Originally from The American Review of International Arbitration (ARIA)

PREVIEW

ABSTRACT

The New York Convention provides a global charter for international dispute resolution, thereby significantly facilitating cross-border trade and investment. Despite its status as one of the world’s leading economies, Taiwan is currently unable to accede to the Convention. This is anomalous and damaging to international trade and investment flows involving Taiwan and more generally. This article examines the current treatment of arbitral awards made in Taiwan, arbitration agreements providing for arbitration seated in Taiwan, and arbitrations involving parties from Taiwan. It then proposes a variety of mechanisms for remedying Taiwan’s exclusion from the Convention.
 

The Republic of China, also known as “Taiwan,” is one of the world’s leading economies, with Taiwanese companies playing a significant and growing role in contemporary international trade and investment. Those economic activities inevitably give rise to cross-border commercial disputes between Taiwanese businesses and their foreign counterparts, as well as the need to resolve such disputes effectively and efficiently. Despite this, the ability of both Taiwanese and foreign companies to resolve their international commercial disputes is significantly impeded because Taiwan is currently unable to accede to the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention” or “Convention”) or to effectively participate in the Convention’s mechanisms for recognition and enforcement of international arbitration agreements and arbitral awards.

This article aims to show that the exclusion of Taiwan from the New York Convention and its framework for the recognition and enforcement of arbitral awards is anomalous and damaging to increasingly important international trade and investment flows. The Convention, with 172 Contracting States, plays an essential role in the resolution of cross-border commercial disputes: it provides uniform, international rules requiring the recognition and enforcement of international commercial arbitration agreements and arbitral awards. The Convention’s vital role in the resolution of international commercial disputes and the facilitation of cross-border trade and investment is universally acknowledged.

Despite the New York Convention’s critical role in contemporary international commerce, and the importance of Taiwan to contemporary international trade and investment, Taiwan is not a Contracting State to the Convention. Article VIII of the Convention provides only for accession to the Convention by States that are members of a U.N. specialized agency or the Statute of the International Court of Justice, or which have been invited to accede to the Convention by the U.N. General Assembly. Most nations do not formally recognize Taiwan as a state and the People’s Republic of China (“China”) has consistently blocked Taiwan’s use of any of the avenues provided by Article VIII, with no indication that it will take any different approach in the future.