Will Taiwan Become a Model Law Jurisdiction?

Although Taiwan’s legislative and judicial practices already conform to the spirit of the New York Convention (“Convention”) and the Model Law, it appears that non-Taiwanese parties nevertheless remain hesitant to arbitrate in Taiwan. The necessity of becoming a Model Law jurisdiction arises from Taiwan’s inability to accede to the New York Convention. Hence an institutional initiative for legislative overhaul has arrived at an opportune moment.

Since March 2018, a dedicated task force of the Chinese Arbitration Association, Taipei (“CAA”) has been working on the CAA Draft Amendment to Taiwan’s Arbitration Law (“Draft Amendment”). Following a series of consultation hearings in November 2020, March and May 2021, CAA is progressing towards presenting the Draft Amendment to the Legislative Yuan and Executive Yuan of Taiwan.

The dual-purpose of the Draft Amendment is to adopt the Model Law (including the 2006 amendments), with modifications tailored for Taiwan to alleviate certain controversies arising from the Model Law’s interpretation or application as discussed below. It also retains the distinctive provisions of Taiwan’s Arbitration Law, with amendments addressing certain problems of current practices or accommodating future developments which are presented below. Using the Model Law’s order of provisions, the 70 articles in the Draft Amendment merge and harmonise the Model Law with Taiwan’s Arbitration Law.