The proceedings where dissenting shareholders petition the company to repurchase their shares at a fair price have been stipulated respectively by Article 182, Paragraph 1 of the Non-Contentious Matters Act, which provides: “in cases where a shareholder petitions the court to determine the share repurchase price pursuant to the Company Act, the court shall, before rendering a ruling, examine the responsible person of the company and the petitioner shareholder,” and by the first part of Article 12, Paragraph 9 of the Business Mergers and Acquisitions Act, which states: “before rendering a ruling on the price, the court shall afford the petitioner and the opposing party an opportunity to present their opinions.”  The subjects and wording of these two provisions differ.  The former explicitly requires the court to “examine” the responsible person of the company, while the latter merely stipulates that both the company and the dissenting shareholder be given an “opportunity to present their opinions.” This gives rise to the question of whether it is necessary for the responsible person of the company to personally appear before the court for direct examination by the judge.  Some judicial decisions have held that this distinction reflects a deliberate legislative intention to impose different levels of procedural safeguards.  Accordingly, under Article 182, Paragraph 1 of the Non-Contentious Matters Act, the court is required to mandate that the responsible person of the company personally appear in court for examination.  This opinion adopts a restrictive interpretation of the law (see Civil Ruling by Taiwan Taipei District Court 108-Kang-Zi-392, affirmed by the Civil Ruling by Taiwan High Court 109-Fei-Kang-Zi-26).

However, with respect to the foregoing controversy, other judicial decisions—based on the legislative intent underlying Article 182, Paragraph 1 of the Non-Contentious Matters Act, have adopted a different view.  These decisions interpret the provision as enacted on the premise that, in proceedings concerning the repurchase of shares, the evidence relevant to determining a fair price typically lies predominantly with the company.  Accordingly, the legislative purpose of the provision is primarily to ensure that both the dissenting shareholder and the court are adequately informed.  It is therefore sufficient for the responsible person of the company to express the company's position either through a court-appointed representative appearing in court or by submitting written statements.  It is not deemed necessary for the responsible person to personally appear before the court for examination.  This interpretation reflects a more liberal and pragmatic approach (see the Civil Ruling by Taiwan High Court 110-Fei-Kang-Zi-123).

It is worth noting that although the Civil Ruling by Taiwan Taipei District Court 108-Kang-Zi-392 initially adopted a restrictive interpretation—requiring the company's responsible person to personally appear in court—and thereby revoked the original ruling, the same court upon remand ultimately upheld the more liberal view.  That is, it recognized that the responsible person of the company may appoint a representative to appear in court or submit a written statement on the company's behalf in lieu of personal appearance.  Although the shareholder subsequently filed an appeal against the ruling, the court rejected the appeal and maintained its prior view, which has since become final and binding (see Civil Ruling by Taiwan Taipei District Court 114-Kang-Zi-21).

In addition, where a public company initiates proceedings to repurchase the shares of dissenting shareholders, such cases fall within the jurisdiction of the Commercial Court pursuant to Article 2, Paragraph 3, Subparagraph 1 of the Commercial Case Adjudication Act.  The first part of Article 67, Paragraph 1 of the same act stipulates that: “before rendering a ruling, the court shall afford the petitioner and the opposing party an opportunity to present their opinions.”  As the statutory language only requires that both parties be afforded an opportunity to present their views, the Commercial Court has similarly adopted a liberal interpretation—allowing the responsible person of the company to appoint a representative to appear and make submissions on the company's behalf instead of personally appearing in court (see the Civil Ruling by Intellectual Property and Commercial Court 111-Shang-Fei-Zi-7, affirmed by the Civil Ruling by Supreme Court 112-Tai-Kang-Zi-888).

In view of the foregoing, regarding the legal issue of whether the responsible person of a company must personally appear before the court for examination in share repurchase proceedings, while certain earlier court decisions adopted a restrictive interpretation affirming such a requirement, more recent judicial practice has shown a trend toward a liberal interpretation—denying the necessity of personal appearance.  Whether this liberal approach has become a consistent judicial opinions remains to be seen.

(The article is originally in Chinese which can be found here.)