Relevant Legal Provisions

Facts and Reasons

In this case, the plaintiff and defendant entered into a debt assignment agreement (hereinafter referred to as the "Disputed Agreement"). Under the agreement, the defendant sold a debt claim derived from a prior "Letter of Commitment" between the defendant and a third party (hereinafter referred to as the "Disputed Debt"). The plaintiff intended to offset a debt it owed to the third party using the Disputed Debt. However, in a separate judgment, the court determined that the defendant did not possess any valid claim against the third party. Consequently, the plaintiff could not exercise the offset against the third party, rendering the Disputed Debt void.

Judgment

The plaintiff asserted that the parties entered into the Disputed Agreement, the defendant sold the Disputed Debt, originating from the "Letter of Commitment" dated July 11, 2017, to the plaintiff. The agreement explicitly stipulated, in Clause 5, that the defendant warranted the validity of the Disputed Debt. In the event that the claim was proven false or defective, thus preventing the plaintiff from exercising offset against the third party, the defendant agreed to unconditionally return the funds received.

The plaintiff demonstrated having paid the defendant NT$8.88 million under the Disputed Agreement, substantiated by presenting the agreement itself, which the defendant did not contest. The authenticity of the agreement and its terms was therefore deemed credible.

Given the conclusive evidence, the court accepted the plaintiff’s claim that the defendant lacked any valid claim against the third party, which nullified the plaintiff’s ability to assert an offset. Accordingly, pursuant to Clause 5 of the Disputed Agreement, the plaintiff's request for the return of NT$8.88 million from the defendant was justified and warranted approval.

Attorneys：Vincent Huang、Kevin Yu、Webber Huang