The Arbitration Rules of Chinese Arbitration Association, Taipei

Section 1 General Provisions
Article 1
These Rules are established pursuant to Article 5, Paragraph 2 of the Article of Incorporation of Chinese Arbitration Association, Taipei (hereinafter referred to as “CAA”).

Article 2 (Scope of Application)
These Rules shall govern the arbitration administrated by CAA, unless otherwise agreed by the parties or required by applicable law or regulation.

Article 3 (Place of Arbitration)
The arbitration administrated by CAA, may be held at the place outside the territory of the Republic of China pursuant to the agreement of the parties, or failing such agreement pursuant to the decision made by the arbitral tribunal if the tribunal considers it appropriate, having regard to the circumstances of the case, including the convenience of the parties.

Article 4 (Notes and Other Comments)
CAA may issue notes and other comments for the information of the arbitrators for the proper conduct of the arbitral proceedings.

Article 5 (Impartiality and Independence of Arbitrators)
In all cases, the arbitrators shall act impartially and independently in arbitral proceedings.

Article 6 (Confidentiality)
Unless otherwise agreed by the parties or required by applicable law, thearbitrators and the administrators of CAA shall keep confidential all matters relating to the arbitration.

Article 7 (Disclosure)
A prospective or appointed arbitrator shall disclose such circumstances as required by the applicable law of the arbitration.

Section 2 Request and Answer for Arbitration

Article 8 (Request for Arbitration)
A party wishing to request arbitration administrated by CAA shall make the advance payment on costs required for arbitration and submit the following documents:
1. The Request for Arbitration, and sufficient copies of the Request for each of the arbitrators and the parties against whom a claim is being made.
2. The arbitration agreement or the contract containing an arbitration clause.
3. The Power of Attorney for the authorized representative in the arbitration, if any.
4. The Statement of Confirmation for appointing an arbitrator, in cases that the appointment has been made, including the names and addresses of the appointed arbitrator and such circumstances which should be disclosed by the said arbitrator.

Article 9 (Statement of Claim)
The Request for Arbitration shall contain a statement of claim including the following:
1. The names and addresses of the parties; where a party is a legal person or other organization or government department, its name and place of office, or place of business, or place of public service.
2. The names and addresses of the legal representatives or the authorized representatives for the arbitration, if any.
3. The subject–matter of the arbitration and an indication of the amount involved, if any.
4. The relief or remedy sought and an indication of the facts and reasons supporting it.
5. The arbitral institution as the administrator of the arbitration.
6. The date of the Request for Arbitration.
The Request, including the copies of which, may also contain relevant evidences and other materials.

Article 10 (To Send a Copy of the Request to the Respondent)
Upon receipt of the Request for Arbitration, except that CAA is still required to ask the respondent to submit sufficient documents pursuant to the preceding two articles within a specified time, CAA shall send a copy of the Request and the documents annexed thereto to the respondent for its Answer to the Request and notify the respondent to appoint an arbitrator or to approve a proposed arbitrator.

Article 11 (Answer to the Request)
Within 10 days after the receipt of the Request for Arbitration from CAA pursuant to the preceding article, the respondent shall submit to CAA the following:
1.The Answer to the Request, and sufficient copies for each of the arbitrators and the other parties.
2.The Power of Attorney for the authorized representative in the arbitration, if any.
3.The Statement of Confirmation for appointing an arbitrator, in cases that the appointment has been made, including the names and addresses of the appointed arbitrator.

Within 14 days after the receipt of the claimant’s written request made after the appointment of an arbitrator, the respondent shall appoint another arbitrator, and shall provide information in writing to the claimant and the arbitrators, a copy of which shall be sent to CAA.

