbitration and mediation are also often used in addition to resolution through the courts, etc. In particular,
as legal proceedings in Taiwan might be time-consuming and reaching a final judgment may take years oreven more than a decade, ADR is frequently utilized for resolving commercial disputes where efficiency isof particular importance.

1In Taiwan, this is called the "three-levels-three-instances-system". This means that there are three levels of courts, so there
can be up to three trials for a case.
2In Taiwan, this is called the "three-levels-two-instances-system". This means that there are three levels of courts, but only
two trials for a case. For ordinary cases, trials are conducted at a High Administrative Court for the lower court judgment,
and the Supreme Administrative Court for the final court judgment, but for summary cases, trials are conducted at a District
Administrative Litigation Division for a lower court judgment and a High Administrative Court for the final court judgment.

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3. Recognition of Foreign Judgments / Arbitral Awards① Recognition of Foreign Judgments
Under the Code of Civil Procedure of Taiwan, enforcement of a final and binding judgment rendered by aforeign court is generally recognized by Taiwanese courts, except where there is a certain statutory event,
being (i) where the foreign court lacks jurisdiction pursuant to the Taiwan laws; (ii) where a default
judgment is rendered against the losing defendant 3; (iii) where the performance ordered by such judgment
or its litigation procedure is contrary to Taiwan public policy or morals; or (iv) where there exists no mutual
recognition between the foreign country and Taiwan; see Article 402 of the Code. As a condition precedent
to the enforcement of a foreign judgment, it is necessary to follow procedures to obtain permission toenforce the foreign judgment.
② Recognition of Foreign Arbitral Awards
Although Taiwan has not ratified the Convention on the Recognition and Enforcement of Foreign ArbitralAwards (so-called New York Convention), under the Arbitration Law, Taiwanese courts recognize
enforcement of a foreign arbitral award in principle, except where there is a certain statutory event, being(i) where the recognition or enforcement of the arbitral award is contrary to the public order or good moralsof Taiwan; or (ii) where the dispute is not arbitrable under the laws of Taiwan, etc.; see Articles 49 and 50of the said Law. As a condition precedent to the enforcement of a foreign arbitral award, it is necessary tofollow procedures to obtain recognition of the foreign arbitral award. There are cases where arbitral awards
rendered in Japan, Hong Kong, Singapore, United States and other countries were recognized by courts ofTaiwan. As such, it is often seen that arbitration agreements, providing for arbitration in Hong Kong orSingapore, etc. are used in international transactions with Taiwanese companies.
As foreign judgments and foreign arbitral awards are often recognized in Taiwan, provisions that allow
arbitration in a foreign country or grant jurisdiction to a foreign court are frequently included in contracts
for international transactions with Taiwanese.

4. Cases where a legal action is filed in Taiwan contrary to the agreed foreign
arbitration or agreed foreign jurisdiction① Case where legal action is filed in Taiwan despite an agreement on arbitration in aforeign country
In these cases, a court in Taiwan will first determine whether the arbitration agreement is mandatory (i.e.
it has been agreed to resolve a dispute only by arbitration) or voluntary (i.e. it has been agreed to allowboth arbitration and court proceedings).
If it is interpreted that the arbitration agreement is voluntary, and that a trial can be conducted at aTaiwanese court for such case, then the court would continue to conduct the trial for the case.
On the other hand, if it is interpreted that the arbitration agreement is mandatory, then the Taiwanesecourt will respect the arbitration agreement, and may suspend the legal action, and order the plaintiff tosubmit to arbitration (see Article 4, paragraph 1 of the Arbitration Law).
② Case where legal action is filed in Taiwan despite an agreed jurisdiction of a foreign court
In these cases, a court in Taiwan will first determine whether such agreement grants the foreign court
exclusive jurisdiction or not.

3Since there are no official diplomatic relations between Japan and Taiwan, and so the procedure of service in a foreigncountry cannot be used, when a Japanese court intends to serve process on a defendant in Taiwan with no place for service
in Japan, it must serve by publication.
However, it should be noted that even if the defendant in Taiwan fails to respond to a court summons in such a case and theplaintiff wins the case in a Japanese court, there is a risk that a court in Taiwan may determine the judgment to be “a default
judgment rendered against the losing defendant”.

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If it is interpreted that only non-exclusive jurisdiction has been agreed, and that the Taiwanese court also
has jurisdiction, then the court would continue to conduct a trial for the case.
On the other hand, if it is interpreted that the agreement grants exclusive jurisdiction to the foreign court,
then the Taiwanese court will respect such agreed jurisdiction in principle, and may dismiss such legalaction (see Article 249, paragraph 1 of the Code of Civil Procedure). However, as an exception, it isconsidered that a Taiwanese court may continue to conduct a trial for cases where exclusive jurisdiction isgranted under the Code of Civil Procedure 4, or other cases where the law stipulates otherwise.

