Taiwan Supreme Court
Ruling on Civil Law Matters
Tai-Appeal No. 1084 Ruling of 2020

Petitioners against the Ruling            

The 7874 Petitioners as laid down in

Agents ad litem for the plaintiffs

Attorney San-Jia LIN
Attorney Yu-Yin CHANG
Attorney Xin-Wen HUANG
Attorney Hong-Yi KUO

In matters in respect of claims of damages between the petitioners and Formosa Plastics Corporation, Ltd., et al. the petitioners filed an interlocutory re-appeal against the Ruling of Taiwan High Court of March 16, 2020 (Appeal No. 1466 Ruling of 2020), the Court’s ruling is as the following:

Ruling:

The Ruling of Taiwan High Court above is rescinded and Taiwan High Court shall make a new ruling.

Reasoning:

1. The Petitioners in this case (all of them are of Vietnamese nationality) filed a claim before Taiwan Taipei District Court, in which they claimed that, in accordance with the report published by the Vietnamese government in 2016, effluence discharge that contained toxic substances such as phenol and cyanide resulted from the illegal discharge made by the respondent Formosa Ha Tinh Steel Corporation infringed the right to work and the right to health of the petitioners and the right to life of the spouses of the petitioners. As of 2013, the shareholders of Formosa Ha Tinh Steel Corporation included Formosa Plastics Corporation, Ltd., Nan Ya Plastics Corporation, Ltd., Formosa Chemicals & Fibre Corporation, Ltd., Formosa Petrochemical Corporation, Ltd., Formosa Heavy Industries Corporation, Ltd., Formosa Taffeta Corporation, Ltd., Mai-Liao Power Corporation, Ltd., China Steel Corporation, Ltd., and Formosa Plastics USA Corporation, Ltd.. As of 2016, the shareholders of Formosa Ha Tinh Steel Corporation included Mai-Liao Power Corporation, Ltd., the respondents Formosa Plastics USA Corporation, Ltd., JFE Holdings, Inc. Ltd., Formosa Plastics International (Cayman) Ltd., Formosa Chemicals & Fibre International (Cayman) Ltd., Formosa Petrochemical International (Cayman) Ltd., Formosa Taffeta (Cayman) Ltd., China Steel Asia Pacific Holdings Pte Ltd., while the respondent Formosa Ha Tinh (Cayman) Ltd. was a holding company of Mai-Liao Power Corporation, Ltd., et al.. The above companies shall bear joint and several liability of torts together with Formosa Ha Tinh Steel Corporation. Moreover, the petitioners claimed that, in accordance with Articles 172, 584 and 601 of the Civil Code of Vietnam, Article 13 of the Law on Fisheries of Vietnam, Articles 112 and 160 of the Law on Environmental Protection of Vietnam, Articles 34 and 38 of Law on Water Resources of Vietnam, Article 61 of Law on Natural Resources and Environment of Sea and Islands of Vietnam, et al., the Respondents shall bear joint and several liability of compensation to the Petitioners of the amount of 140,273,562 New Taiwan Dollars, the Respondents shall immediately cease the pollution activities, adopt necessary measures to remove the pollution, and adopt remedial measures to repair and improve the environment. While Taiwan Taipei District Court dismissed the claims of the petitioners on ground that courts in Taiwan lacked jurisdiction to hear the said case, the petitioners filed an interlocutory appeal against the ruling of Taiwan Taipei District Court, which was heard by Taiwan High Court. Taiwan High Court held that, according to the facts claimed by the petitioners, the domicile, principal office or principal place of business of the Respondents were in Taiwan, Vietnam, Cayman Islands, the USA, Japan, and Singapore, and that both the activities that committed torts and the results of the pollution happened in Vietnam. In accordance with Article 15, Paragraph 1 and the proviso of Article 20 of Taiwan Code of Civil Procedure, applied mutatis mutandis to this case, only the Vietnamese courts where the activities that jointly caused torts shall have the jurisdiction to hear the case. Thus, Taiwan High Court found that Taiwanese courts lacked jurisdiction to hear the said case, and that the said case cannot be transmitted to a Vietnamese court in accordance with Article 28 of Taiwan Code of Civil Procedure, in ruling to maintain the ruling made by Taiwan Taipei District Court in dismissing the claims of the petitioners. Thus, Taiwan High Court dismissed the appeal made by the petitioners.
   