Article 12 (Statement of Defense)
The answer to the request shall contain a statement of defense including the following:
1. The names and addresses of the parties; where a party is a legal person or another organization or government department, its name and place of office, or place of business, or place of public service.
2. The names and addresses of the legal representatives or the authorized representatives in the arbitration, if any
3. The response to the relief sought and an indication of the facts and reasons supporting it.
4. The arbitration institution as the administrator of the arbitration.
5. he date of the Answer to the Request.
The Answer, including the copies of which, may also contain relevant evidences and other materials.
CAA shall send a copy of the Answer and documents annexed thereto the claimant once CAA receives such documents.

Article 13 (Telefax and Other Electronic Means of Sending Documents)
After the parties or the arbitral tribunal have reached an agreement, the Request, the Answer or further written statements may be sent by telefax or other electronic means pursuant to the rules established by CAA. Such transmissions shall have the same effect as the submission of these statements by conventional means of mailing or delivering.

Article 14 (Amendment to the Claim or Defense)
During the arbitral proceedings, a party may amend or supplement its submissions as to the parties, the subject-matter of the arbitration and the relief or remedy sought, if it is agreed by the other party or if such amendment or supplement will not unreasonably prejudice to the defense of the other party or to the termination of the arbitration.

The restrictions imposed in the preceding paragraph shall not apply before the Respondent receives a copy of the Request for Arbitration.

Unless otherwise agreed by the parties, the arbitral tribunal shall not allow such amendment or supplement if it would fall outside the scope of the agreement to arbitrate.

The party shall make advance payment on the costs of arbitration increased as a result of such amendment or supplement, if any.

Article 15 (Counterclaim)
The respondent may make a counterclaim pursuant to the procedure prescribed in Article 8 of the Rules. The arbitral tribunal may consolidate the arbitral proceedings relating to the claim and the counterclaim.

Unless otherwise agreed by the parties, a counterclaim shall not fall outside the scope of the agreement to arbitrate.

The arbitral tribunal may not allow a counterclaim if it considers that the counterclaim is made by a party with an attempt to delay the arbitral proceedings.

Section 3 Appointment of Arbitrators

Article 16 (Appointment by the Parties)
If the parties have reached agreement on the choice of an arbitrator, the arbitrator is deemed to have been appointed. Failing an agreement on the choice of an arbitrator or the procedure of choosing an arbitrator, each party shall appoint one arbitrator, and the two arbitrators thus appointed shall choose the third arbitrator who will act as the presiding arbitrator of the tribunal. CAA shall notify the parties of the arbitrators so appointed.

Article 17 (Appointment by CAA)
Pursuant to Article 9, Para. 4 of the ROC Arbitration Act, where the parties have agreed to arbitrate an dispute by CAA, the arbitrator may be appointed by CAA as an appointing authority in cases that:
1. If the two arbitrators appointed by the parties have not reached an agreement on the choice of the presiding arbitrator within 30 days after the receipt of the notice from CAA.
2. If the arbitration agreement stipulates that a sole arbitrator is to be appointed, and the parties have not reached an agreement on the choice of a sole arbitrator within 30 days after the receipt of the notice requesting appointment of an arbitrator sent by either party.

Article 18 (Appointment by CAA on behalf of a Party)
A party may request CAA to appoint an arbitrator on his behalf.

In such a circumstance, CAA shall appoint an arbitrator within 14 days after the receipt of the written request from the party, and shall notify the parties and the arbitrators of the appointment.

Article 19 (Appointment by CAA or the Court)
After the appointment of an arbitrator, the first party may request in writing the other party to appoint the second arbitrator within 14 days after the receipt of the request. Failing such appointment of the second arbitrator within the time limit, the first party may request CAA or the court to appoint the second arbitrator.

When an arbitrator is required to be appointed by CAA, the party may request CAA to appoint an arbitrator within the time limit prescribed in the preceding paragraph. Failing such appointment of the arbitrator, the party may request the court to make the appointment.

Article 20 (Replacement of an Arbitrator)
In the event that an arbitrator agreed in the arbitration agreement dies or for other reasons the office is vacant or in the event that he or she fails to act or delay to perform his or her function, the parties may appoint a substitute arbitrator by mutual agreement. Failing such agreement, either party may request CAA or the court to make the appointment.

