Taiwan

The recognition of foreign court judgments in Taiwan is primarily governed by the Code of Civil Procedure, while the Compulsory Execution Act mainly regulates enforcement of foreign judgments. However, due to the special cross-strait relationship, matters regarding Mainland China, Hong Kong, and Macao are governed by the Act Governing Relations between the People of the Taiwan Area and the Mainland Area and the Act Governing Relations with Hong Kong and Macau. Besides the statutory basis, Taiwan also builds civil-judicial cooperation with foreign countries through bilateral agreements.

What are the main international treaties or conventions that apply?

The main international treaties or conventions do not apply to Taiwan. Due to Taiwan’s international status, its global participation is limited, which includes being a contracting party of multinational conventions or treaties. However, Taiwan continues to establish similar mechanisms through bilateral agreements with other jurisdictions. For example, in 2011, Taiwan implemented the Agreement between the Taipei Economic and Cultural Office in Vietnam and the Vietnam Economic and Cultural Office in Taipei on Judicial Assistance in Civil Matters, signed by both authorities in 2010.

What legal principles apply if there is no applicable international treaty or convention?

Taiwan applies a conditional automatic recognition principle, meaning the res judicata of final foreign judgments rendered by foreign court takes effect without a separate recognition/trial in a Taiwan court, unless one of the circumstances set forth in Article 402, paragraph 1, of the Code of Civil Procedure (hereinafter, the “Article 402(1) Rule”) is found. For the avoidance of doubt, such recognition itself does not confer executory effect.

If the foreign judgment is executory and intended to be enforced, such as payment and delivery of property, the party must submit the judgment to the court for a recognition judgment, then follow the enforcement procedure set forth in the Compulsory Enforcement Act. On the other hand, if the judgment is non-executory, such as a divorce decree, the party may present the foreign judgment itself to the relevant authority for the administrative procedures.

Where the foreign judgment is executory, enforcement must proceed in accordance with Article 4-1, paragraph 1 of the Compulsory Enforcement Act. Enforcement is permissible only if: (1) none of the circumstances set forth in each subparagraph of Article 402, paragraph 1, of the Code of Civil Procedure is present; and (2) a court of Taiwan has rendered a judgment declaring that enforcement is permitted.

According to Article 4-1, paragraph 1, of the Compulsory Execution Act mentioned above and the Article 402(1) Rule, a final and binding judgment rendered by a foreign court shall be recognized and be permitted for enforcement in Taiwan, except in case of any of the following circumstances:

• where the foreign court lacks jurisdiction pursuant to the laws of Taiwan;
• where a default judgment is rendered against the losing defendant, except in the case that the notice or summons of the initiation of action was legally served within a reasonable time in the foreign country or was served through judicial assistance provided under the laws of Taiwan;
• where the performance ordered by such judgment or its litigation procedure is contrary to the public policy or morals of Taiwan; or
• where there exists no mutual recognition between the foreign country and Taiwan.

Therefore, in proceedings seeking permission to enforce a foreign judgment, Taiwanese courts examine whether the foreign court had jurisdiction over the defendant pursuant to the Article 402(1) Rule. The applied criteria are the provisions of Taiwanese law on jurisdiction and international jurisdiction, such as the Code of Civil Procedure, and the Non-Contentious Matters Act. If the jurisdiction regarding the matter is not specifically outlined in the aforementioned laws, the court in Taiwan will decide based on the law to which the parties have the closest affiliation.

In accordance with the Article 402(1) Rule, service is considered legal when the notice or summons initiating the foreign proceedings is duly delivered in that country within a reasonable period, giving the recipient sufficient time to prepare a defense, and is not affected by constructive notice. Service carried out unilaterally by the foreign court, or by the plaintiff’s counsel via mail or direct hand-delivery in Taiwan, does not satisfy these statutory requirements and will be treated as invalid.

Before the commencement of enforcement proceedings, in addition to fulfilling the foregoing requirement and obtaining a judgment declaring that enforcement is permitted from the court of Taiwan, the suit petitioning for the permission of enforcement shall be brought to the court of the place where the debtor domiciles. If the debtor has no domicile in Taiwan, the jurisdiction over the enforcement proceedings shall be the court where the property is located or where the enforcement will be carried out.

The limitation period for enforcing a foreign judgment is contingent upon the nature of the claim, and the limitation period for enforcing a claim is governed by the law applicable to the legal relationship from which the claim arose, in accordance with Article 36 of the Act Governing the Choice of Law in Civil Matters Involving Foreign Elements.

Article 47 of the Arbitration Law of Taiwan provides that a foreign arbitral award shall be enforceable and have the same force as a final judgment of a court after an application for recognition has been granted by the court of Taiwan.

Article 49 of the Arbitration Law of Taiwan also states that the court shall dismiss an application for recognition of a foreign arbitral award by issuing an order under circumstances where the recognition or enforcement of the arbitral award is contrary to the public order or good morals of Taiwan, or where the dispute is not arbitrable under the laws of Taiwan. Besides, the court may dismiss the application by issuing an order if the country where the arbitral award is made or whose laws govern the arbitral award does not recognize arbitral awards of Taiwan.

