Recognition and enforcement of Taiwan’s courts’ civil judgements abroad: a practical case

Written by Vincenzo R. Palmisano.

Image credit: Decisão judicial by Jeso Carneiro/Flickr, license CC BY-NC 2.0

This article was inspired by an application filed before the Rome Court of Appeal in Italy concerning the recognition of a final judgment issued in Taiwan by the District Court of New Taipei. It provides a curious case of how Taiwan’s de facto statehood can be interpreted abroad.

A European citizen received a large compensation payment from a Taiwanese company as the result of a judicial proceeding carried out in Taipei. The plaintiff then applied before the Court of Rome in Italy looking for recognition of the Taiwanese judgement. Previously, in fact, the Taiwanese company obtained – at the end of a completely different proceeding that occurred between different parties – the assignment of several account receivables from GSE S.p.A. (owned by the Ministry of Economy).

During the proceedings for the recognition of the Taiwanese judgement in Italy, the defendant (the Taiwanese company) claimed a lack of requirements according to Italian law of the judgment issued in Taipei to be considered a validly issued judgement, objecting that the Italian Republic does not recognize Taiwan as a state. Since 1970 diplomatic relations between the two countries have been formally interrupted due to Italy’s full adherence of a “One-China Policy”.

The defendant argued that, given the lack of recognition and consequent lack of Taiwan’s international personality, the judgement issued in Taiwan had to be deemed as non-existent for the Italian judge.

This approach by the defendant relies on the so-called constitutive theory of recognition, which however was soon disavowed by internal jurisprudence. In fact, except for a few precedents, including a case dated back to 1971 (Court of Bolzano 21 May 1971, in which the recognition was denied to a divorce decree issued by German Democratic Republic which was not recognized by Italy), there are very few examples in Italy of judicial adoption of the constitutive theory.

The Rome Court of Appeal rejected this approach with an ordinance on the basis of the following two arguments:

  1. By establishing that the recognition of a state by the international community has no legal value but a “merely political value”, and that together with the existence (or not) of diplomatic relations, this is not legally relevant.
  2. Stating that the central theme of the case at issue was the assessment of an effective and independent sovereignty by the Government of Taiwan over its territory.

With regards to this last point, according to the Court of Rome, it is widely known that Taiwan exercises the typical sovereignty of a “state” in an effective and independent manner on the population of the island. Indeed, Taiwan has a constitutional system, its own capital, a separate currency and even an army. Therefore, the Court concluded by excluding any doubt about the effectiveness of Taiwan’s de facto sovereignty over its territory and, consequentially, of the validity of a judgement issued by a Taiwanese Court.

The same arguments – after the filing of an appeal by the defendant against the ordinance which ruled in favour of the plaintiff – were confirmed by the Court of Appeal of Rome, with a shorter argument focused solely on the legal value to be attributed to the lack of recognition of Taiwan.

The Court pointed out that the ascertainment of the international personality of a state/entity is based on two main requirements:

  1. “effectiveness”, in the sense of the exercise of an effective sovereignty of the state/organization on a territorial community; and
  2. “independence”, which means that the government/organization does not depend on another State and that it can freely exercise its sovereignty.

An organization of government that effectively and independently exerts its power over a territorial community becomes an international entity automatically, without any need for recognition from the international community. Moving from this assumption, the Court of Appeal concluded, once again, that the recognition (or lack of recognition) of a state had very limited legal relevance. The recognition belongs, in short, to the realm of politics; it shows nothing more than the intention of establishing friendly relations between countries.

By adopting without caveats the declarative theory of recognition the Court of Appeal of Rome concluded that there could be no doubt as to whether Taiwan must be acknowledged full international legal personality. Consequently, there is no such obstacle for a Taiwanese judgement to take effect in Italy.

An argument raised by the plaintiff in support of the possibility of recognition which is worth mentioning, relates to an exquisitely literal element found in the Italian Code of Private International Law (law no. 218/1995): in the entire body of the law, the term “law of the state” is constantly used to identify the referenced entity. There is only one exception: Art. 64 “Recognition of foreign judgements”: there the legislator uses the wording “law of the place where the trial was held”. This cannot be considered random chance, but rather a conscious choice of the legislator, given the complexities entailed by the uncertain outlines of the definition of “state”.

The debate between declarative theory and constitutive theory arises from the question of whether the recognition of a state by other states and/or by the international community should be given legal or solely political value. According to constitutive theory, the legal act of recognition creates the international personality of the entity. Conversely, according to the declarative theory, the acquisition of the international personality is a fact unrelated with recognition and pre-existing to it.

The Italian Supreme Court of Cassation had already addressed the matter with two old judgements:

  1. In the first, Cass. 1 February 1975, no. 468, the Court expressed itself in the following terms: “In accordance with the vastly prevalent doctrine in Italy and throughout Continental Europe […], it is irrelevant whether the State of the court maintains normal diplomatic relations with the foreign State covered by the provision of private international law to be applied or that the latter has not been recognized by the former. The necessary and sufficient condition for such application is the actuality of the foreign judicial system, whether or not the State from which it emanates is recognized”.
  2. The second, pen. 1 June 1985, no. 1981, also expresses itself in terms suggesting the full adherence of the Supreme Court to the theory that grants declarative effects to the recognition, since it is established that “for the purposes of International personality, it is irrelevant that a certain entity has been recognized as de facto or de jure by some state government, given that the recognition is not constitutive of that personality, but belongs to the realm of politics and is devoid of legal consequences”.

From what is described above, it seems possible to affirm that the case from which this document takes its cue falls in line with those pronouncements that attribute pivotal importance to the finding by the judge called to decide on the recognisability of a Taiwanese judgement of the “de facto statehood” of Taiwan. This tradition of jurisprudence, prone to declarative theory:

  1. allows the judiciary to rule the case without dealing with complex issues of international law and international relations; and, on the other hand
  2. the independence of the judiciary on this point should keep the executive sheltered from diplomatic embarrassments caused by recognition of judgements coming from non-formally recognized s

It is likely that in this case the Court – allowed to do so by art. 10 of the Italian Constitution – made direct application of international customary law, thereby reaching the conclusion of Taiwan’s “de facto statehood”. The Court found that Taiwan, fulfilling the criteria set out in Art. 1 of the Montevideo Convention of 1933 (i.e. with a defined territory, a permanent population, an effective government) could be said “sovereign” and, as a consequence, it concluded that Taiwan could in all respects be defined as sovereign for the limited purposes of the pending judgement.

Vincenzo R. Palmisano holds a PhD from the Univeristy of Rome Tor Vergata. He is also an Italian qualified lawyer, working as senior associate at Picozzi & Morigi law firm in Rome.

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