By Hung Ou Yang and Jia-Jun Fang
Taiwan is a civil law country. The Taiwan Code of Civil Procedure and the Compulsory Enforcement Act are the applicable laws regarding enforcing judgments. Before understanding the somewhat complicated procedures in the following paragraphs, please note that all the legal documents to be submitted for the recognition and enforcement in Taiwan must be written or translated into Chinese. The foreign judgment and its exhibits must be translated into Chinese as well.
Two Steps of Enforcing a Foreign Judgment
To start off, to enforce a foreign judgment or ruling for attachment to a property located in Taiwan, the Taiwanese laws require that such foreign judgment or ruling shall be recognized by a Taiwan court first. After such recognition of the Taiwan court, the foreign judgment or ruling will be enforceable. That being said, in terms of foreign judgment/ruling enforcement, there will be two steps. First, you have to file a petition to the Taiwan court for recognizing such foreign judgment or ruling. Pursuant to Article 402 of the Taiwan Code of Civil Procedure, a final and binding judgment or ruling rendered by a foreign court will be recognized except for certain situations, one of which is violating due process of law or the public policy of Taiwan. Secondly, if recognized, you have to further file a petition to the Taiwan court for enforcement. When granted, the court will render an order to attach the property.
The Foreign Judgment or Ruling Must Be Final and Binding
The foreign judgment or ruling to be recognized must be a final and binding decision, which represents that it cannot be appealed or changed in the foreign court under the foreign laws. The petitioner must provide a certificate or a document issued by the foreign court or the relevant authority to prove that the foreign judgment is final and binding.
For example, neither preliminary attachment nor injunction is recognizable and enforceable in Taiwan because they are not final and binding decisions. However, a foreign ruling, if final and binding, with regard to guardianship, litigation fees, or the parental right and obligation, would be recognizable and enforceable. So far, Taiwan courts have not made a decision regarding whether the mediation minute rendered by the foreign court or the settlement made in front of the foreign court is recognizable and enforceable.
The recognition of a foreign judgment or ruling may be conducted by any government agency of Taiwan if not related to attachment to a property. Once recognized, a foreign judgment or ruling is considered as effective for such government agency. For example, the Household Registration Office of Taiwan can recognize a foreign judgment or ruling in relation to divorce so that the Household Registration Office of Taiwan can register a divorce with such foreign judgment even though there is no recognition of the Taiwanese court. Here, there is no need to file a petition to the court for recognition.
The Reviewing Standard of the Taiwan Court for Recognition and Enforcement
The foreign judgment or ruling must be a final and binding judgment or ruling rendered by a foreign competent court. Generally, it will be recognized by a Taiwan Civil Court as long as it does not fall into one of the exceptions listed by Article 402 of the Taiwan Code of Civil Procedure. There are four exceptions under Article 402, which provides that a foreign judgment or ruling will not be recognized:
As to the second step, filing a petition to enforce the recognized foreign judgment, according to the Taiwan Code of Enforcement, again, a foreign judgment or ruling will be enforced if it does not meet any exceptions listed by Article 402. Therefore, when the Taiwanese court recognizes such foreign judgment or ruling, it is hard to argue that the court shall not enforce it because the court has already examined every exception under Article 402.
Challenging the Foreign Judgment
Most of the time, the foreign judgment will be challenged when the losing defendant does not appear in front of the foreign court. The losing defendant will argue that their procedural right has not been protected because the default judgment is rendered in the absence of the participation of the defendant. See Article 402(2) of the Taiwan Code of Civil Procedure. Even though the defendant based in Taiwan is served with all the legal documents, such as the court notice and summons, in compliance with the foreign laws, the Taiwan court usually will accept the defendant's argument against the default foreign judgment that the legal documents are not served per Taiwanese laws. Here, per the Taiwanese laws, all the legal documents shall be served by the Taiwan courts. However, the Taiwanese laws do not prohibit personal service. As to the service conducted by the Taiwan courts, the foreign court must first request its embassy in Taiwan to initiate judicial assistance, asking the Taiwan Ministry of Foreign Affairs to transfer the legal documents to the competent Taiwan court. Then the court clerk will effectuate the service. It is not necessary to effectuate the service by way of personal service. The relevant procedures are time-consuming and to some extent complicated. Because it is not easy to satisfy the legal requirements of serving foreign legal documents to the Taiwan defendants, most of the defendants would decline to appear in front of the foreign court where the foreign court notice or summons are considered not legally served.
However, if the foreign judgment does not require a hearing for oral arguments, such foreign judgment will be recognizable and enforceable when the defendant submits an affidavit to the foreign court in response to the plaintiff/petitioner. Such kind of judgment will not be considered as a default judgment which is not recognizable and not enforceable even though the defendant does not appear in front of the foreign court. See 92 Supreme Court TaiShan (台上) No. 883. Therefore, in practice, the Taiwan defendant probably would refuse to any affidavit unless all the foreign legal documents are legally served.
To be clearer, the plaintiff/petitioner who is seeking justice in a foreign court shall effectuate the service in compliance with both the Taiwanese laws and the foreign laws. In this regard, our firm can assist you to satisfy all the procedural requirements. However, in general, filing a lawsuit against the Taiwan defendant to a Taiwan court other than a foreign court may be much faster and convenient.
Furthermore, when the foreign court does not recognize the Taiwanese judgments, the mutual recognition requirement will not be satisfied. According to the records in the Taiwanese courts, the judgments rendered in the USA, UK, Canada, Germany, Japan, Korea, Hong Kong, China ("PRC"), Singapore, Belgium, Switzerland, New Zealand, Australia, and Malaysia, will be recognizable and enforceable because the mutual recognition requirement is satisfied. For the foreign judgments rendered in other countries, it would be better to file a new lawsuit against the Taiwan defendant and use the foreign judgments as a leverage during the litigation.
Recent Development
Taiwanese courts increasingly recognize foreign judgments, rulings and arbitration awards from different foreign countries. However, in 2016, the Taiwan High Court declined to recognize a judgment from the British Virgin Islands ("BVI") because BVI has not recognized judgments rendered by Taiwanese courts. See 103 Taiwan High Court Shan (上) No. 493.
Best Practice
If the Taiwan court also has jurisdiction over the subject matter, you may first file a petition in Taiwan for provisional attachment or injunction against all the assets of the Taiwanese debtor in case the debtor hides his assets. Freezing the debtor's assets can ensure future enforcement of a judgment or a ruling. The next step is to consider whether filing a lawsuit in Taiwan is more appropriate in terms of enforcement because the future recognition and enforcement of the foreign judgment or ruling in Taiwan could cost you additional time and legal fees. That is to say, even though the foreign court may be more likely to rule in your favor against the Taiwan defendant, the subsequent procedures as to recognition and enforcement in Taiwan may add more difficulties to your case. Therefore, unless you have other jurisdiction concerns, directly initiating legal actions against the Taiwanese debtors who have assets in Taiwan other than other jurisdictions will be the best practice for a transnational dispute.
AUTHOR: Hung Ou Yang
Managing Partner
Taipei
+886-2-2707-9976
[email protected]
AUTHOR: Jia-Jun Fang
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Of Counsel
+886-2-2707-9976
[email protected]
Copyright Brain Trust International Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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