In the event that an arbitrator appointed by a party fails to participate in the arbitration for reasons specified in the preceding paragraph, the other party may request the said party to appoint a substitute arbitrator within 14 days after the receipt of the request. In such a circumstance, the presiding arbitrator chosen pursuant to Article 14, Paras. 1 and 2(1) will remain unchanged and continue to perform his or her function.

In the event that a party fails to appoint a substitute arbitrator within the time limit specified in the preceding paragraph, the other party may request CAA or the court to make the appointment.

In the event that an arbitrator appointed by CAA or the court fails to participate in arbitration for reasons specified in Paragraph 1, CAA or the court may appoint a substitute arbitrator on its own motion or upon application of a party.

In the event that the presiding arbitrator fails to participate in the arbitration for reasons specified in Paragraph 1, the court may appoint a substitute presiding arbitrator on its own motion or upon application of a party.

Section 4 Hearings

Article 21 (The Place and Date of the Initial Hearing)
CAA shall notify the parties of the place and date of the initial oral hearing determined by the arbitral tribunal pursuant to Article 21, Para. 1 of the ROC Arbitration Act.

The date of the hearing may be changed or adjourned by the arbitral tribunal on its own motion or upon application of a party.

Article 22 (Pleas as to Jurisdiction)
If a party objects to the jurisdiction of the arbitral tribunal, the tribunal shall rule on such objections as soon as possible.

Article 23 (Full Opportunity of Presenting the Case)
The arbitral tribunal shall give the parties a full opportunity of presenting their case and shall make necessary inquiries into their submissions.

Hearings shall be held in camera unless the parties agree otherwise.

Article 24 (Evidence)
Each party shall have the burden of submitting statements in support of the facts and legal points of view in issue with respect of the subject-matter of the dispute, and shall have the burden of proving the facts by producing relevant evidences.

Each party shall also have to submit arguments on the facts and evidences presented by the other party.

Article 25 (Record of the Hearing)
The arbitral tribunal shall order the parties to submit arguments with respect of the inquiries requested by a party, and the tribunal shall make arrangements for a record of their submissions, unless the tribunal considers it unnecessary.

The arbitral tribunal shall also order the parties to submit arguments with respect of the outcome of the inquiries referred to in the preceding paragraph and make arrangements for a record of their submissions.

Article 26 (Failure to Appear at a Hearing)
If a party, duly notified under these rules, fails to appear at a hearing or an inquiry without showing sufficient cause for such failure, the arbitral tribunal may continue the arbitral proceedings.

Article 27 (Witnesses and Experts)
The arbitral tribunal may, upon application of a party or on its own motion, order witnesses or experts to testify at the hearing.

Article 28 (Representation)
The parties may appear through duly authorized representatives. Where the power of Attorney is executed in the territory outside this country, it shall be legalized by a ROC government representative’s office. Failing such legalization, the arbitral tribunal may order that the required legalization shall be obtained within a specified time limit.

Article 29 (Interpretation)
The arbitral tribunal may request CAA to make arrangements for the interpretation, if the tribunal considers it necessary.

Article 30 (Notice)
The provisions with respect to service of process as provided in the ROC Code of Civil Procedure shall apply, mutatis mutandis, to the procedure of the notifications or other written communications in the arbitral proceedings.

Article 31 (Gramophone Record)
CAA shall record the oral hearings with gramophone recorder, and shall produce transcripts according to the gramophone recording.

Any party may, with the consent of CAA, hear the gramophone recording at the time and the place arranged by CAA and may obtain a tape for the recording at their own expenses from CAA.

The tape recording shall be preserved for 10 years after the receipt of the arbitral award by the parties.

Article 32 (Transcripts)
The transcripts of the hearing shall contain the following:
1. The place, date and time of the hearing.
2. The names of the arbitrators, the clerks and the interpreters.
3. The arbitration case.
4. The names of the parties and the representatives, if any.
5. The contents of the proceedings.

