The Taiwan High Court rendered the 103-Shang-Yi-1760 Criminal Decision of November 6, 2014 (hereinafter, the "Decision"), holding that the offense of undermining claims under Article 356 of the Criminal Code is preconditioned by the circumstances where the obligor damages, disposes or conceals his/her property in an attempt to undermine the claims of the obligee when facing compulsory enforcement. The expression "when facing compulsory enforcement" includes the circumstances where an obligor's property becomes subject to compulsory enforcement at all times.

According to the facts underlying the Decision, the Defendant and the Plaintiff previously had share transaction disputes, which subsequently led to a successful mediation on condition that the Defendant should pay NT$15 million to the Plaintiff. Although the Plaintiff applied for compulsory enforcement based on the mediation transcript on November 7, 2012, the Defendant undermined the Plaintiff's claims by disposing of the Defendant's real estate on November 12 of the same year.

According to the Decision, the offense of undermining claims under Article 356 of the Criminal Code is constituted by an obligor's attempt to undermine the obligee's claims by damaging, disposing of or concealing the obligor's property when the obligor is facing compulsory enforcement. The expression "when facing compulsory enforcement" for such offense refers to a period after an obligee obtains the justifications for enforcement against an obligor but before the compulsory enforcement procedure is concluded.

According to the Decision, after a mediation is successfully concluded in the course of civil litigation, the obligee obtains the grounds for compulsory enforcement. At this juncture, the obligor's property becomes subject to compulsory enforcement at all times. This fulfills the conditions for the circumstances where an obligor is facing compulsory enforcement under Article 356 of the Criminal Code. Therefore, the Defendant's act constitutes the offense of undermining claims under Article 356 of the Criminal Code.