Taiwan - Chapter 15 - Force Majeure and Hardship in the Asia-Pacific Region
Helena H.C. Chen is the Joint Head of Office-China and Partner at Pinsent Masons LLP;
Monica Wang is a Partner at Formosa Transnational Attorneys at Law.
Originally from Force Majeure and Hardship in the Asia-Pacific Region
I. Force majeure
A. Background and definition of force majeure in Taiwan
1. Does Taiwan recognize force majeure or any other legal concept similar to force majeure such as frustration, etc. (in the following: “force majeure”)? Are there any statutory provisions or is there any case law setting forth the definition of force majeure?
Taiwan law recognizes the concept of force majeure. There are express provisions in the Taiwan Civil Code (hereinafter referred to as the “Civil Code”) governing force majeure events. For example, Article 634 of the Civil Code stipulates that “the carrier is liable for any loss, damage, or delay in the delivery of the goods entrusted to him” except where “he can prove that the loss, damage, or delay is due to a force majeure event ....” As another example, in a hire of work relationship, Paragraph 2, Article 508 of the Civil Code provides that “if the materials provided by the proprietor are damaged or lost due to a force majeure event, the undertaker shall not be liable therefor.”
However, the definition of “force majeure” is not provided in any statutory provisions, but, has instead over the years been defined by judicial decisions. As explained in the Supreme Court civil judgment of 1997 Tai Shang Zi No. 442, “force majeure is defined as the occurrence of events due to external forces beyond the control of human power.” The Supreme Court civil judgment of 2007 Tai Shang Zi No. 2763 also declared, “the term ‘force majeure’ refers to a cause that is beyond the control of human power, that is, no person can avoid getting into such situation even when using the most rigorous attention.” The above definition has and is still often cited in subsequent court judgments.
2. What events have been recognized as force majeure events by the courts in Taiwan to date?
According to the Taiwan High Court civil judgement of 2005 Shang Zi No. 129, “force majeure refers to the occurrence of extraordinary events, which are prompted by external forces and which are beyond the control of human power, such as lightning, floods, typhoons, and wars, and does not include the occurrence of ordinary events.” On this basis, events that are caused by external forces and which are beyond the control of human power, such as lightning, floods, typhoons, or wars as exemplified by the above judgments, may be considered force majeure events by the courts.
Events that have been recognized as force majeure events by the courts are as follows:
---Severe water disaster caused by typhoon (Taiwan High Court civil judgment of 2003 Shang Yi Zi No. 343)
Plaintiff delivered a vehicle (hereinafter referred to as the “disputed vehicle”) to Defendant for maintenance. After Defendant took possession of the disputed vehicle, a typhoon struck Taipei and the disputed vehicle was submerged in water. Plaintiff claimed damages. Defendant argued that the submergence caused by the torrential rain from the typhoon was a force majeure event, and moreover, it was agreed on the service note of the disputed vehicle that “the service provider shall not be liable for any damages if the damage is a result of acts of God or due to a force majeure event.”
The ruling found that: “The typhoon caused record rainfall in Taipei that was greater than any in the previous 200 years. Even with knowledge beforehand that the typhoon was imminent, there was no way to foresee that Taipei would receive such an enormous volume of rain in such a short period. Therefore, there was no way to prevent the occurrence of the damage. The flooding of the repair plant was a force majeure event.”