Article 50 of the Arbitration Law of Taiwan further stipulates that the counterparty may request the court to dismiss the application for recognition of foreign arbitral award within 20 days after receipt of the application under circumstances where:

• the arbitration agreement is invalid as a result of the incapacity of a party according to the law chosen by the parties to govern the arbitration agreement;
• the arbitration agreement is null and void according to the law chosen to govern the agreement or, in the absence of choice of law, the law of the country where the arbitral award was made;
• a party is not given a proper notice in the arbitral proceedings, or any matters violate the due process;
• the arbitral award is irrelevant to the subject matter of the dispute covered by the arbitral agreement or exceeds the scope of the arbitration agreement, unless the arbitral award remains effective excluding the exceeding part;
• the composition of the arbitral tribunal or the arbitration procedure contravenes the arbitration agreement or, in the absence of an arbitration agreement, the law of the place of the arbitration; or
• the arbitral award is not binding upon the parties or has been suspended or revoked by a competent authority.

The creditor with a valid foreign judgment must file a petition with the court. The court then reviews the petition through trial procedure and, if none of the circumstances stipulated in the Article 402(1) Rule are present, approves the enforcement by rendering a judgment. This judgment authorizes the enforcement officer to take steps to compel the debtor to fulfill their obligations.

In general, once all necessary documents are prepared and the application is filed with the court, the entire process takes approximately six to nine months for the first instance. If the case is more complex or becomes contested, however, the period may extend to one year, two years, or even longer for the first instance. The judgment rendered by the first instance can be appealed to the second and third instance under certain conditions. The second instance takes at least six months. The third instance normally takes about one year.

To file a petition for the recognition of the foreign judgment, the court fee will be determined by the value of the claim. Moreover, where a foreign creditor has no domicile, office, or place of business in Taiwan, the court may, by a ruling on motion by the defendant, order the foreign creditor to provide a security for the litigation expenses.

After the court has rendered a judgment permitting enforcement of the foreign judgment, the judgment creditor then files an application for enforcement to the court with proper jurisdiction. According to Articles 4 to 7 of the Compulsory Enforcement Act, the applicant shall specify: (1) the parties and the statutory agent; (2) the petitioned right to be performed; and (3) the objects of enforcement or the enforcement act to be carried out. They must also submit an original copy of the judgment and a certificate to the effect that the judgment has become irrevocable.

The Civil Execution Department of the court is in charge of the compulsory enforcement. In practice, it takes between 15 days and one month for the court to determine whether the enforcement is allowed after a petition is submitted. The judgment debtor bears the cost of enforcement and necessary expenses, but the judgment creditor shall advance such costs and expenses, which shall thereafter be reimbursed from the proceeds of the enforcement with priority. For pecuniary enforcement matters, no fees will be levied if the value of the claim subject to execution is less than TWD 5,000. Where the amount exceeds this threshold, the court fee for the enforcement will be eight in a thousand (0.8%) of the value of the claim. For non-pecuniary enforcement matters, the enforcement fee is a fixed amount of TWD 3,000.

If a party believes that the court has erred in the findings of fact or in the application or interpretation of law in rendering the judgment, thereby prejudicing that party’s interests, they may appeal within the 20-day appeal period after receiving the judgment. If the appeal period is exceeded without appealing, the judgment shall become a final judgment and can be compulsorily enforced accordingly.

According to the Compulsory Enforcement Act, the court judgment shall become the enforcement title when it is final and irrevocable, which can be used to carry out the compulsory enforcement. Once the compulsory enforcement proceedings commence, the proceedings shall not be suspended unless provided otherwise by other laws.

Once the court renders a judgment permitting enforcement of the foreign judgment, the judgment creditor may apply with the tax authority for the debtor’s tax information, including assets and incomes. Depending on the debtor’s property status, the creditor may decide whether or not to file an application for enforcement to the court.

Also, according to Article 19 of the Compulsory Enforcement Act, the Civil Execution Department may order the judgment creditor to report the relevant information, or it may conduct such an investigation ex officio. The Civil Execution Department may conduct such an investigation by inquiring with the tax authorities and other relevant government agencies, organizations, or individuals who possess knowledge of the debtor’s property. Those who are requested to provide information may not refuse to comply without justifiable reasons.

Moreover, subject to Article 20 of the Compulsory Enforcement Act, if the assets or property of the judgment debtor have been identified as insufficient to satisfy the claim sought to be enforced, the Civil Execution Department may, upon the application of the creditor or ex officio, order the judgment debtor to provide a truthful report on the status of assets subject to enforcement that the judgment debtor held within one year prior to the enforcement. If the judgment debtor disobeys such an order, the Department may order the judgment debtor to provide adequate security or to comply with the enforcement obligations within a specified period. Where the judgment debtor fails to follow the foregoing order, the Civil Execution Department may take the judgment debtor into custody after questioning.

Pursuant to Articles 522 and 532 of the Code of Civil Procedure, in proceedings for petitions for the compulsory enforcement on the grounds of an irrevocable foreign court judgment rendered in civil or family litigation, a creditor may apply for a provisional attachment in cases involving monetary claims or claims convertible into monetary claims, or, where the claim involves non-monetary relief, apply for a provisional injunction for the purpose of securing the satisfaction of a compulsory execution. The place where the enforcement will be carried out shall be within the territory of Taiwan.