The transcripts shall be prepared and signed by the clerk.

The words in the transcripts shall not be cut, supplemented or changed; if there is addition, deletion or amendment, there shall be a signature or seal of the clerk to certify and a clear indication as to the number of the words affected. Where there is a deletion of words, the original text of the words shall remain readable.

The copies of the transcripts shall be sent to the arbitrators and the parties.

Each party may request CAA for permission to peruse or to make a written copy or photocopy of the transcripts.

The transcripts shall be preserved for 10 years after the receipt of the arbitral award by the parties.

Article 33 (Translation)
The arbitral tribunal may order that any documents, evidences or other matter also delivered by a party in a foreign language shall be accompanied by a Chinese translation.

Article 34 (Closure of Hearings)
When it is satisfied that no future submission or argument may be made by the parties and thus an arbitral award may be made, the arbitral tribunal shall declare the hearings closed. After the closure of the hearings, the arbitral tribunal may notify the parties to reopen the hearings before the arbitral award is made, if the tribunal considers it necessary.

Article 35 (Settlement)
The arbitral tribunal may try to convince the parties to agree on a settlement of the dispute before the award is made.

If the parties agree on a settlement of the dispute, the arbitral tribunal shall record the settlement on agreed terms containing the following and signed or sealed by the parties or their representatives and the arbitrators:
1. The names and addresses of the parties; where a party is a legal person or other organization or government department, its name and place of office, or place of business, or place of public service.
2. The names and addresses of the legal representatives or authorized representatives, if any.
3. The names and addresses of the arbitrators presented.
4. The dispute of the settlement.
5. The agreed terms of the settlement.
6. The place of the settlement.
7. The date on which the parties agreed on a settlement.

The record of the settlement shall be delivered by the arbitral tribunal to CAA with 5 days from the date on which the parties reach a settlement, and the original record shall be preserved for 20 years.

Article 36 (Interim Measures of Protection)
At the request of either party, the arbitral tribunal may take any interim measures as agreed by the parties in respect of the subject-matter of the dispute for purposes of the conservation of the perishable goods or providing immediate protection, such as ordering the sale or their deposit with a third person of the goods or other interim measures as the tribunal considers appropriate.

In the circumstances specified in the preceding paragraph, where there is an arbitration agreement covering the interim measures, the arbitral tribunal may make a record of the settlement on agreed terms and may order the requesting party to make advance payment on the costs for such measures.

Section 5 The Award

Article 37 (Decide as amiable compositeur or ex aequo et bono)
The arbitral tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorized the tribunal to do so.

The express authorization referred to in the preceding paragraph may be made before the closure of the hearings orally or in writing.

Article 38 (Decision Making by Arbitrators)
In arbitral proceedings with more than one arbitrator, after closure of the hearings, the arbitrators shall deliberate for purposes of making an arbitral award. The decision of the deliberation shall be made in writing and shall be signed by the arbitrators participating in the deliberation. The dissenting opinion of an arbitrator may be expressed in the book recording the decision of the deliberation.

When there is more than one arbitrator, any award of the arbitral tribunal shall be made by a majority of the arbitrators.

With respect to the deliberation regarding an amount, if each arbitrator's opinion fails to obtain a majority, the largest amount shall be the first subject of the deliberation, and subsequently the lesser amount shall be deliberated until one opinion may obtain a majority of the arbitrators.

If the arbitral tribunal fails to make an award by a majority of the arbitrators, unless otherwise agreed by the parties, the arbitral proceedings shall be deemed to be closed and the arbitral tribunal shall notify the parties accordingly.

Article 39 (Deliberations)
The deliberations for making an award by the arbitral tribunal shall be confidential.

Article 40 (Interim and Partial awards)
The arbitral tribunal is entitled to make interim or partial awards.

Article 41 (Time Limit for the Award)
The final award shall be made within 10 days after the closure of the hearings.

