The recognition of Taiwan as a sovereign country could provoke an "international incident", the Employment Appeals Tribunal was warned yesterday.
The issue of Taiwan's status has been bitterly disputed since the island broke away from the People's Republic of China in 1949. Taiwan has not had representation at the UN since 1971.
There are only 25 states that have official diplomatic relations with Taiwan. However, most countries have unofficial representative offices.
A case taken by Stephen Shu Wai Tung against the Taipei Representative Office in Ireland was adjourned after both sides argued over whether the office constituted an embassy and was therefore subject to sovereign immunity.
Shu Wai Tung, a trade executive, is suing the office for constructive dismissal.
John Curran, representing Mr Shu Wai Tung, said the Department of Foreign Affairs operated a one China policy and did not recognise Taiwan as an independent country. He said that if the tribunal proceeded to recognise the Taipei Representative Office as an embassy it would become the subject of a judicial review.
He also stressed that the status of Taiwan was a sensitive issue for China and could provoke an international incident if the tribunal was to recognise sovereignty.
Frances Meenan, on behalf of the Taipei Representative Office, said the office had "all the hallmarks" of an embassy with an ambassador and a first secretary.
She suggested that a state did not have to be recognised internationally to have sovereign immunity.
She also argued that the office did not have the locus standi to be sued as it did not constitute a legal entity.
Peter O'Leary, the chairman of the tribunal, adjourned the case for four weeks to deal with the legal issues involved.
