The Supreme Court rendered the 103-Tai-Shang-2492 Civil Decision of November 27, 2014 (hereinafter, the "Decision"), in which it was expounded that a branch office, which is an independent entity separately established by the head office, has the ability to act as a party to a lawsuit involving the scope of its business. In addition, if the plaintiff who has filed a complaint against a branch office changes the defendant into its head office in the course of litigation, it shall be deemed an alteration of the claim. Likewise, if the plaintiff who has filed a complaint against a head office changes the defendant into its branch office in the course of litigation, it shall be deemed an alteration of the claim as well.

According to the facts underlying the Decision, the Appellant, whose employment was terminated, sought a declaratory judgment to confirm his employment relationship with the Defendant, which was the head office of Merck, Sharp & Dohme, in the first instance trial. Although its branch office responded to the lawsuit during the first instance trial, still the first instance judgment was rendered with the head office as a party. Subsequently, the branch office, i.e., Appellee Taiwan Branch of Merck, Sharp & Dohme appealed. The first instance judgment was reversed by the second instance decision, in which the Appellant lost the lawsuit. Dissatisfied, the Appellant appealed.

According to the interpretation reflected in the Decision, since a branch office is an independent entity separately established by the head office, the branch office certainly has the ability to act as a party to a lawsuit involving the scope of its business. If the plaintiff in a lawsuit has sued a branch office and then changes the defendant into its head office in the course of litigation, this shall be deemed an alteration of the claim. Conversely, if the plaintiff has sued a head office and then changes the defendant into its branch office in the course of litigation, this shall be deemed an alteration of the claim as well. The first instance court in this matter rendered a judgment, treating the head office as a party but allowed its branch office to appeal to the second instance court and submit a power of attorney.Failing to notice this issue, make proper clarifications and investigate the basis for changing the Taiwan branch of Merck, Sharp & Dohme into a party, the original trial court rendered a substantive decision with the Appellee as a party. Since such litigation proceedings are materially flawed, the original judgment was reversed and remanded.