Notwithstanding that the time within which the arbitral tribunal must render its final award has not yet exceeded the time limit prescribed in Article 21 of the ROC Arbitration Act, if the arbitral tribunal fails to render a final award within one month after the closure of the hearings, CAA may send a notice of reminder; if it fails to render its final award within three months, CAA may make the names of the arbitrators public in the Arbitration Journal published quarterly by CAA; nevertheless, if the arbitral tribunal fails to render its final award within the time limit prescribed in or agreed pursuant to Article 21 of the ROC Arbitration Act, CAA may make the names of the arbitrators public in its Arbitration Journal immediately without giving a prior notice of reminder.

Article 42 (The Form of the Award)
An arbitral award shall contain the following:
1. The names and addresses of the parties; where a party is a legal person or other organization or government department, its name and place of office, place of business or place of public service.
2. The names and addresses of the legal representatives or the authorized representatives in the arbitration, if any.
3. The name, nationality and addresses of the interpreter, if any.
4. The holding of the tribunal.
5. The facts and reasons, unless the parties have agreed that no facts and reasons are required to be stated in the award.
6. The date on which and the place where the award was made.

The original award shall be signed by the arbitrators participating in the deliberation; in the event that one arbitrator refuses or is unable to sign, the arbitrators giving their signatures shall state the reason for the absence of the signature.
The original award shall be preserved for twenty years from the date on which the award was made.

Article 43 (Language Used in the Award)
The award shall be made in Chinese, unless otherwise agreed by the parties.

If an arbitrator fails to participate in the deliberation or refuses to sign on the award without showing sufficient cause for such failure, any party, within 30 days after the receipt of the award, may request to reduce or be exempt from the costs required for arbitration.

Section 6 Expedited Procedures

Article 44 (Small Claim)
Where a claim submitted to be settled by arbitration is the small claim specified in Expedited Procedure provided in Article 36 of the ROC Arbitration Act, CAA shall appoint a sole arbitrator within seven days from the day following the date of the receipt of the Request for Arbitration.

Generally, the hearing shall be completed within one day in order to ensure the expeditious determination of such an arbitration case.

Article 45 (Agreement to Adopt Expedited Procedures)
CAA may convince the parties to agree to conduct according to the Expedited Procedures, having regard to the nature of and the amount involved in the claim.

Article 46 (Notice of Hearing)
After the arbitral tribunal decides the place of arbitration and the date of the hearing, CAA shall notify the parties requesting them to present relevant documents, evidences and witnesses at the hearing.

Article 47 (Answer to the Request for Arbitration)
The respondent shall submit its Answer to CAA within seven days after the receipt of the copy of the Request for Arbitration. A copy of the Answer shall be sent to the claimant by CAA.

Article 48 (Default)
If a party, duly notified under these rules, fails to appear at a hearing, without showing sufficient cause for such failure, the arbitral tribunal may, upon application of another party, continue the hearing and make an award on the written statements, submissions and evidences before it is submitted by either party.

Article 49 (Written Submission and Documentary Evidence)
The parties may agree that the arbitral tribunal shall make an award on the basis of written submission and documentary evidence only, without a hearing.

Article 50 (Time Limit for the Award)
Generally, the arbitral tribunal shall render its final award within a time limit of three months.

Article 51 (Facts and Reasons)
An award made under the Expedited Procedures shall contain only a brief statement of facts and reasons, unless the parties have agreed that no such brief statement of facts and reasons is required to be given.

Section 7 Miscellaneous provision

Article 52
The CAA Arbitration Rules shall enter into force on the date on which the CAA Board of Directors has resolved to adopt them; and the same procedure shall also apply to their future amendments.

*Chinese Arbitration Association, Taipei(“CAA”) is an English name of the Arbitration Association of the Republic of China having its principal office at 14th fl, 376, sec. 4, Jen-Ai Rd., Taipei, Taiwan, ROC.
**This English translation prepared by Dr. Cheng-Tsung Huang, PhD.(London). The heading for each article is added by the translator for reference only.
***CAA arbitration Rules entered into force on October 16, 2001.