Government Agencies Required by Law to Participate in Arbitration in Government Procurement Cases

Under Taiwan's Government Procurement Law, a government agency cannot refuse to participate in a mediation initiated by the supplier (of goods or services regardless) for a dispute relating to contract performance. However, mediation does not always lead to successful resolution of the dispute because the parties to the mediation sometimes do not accept the proposed recommendation made by the mediators, and as a result, the mediation fails to produce a resolution. The proposed amendment to the Government Procurement Law would require a government agency not to refuse to participate in an arbitration initiated by the supplier if the mediation does not resolve the dispute. This would mean that even if there was no agreement in place betweeen the parties to have their dispute resolved by arbitration, the government agency would be obligated to participate in the arbitration initiated by the supplier and the award rendered by the arbitrators would be binding on the parties as if there was an effective agreement to arbitrate.