Taiwan's CAA adopts new international arbitration rule

Taiwan's Chinese Arbitration Association ("CAA") has adopted new arbitration rules for arbitrations seated outside Taiwan. The Chinese Arbitration Association Rules, International (known as the "CAAI Rules") came into effect on 1 July 2017 and are intended to apply to arbitrations seated outside of Taiwan. The 2001 CAA Rules will continue to apply for arbitrations seated in Taiwan.

The enactment of these Rules, coupled with the CAA's plans to open an office in Hong Kong as part of the Hong Kong government-sponsored legal hub at the former Central Government Offices in Central, form part of the CAA's greater ambitions to expand its offerings to arbitrations seated in jurisdictions outside Taiwan.  The CAA is hoping that these measures will allow the institution to attract more cases arising out of China's "One Belt, One Road" plan.

The key features of the CAAI Rules include the following:

• Default seat of arbitration is Hong Kong (Article 19) – Unless the parties agree otherwise or the Tribunal determines that another seat is more appropriate, the seat of the arbitration is Hong Kong.
• Chinese or English can be used for the notice of arbitration (Articles 7.2 and 20) – In the absence of an express choice on the language of the arbitration, a party filing a notice of arbitration may file such notice in either Chinese or English. The institution will then make a preliminary decision on the choice of the language, which the tribunal can revise or approve as appropriate.
• Time limit on proceedings (Article 30.1) – Arbitration proceedings are generally limited to six months from the date of the tribunal's constitution until the date the tribunal closes the proceedings. The time limit may however be extended by the CAAI upon its own initiative or the Tribunal's reasoned request.
• Time limit on award (Article 33) – Following the closure of the proceedings, the tribunal will have six weeks to render its final award. This time limit can also be extended by the institution upon the Tribunal's reasoned request.
• Expedited procedure for small claims (Article 41) – For claims in which the amount in dispute is less than US$ 250,000, the parties may apply to the CAAI for an expedited procedure. If the CAAI grants the application, the CAAI may shorten any time limits under the CCAI Rules and invite the parties to agree to a sole arbitrator. Once constituted, the tribunal may decide to determine the case on the basis of documents alone. The tribunal will have six weeks from the date of the closure of proceedings to issue its final award. The CAAI may extent the time limit once if exceptional circumstances justify an extension of time. The tribunal's final award can be rendered in summary form.
• Consolidated arbitration proceedings (Articles 9 and 28) – A party may choose to submit claims arising out of or in connection with several contracts under one notice of arbitration. The CAAI will decide whether it would be appropriate to join all claims under a single arbitration in light of circumstances such as the parties' agreement to a single arbitration, whether the claims are made under the same arbitration agreement or are made under "multiple but compatible agreements" as they relate to the same parties, involve common factual or legal questions, and the relief sought arises out of the same transaction(s). If multiple arbitrations are underway, a party may apply to the CAAI for a consolidation of the claims into a single arbitration.
• Emergency Arbitrator (Schedule 1) – For arbitration agreements concluded after the CAAI Rules came into effect, and unless the parties have expressly opted out of this provision, a party may decide, after or at the same time as the filing of the notice of arbitration and before the constitution of the tribunal, to request that urgent measures be granted by an emergency arbitrator. The appointment of the emergency arbitrator will be made within two days of the receipt of the request, and the emergency arbitrator will have fifteen days from the transmittal of the case file to render its decision on the appropriate emergency measures (if any).

As indicated in the introductory remarks of the CAAI Rules, the rules have been drawn from various arbitration rules of established institutions. Although Taiwan is not a signatory of the New York Convention, CAA awards are known to have been successfully enforced outside Taiwan pursuant to bilateral agreements, or on the basis of principles of comity and reciprocity. The enactment of the CAAI Rules in line with accepted international practices, and with Hong Kong as the default seat, is therefore a welcome effort to enhance the enforceability of CAA awards.