5. Conclusion
Although there are certain common features, there are also significant differences between the litigation
systems in Taiwan and Japan, and Japanese companies involved in a dispute related to Taiwan arerecommended to consult lawyers with full knowledge of local laws.
Atsumi & Sakai and A&S Fukuoka LPC include Taiwanese lawyers (a.k.a. “ 台 灣 律 師 ” equivalent toJapanese lawyers (bengoshi)) in their ranks and have built strong relationships with law firms in Taiwan.
Please do not hesitate to contact us if you need legal support regarding disputes related to Taiwan.
End.
---------------------------------------------------------------------------------------------------------------------------THIS NEWSLETTER IS PROVIDED FOR INFORMATION PURPOSES ONLY; IT DOES NOTCONSTITUTE AND SHOULD NOT BE RELIED UPON AS LEGAL ADVICE.
----------------------------------------------------------------------------------------------------------------------------Author/Contact
Marina Fu*
Associate
A&S Fukuoka LPC**, Taipei Bar Association
E: marina.fu@aplaw.jp

Supervising Editors /Contacts
Yasuhiro Usui
PartnerA&S Fukuoka LPC**, Fukuoka Bar Association
E: yasuhiro.usui@aplaw.jp

Tomoyuki Kiyuna
Associate
A&S Fukuoka LPC**, Fukuoka Bar Association
E: tomoyuki.kiyuna@aplaw.jp*Not registered as a Foreign Lawyer in Japan**Although A&S Fukuoka LPC is affiliated with Atsumi & Sakai Legal Professional Corporation, it is a separate corporation and is not a
branch office of Atsumi & Sakai Legal Professional Corporation.

Inquiries:

Atsumi & Sakai Taiwan Team
Email: ipg_taiwan@aplaw.jp
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Atsumi & Sakai is a multi-award-winning, independent Tokyo law firm with a dynamic and innovative approach to legal
practice; it has been responsible for a number of ground-breaking financial deal structures and was the first Japanese law
firm to create a foreign law joint venture and to admit foreign lawyers as full partners. Expanding from its highly regarded
finance practice, the Firm now acts for a wide range of international and domestic companies, banks, financial institutions
and other businesses, offering a comprehensive range of legal expertise.
Atsumi & Sakai has an outward-looking approach to its international practice, and has several foreign lawyers with extensive
4 Based on public interest considerations, specific courts have statutory jurisdiction for specific types of cases, which cannot
be altered by agreement between parties.

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No. TWN_003

experience from leading international law firms, providing its clients with the benefit of both Japanese law expertise andreal international experience.
We are the only independent Japanese law firm with affiliated offices located in New York, London and Frankfurt which,
together with our Tokyo office and Fukuoka affiliated office, enables us to provide real-time advice on Japanese law to ourclients globally.

Atsumi & Sakai
www.aplawjapan.com/en/
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1. ABOUT ATSUMI & SAKAI
Atsumi & Sakai is a partnership consisting of Atsumi & Sakai Legal Professional Corporation, a Japanese professional corporation, a foreign law joint venture underthe Act on Special Measures Concerning the Handling of Legal Services by Foreign Lawyers with certain Registered Foreign Lawyers of our firm, a Japanese Civil Codepartnership among Japanese lawyers, represented by Yutaka Sakai, a lawyer admitted in Japan, and a foreign law joint venture with Janssen Foreign Law Office,represented by Markus Janssen, a foreign lawyer registered in Japan to advise on the laws of the Federal Republic of Germany. In addition to lawyers admitted inJapan, our firm includes foreign lawyers registered in Japan to advise on the laws of the US States of New York and California, the Republic of Korea, India, Englandand Wales*, and the State of Queensland, Australia. Foreign lawyers registered in Japan to advise on state laws also are qualified to provide advice in Japan on thefederal laws of their respective jurisdictions.
Atsumi & Sakai has established an office in London operating as Atsumi & Sakai Europe Limited (a company incorporated in England and Wales (No: 09389892); sole
director Naoki Kanehisa, a lawyer admitted in Japan), and has established an affiliate office in New York operating as Atsumi & Sakai New York LLP (a limited liabilitypartnership established in New York; managing partner Bonnie L. Dixon, a lawyer admitted in New York and a Registered Foreign Lawyer in Japan). We also havea partnership with A&S Fukuoka LPC in Japan (partner: Yasuhiro Usui, a lawyer admitted in Japan) and an affiliate office in Frankfurt operating as Atsumi & Sakai
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* Atsumi & Sakai is not regulated by the Solicitors Regulation Authority for England and Wales.
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law on which one of our foreign lawyers is registered in Japan to advise, may be provided by such a Registered Foreign Lawyer. None of Atsumi & Sakai Legal
Professional Corporation, Atsumi & Sakai Europe Limited or Mr. Naoki Kanehisa is regulated by the Solicitors Regulation Authority for England and Wales, and none
will undertake any reserved legal activity as defined in the United Kingdom Legal Services Act 2007. Advice provided in Germany on the laws of Germany will beprovided by a lawyer admitted in Germany, and advice provided in New York on the laws of New York will be provided by a lawyer admitted in New York.

4©Atsumi & Sakai 2023