CAA Presents Its Draft Amendment to Taiwan's Arbitration Law to the Ministry of Justice

CAA Chairman Dr. Fuldien Li, Honorary Chairman Mr. Nigel N.T. Li, Advisor Guang-Qun Fan, and Director Mr. Frank Kung, met with Justice Minister Mr. Ching-Hsiang Tsai and Director Ms. Rui-Lan Zhong of the Ministry of Justice on September 7, 2021, to submit the report on the CAA Draft Amendment to Taiwan's Arbitration Law.

The CAA Board of Directors approved the Draft Amendment at the end of July 2021. The Draft Amendment consists of 10 chapters and 70 articles. Chairman Li said that CAA assisted in the development of the Commercial Arbitration Ordinance in 1961 and the amendment to the Commercial Arbitration Ordinance in 1998. It now puts forth this Draft Amendment in continuance of CAA's tradition and responding to the calls of social responsibility.

Chairman Li pointed out that Taiwan's Arbitration Law has been implemented for nearly 25 years. Although it was originally based on the UNCITRAL Model Law on International Commercial Arbitration 1985 (Model Law) and the legislation of the advanced countries at that time, it has not caught up with the changes in international arbitration brought about by the amendment of the Model Law in 2006. Consequently, some scholars classify Taiwan, Vietnam, Indonesia and Mainland China as the only remaining non-Model Law jurisdictions in the Asia-Pacific region. This diminishes the ability of Taiwanese enterprises, to convince foreign counterparties to agree on selecting Taiwan as the seat of arbitration when negotiating international business contracts. As a result, Taiwanese entities are forced to travel abroad and devote more time and money in dispute resolution, while local legal professionals are deprived of opportunities to stay up to date with international arbitration practices.

Co-convenor Mr. Li reiterated that the Draft Amendment mirrors the structure of the Model Law while incorporating the characteristics of the current law. The adoption of the Model Law will enable Taiwan to bridge with the international forum, overcome obstacles caused by Taiwan's non-accession to the New York Convention, and thereby increasing the cross-border recognition and enforcement of arbitral awards rendered in Taiwan. The Draft Amendment also addresses controversies arising from the current law, such as the qualifications of an arbitrator, the default procedures for challenging an arbitrator, the issues relating to court hierarchy in setting aside proceedings, the confusion over defining “foreign” arbitral awards, as well as the governance autonomy of arbitration institutions.

Minister Tsai expressed appreciation for CAA's active work and efforts on the Draft Amendment. He said the Ministry of Justice is prepared to facilitate amending the current law to align with international practices and trends. He also enlisted CAA's assistance on future work relating to this law reform.