The Supreme Court rendered the 103-Tai-Shang-1359 Civil Decision of July 4, 2014 (hereinafter, the "Decision"), pointing out that pursuant to the Arbitration Law, if an arbitrator subject to a request to recuse still participates in the arbitration with such request being rejected after the reasons for the recusal are substantively reviewed, no complaint may be filed to set aside the arbitral award as a remedy.

According to the facts underlying the Decision, Chin Cheng Feng Construction Co. was the contractor for the Peihu Branch project of National Taiwan University Hospital (hereinafter, "NTUH"). Disputes about contract performance subsequently emerged. An arbitral award was rendered by the arbitration tribunal (hereinafter, the "Award at Issue") to demand that NTUH's Peihu Branch pay over NT$40 million. The original trial court set aside the Award at Issue on the following grounds. Firstly, the evidence hardly supports that there is an arbitration agreement between the parties. Therefore, the ground for setting aside an arbitral award "in the absence of an arbitration agreement" under Article 40, Paragraph 1, Subparagraph 2 of the Arbitration Law exists. Secondly, NTUH's Peihu Branch had filed a request to recuse one of the arbitrators for reasons of recusal under the Arbitration Law. Although the request was rejected by the other two arbitrators, still the Award at Issue was rendered before the court ruled on this matter. Therefore, the Award at Issue is subject to the ground for setting aside an arbitral award "that an arbitrator still participates in the arbitration after being subject to a recusal request" under Article 40, Paragraph 1, Subparagraph 5 of the Arbitration Law.

Article 40, Paragraph 1, Subparagraph 5 of the Arbitration Law provides: "A party may apply to a court to set aside the arbitral award in any of the following circumstances:…(5) An arbitrator fails to fulfill the duty of disclosure prescribed in paragraph 2 of Article 15 herein and appears to be partial or has been requested to recuse himself but continues to participate, provided that this does not apply if the request for recusal has been dismissed by the court." According to the Decision, a complaint may be filed to set aside an arbitral award only when an arbitrator subject to a recusal request which is not rejected pursuant to the Arbitration Law still participates in the arbitration. The rejection of a recusal request pursuant to the Arbitration Law means rejection after the reasons for recusal are substantively reviewed. Therefore, if an arbitrator subject to a recusal request which is rejected after the reasons for the recusal are substantively reviewed still participates in the arbitration, no complaint may be filed to set aside the arbitral award as a remedy.

According to the Decision, the request lodged by NTUH's Peihu Branch to recuse one of the arbitrators was rejected by the arbitral decision of the other two arbitrators. Dissatisfied with such arbitral decision, a motion was filed with the Taipei District Court for a ruling of recusal. Since the district court rendered a ruling to reject the motion after substantive review of the recusal reasons, therefore it is questionable if the Award at Issue can still be set aside on any of the grounds under Article 40, Paragraph 1, Subparagraph 5 of the Arbitration Law. Moreover, a complaint may be filed to set aside an arbitral award on the ground that an arbitrator subject to a recusal request still participates in the arbitration should be preconditioned by the fact that such recusal reasons are sufficient to affect the outcome of the award. This was not clarified in the decision rendered by the original trial court. Based on the foregoing reasons, the original decision was reversed and remanded to the Taiwan High Court in this Decision.