Bank accounts

Article 115 of the Compulsory Enforcement Act sets forth the compulsory enforcement against debts that the judgment debtor from third parties shall be carried out by issuing an order for attachment from the Civil Execution Department of the court to prohibit the debtor from collecting it or making other dispositions and prohibit that third party from repaying the debtor. In Taiwan’s practice, the Civil Execution Department of the court will issue an order for attachment to prohibit the judgment debtor from depositing the bank account. If there is a positive balance in the bank account, the court will issue an order for collection, demanding that the bank surrender the balance to the judgment creditor. The judgment creditor may then contact the bank for the transfer of such a balance.

Shares

Article 45 of the Compulsory Enforcement Act sets forth that compulsory enforcement against movable property is carried out by means of attachment, auction, or sale. Where this movable property constitutes shares or securities, when deemed appropriate, the court may issue an order for transmitting the shares to the judgment creditor.

In Taiwan’s practice, where the shares are listed or traded over the counter, the court may, upon the request of the judgment creditor, make an inquiry to Taiwan Depository & Clearing Corporation regarding the security, then designate a broker to sell the shares and distribute the proceeds to the judgment creditor to satisfy the claim.

If the shares are neither listed nor traded over the counter, and the judgment debtor holds the certificates of the shares, the judgment creditor shall report to the court. The court shall then make an attachment and hold an auction, before distributing the proceeds arising from the auction to the judgment creditor.

Debts due to the judgment debtor from third parties

Article 115 of the Compulsory Enforcement Act sets forth the compulsory enforcement against debts that the judgment debtor from third parties shall be carried out by issuing an order for attachment from the Civil Execution Department of the court to prohibit the debtor from collecting it or making other dispositions and prohibit that third party from repaying the debtor. Under the foregoing circumstance, the Civil Execution Department may, after consulting the creditor’s opinion, allow the judgment creditor to collect it, or the court may issue an order to transfer the third-party debt to the judgment creditor. If the court deems it appropriate, it may order the third party to pay the court, which will transmit the payment to the judgment creditor.

Real estate

Articles 75 to 113 of the Compulsory Enforcement Act set forth that compulsory enforcement against real estate is carried out by means of attachment, auction, and compulsory administration.

The Civil Execution Department of the court may designate the custodian and administration of the attached real estate to the related authorities, autonomous bodies, business groups, industrial groups, or the judgment debtor. Under the circumstance that the judgment debtor is designated as custodian, the judgment debtor may continue to maintain the administration or use the attached real estate as before.

If the attached real estate is subject to auction, the enforcement court shall order an appraiser, make a public announcement in advance, and then carry out the sale, upon the application of the judgment creditor or debtor or ex officio, by means of an auction bidding.

If the attached real estate is subject to compulsory administration, the revenue of such administration, after deducting the necessary cost and expenditure, shall be promptly delivered to the judgment creditor. 

Movable property

Articles 45 to 74 of the Compulsory Enforcement Act set forth that compulsory enforcement against movable property shall be carried out by means of attachment, auction, or sale.

Attachment of movable property shall be limited to the extent necessary to satisfy the claim under enforcement and the expenses to be borne by the judgment debtor. After the attachment, the judgment debtor may, prior to the conclusion of the auction, tender payment in cash and petition for the revocation of the attachment. The attached property shall be placed in a storage facility designated by the competent authority.

Following the attachment, the enforcement officer shall promptly set the date for a public auction. However, an officer may dispose of the attached property by sale without conducting an auction under the circumstances stipulated in Article 60 of the Compulsory Enforcement Act.

The court may not enforce against assets that are not legally owned or registered under the judgment debtor’s name, unless otherwise provided by law. An example is the Trust Law in Taiwan, which provides the legal circumstances under which the beneficiary and the owner of the legal title are different. Article 12 of the Trust Law of Taiwan provided that no trust property shall be subject to compulsory enforcement, unless:

• the right of the claim exists in the trust property before the trust is established;
• a right of the claim arises from the administration of trust affairs; or
• unless otherwise provided by the applicable laws.

Yes, the court may enforce against the assets that are jointly owned by the judgment debtor and a third party. Paragraph 1, Article 819 of the Taiwan Civil Code provides that each co-owner may freely dispose of his or her own share. Therefore, the enforcement may execute the right of the judgment debtor, co-owner of the assets, and satisfy the judgment creditor’s claim.

However, Article 827 of the Taiwan Civil Code provides that where several persons who constitute a relationship in common according to the provisions of certain statutes, such as Chapter Succession in the Taiwan Civil Code, hold a thing in common by virtue of the relationship in common, the rights of each owner-in-common extend to the whole thing held in common. Which means, if the judgment debtor and a third person hold the asset under the ownership-in-common, the court will not allow enforcement against the judgment debtor’s asset because there is no proportion for the judgment debtor. Thus, the court may not solo enforce on the portion which the judgment obtained.