2. However, the governing Taiwanese statute, Act Governing the Choice of Law in Civil Matters Involving Foreign Elements, does not expressly stipulate how the jurisdiction to hear a case involving foreign elements shall be allocated. In considering whether a Taiwanese court shall have jurisdiction to hear a civil case that involves foreign elements, the court shall consider the civil stakes involved in the case concerned and their connections with the various possible forums, taking into account the provisions on jurisdiction to hear a civil case in the statutory law and the relevant principles and norms in allocating the jurisdiction to hear a case involving foreign elements. Further, the court shall make its decision after taking into consideration elements such as the substantive fairness of between the parties, and the expediency and efficiency of the litigation proceedings. Further, considering that the boundaries of judicial sovereignty between the states, a domestic court, in principle, may only directly rule on the reasonable boundary of the jurisdiction to hear a case of the courts of the state, in demarcating the boundary of the court of the state in hearing a case involving foreign elements, and shall refrain from ruling on the exercise of jurisdiction of a foreign court. On this matter, a fundamental difference exists in terms of ruling on the allocation of jurisdiction between the courts within a state, which a Taiwanese court may do in accordance with the statutory law on civil procedure, and ruling on the allocation of jurisdiction between a domestic court and a foreign court, which concerns the principles governing that area of law. In this light, the provisions of Taiwan Code of Civil Procedure may only be relied upon in making a judgment, as a reference point, insofar as they do not contradict with the principles governing the allocation of jurisdiction to hear a civil case between courts of different states, and also insofar as their application in the particular case is just and proper. In the above light, the proviso of Article 20 of Taiwan Code of Civil Procedure, which provides that the court other than that for the location of a codefendant’s domicile may obtain jurisdiction over the action in accordance with the provisions of Article 4 through Article 19 instead of the court of the codefendant’s domicile, is a provision that governs the allocation of jurisdiction between the courts within a state. In extending the application of the proviso of Article 20 of Taiwan Code of Civil Procedure to the situation of the allocation of jurisdiction between a domestic court and a foreign court, the Ruling of Taiwan High Court produced a result that denies the possible exercise of jurisdiction of the Taiwanese courts to hear a case based on a jurisdictional link arising from the location of the domicile of the defendants. This is in contradiction with the above principle that a provision in the domestic law may only directly rule on the reasonable boundary of the jurisdiction to hear a case of the courts of the state, in demarcating the boundary of the court of the state in hearing a case involving foreign element, and the result of its ruling cannot be considered just and proper. In any event, the proviso of Article 20 of Taiwan Code of Civil Procedure cannot be relied upon in deciding the allocation of jurisdiction between a domestic court and a foreign court. In considering that Taiwan High Court did not fully consider the above principles in relying on the proviso of Article 20 of Taiwan Code of Civil Procedure in its decision on the allocation of jurisdiction between a domestic court and a foreign court, the said Ruling may not be considered to be consistent with the law. In sum, the petitioners argued that the said Ruling of Taiwan High Court erred in its application of the law is not without merits.
   
3. Based on the above reasoning, the Court finds that the petition is meritorious. In accordance with Article 499-1, Paragraph 2, Article 477, Paragraph 1 and Article 478, Paragraph 2 of Taiwan Code of Civil Procedure, the Court makes its ruling as stated in the operative paragraph above.

(Sealed of the Court)

on November 11, 2020

thus ruled Second Chamber, Taiwan Supreme Court composed of
the Presiding Judge Chong-Yu CHEN
Judge Yu-Fen LIANG
Judge Shu-Yan CHOU
Judge Shu-Yuan HUANG
Judge Li-Ling CHEN

It is certified that the authentic copy is identical with the original.

Clerk

Jin-Sheng Kuo (Sealed)

November 18, 2020

Original Ruling in Mandarin