On January 2, 2025, the New Taipei District Court of Taiwan Region, China (the “Court”) issued its first civil ruling recognizing a Mainland arbitration award for the year (Civil Ruling No. 1, 113th Year Lu Zhong Xu Zi). The Court recognized and enforced Case No. 0452 of 2021, which had been decided under the rules of the Shanghai International Economic and Trade Arbitration Commission (SHIAC). The case arose from a dispute regarding investment repurchase and equity agreements, which in turn entailed close consideration of a Valuation Adjustment Mechanism (VAM) clause. After Company A had increased its capital holdings in Company B, disagreements arose over (a) repurchase obligations; and (b) cost allocations arising out of Company B's failure to list publicly. Company A then sought arbitration under the SHIAC Rules and obtained a final award. However, the founder of Company B sought to resist enforcement of the award, claiming that the VAM clause breached the public order and good morals of Taiwan Region, China. After review, the Court recognized and enforced the award under the “Act Governing Relations between the People of the Taiwan Area and the Mainland Area”. As the first case decided by the Court in 2025, this case holds landmark significance in the cross-strait arbitration recognition process.
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