February 20, 2024

Dispute Resolution in Thailand

Dispute Resolution in Thailand encompasses methods intended to settle disputes outside of the traditional judicial system. It is a significant tool for foreign companies doing business in Thailand as it reduces the need to resort to litigation before Thai courts.

The Alternative Dispute Resolution Office of the Thai Mediation Center is responsible for coordinating and conducting both court-annexed mediation and offering legal advice on mediation and conciliation to the public. It also develops systems and methods for mediation.

Arbitration

Arbitration is a well-established option for dispute resolution in Thailand. It is resorted to when both parties agree or where the dispute resolution clause in a concluded contract stipulates arbitration proceedings. Arbitration is generally a much faster process than litigation.

In addition to this, arbitration is a more cost-effective approach to resolving disputes. Moreover, unlike court judgments, arbitration awards are binding on both parties.

THAC has been actively promoting arbitration in the country and positioning itself as an international arbitration centre. It has also lobbied for changes in laws to make the country more arbitration-friendly.

Furthermore, it is a signatory to the New York Convention, which enables foreign arbitral awards to be enforced in its territory, subject to certain reservations. Finally, it is worth mentioning that Thai courts generally favour a conciliatory and good faith effort of parties to resolve their dispute prior to resorting to judicial intervention. This is evidenced in the fact that courts of first instance regularly order the parties to mediate their case.

Conciliation

The law in Thailand requires that parties to a dispute attempt to settle their matter through conciliation. The process is less formal than a trial and typically involves a meeting with the person who manages the conciliation, called a conciliator. The conciliator is a person with professional expertise in the subject matter of the dispute.

Conflicts can arise due to a variety of reasons, including differences in backgrounds and priorities. Dispute resolution mechanisms must be carefully selected to address each of these complexities and to avoid legal challenges.

Conciliation can be requested by the complainant or respondent or at the judge’s discretion in cases involving several claims. However, it is important to understand that conciliation is not the same as mediation and does not result in a judgment of any kind. The conciliator will only help the parties to discuss their problems and try to find an acceptable solution.

Negotiation

Negotiation is a widely used dispute resolution option in Thailand, featured in most standard arbitration clauses. It is usually a more flexible and cost-effective solution than litigation.

Contractual disputes may arise over a variety of issues, including the interpretation of an agreement, alleged breaches of contractual terms and the scope of work. Often these contracts contain complex and multifaceted provisions, which can make it difficult for parties to settle a dispute without legal intervention.

Labour disputes can involve a wide range of issues, from the terms and conditions of employment to salary, overtime payment and relocation of workplaces. Employers with international operations are exposed to further complexities as they must deal with foreign employment laws and cultural considerations. The Thai Arbitration Institute has a panel of arbitrators which is available to resolve these disputes. Alternatively, disputing parties can designate their own arbitrator or choose a mediator from the institute. The tribunal can consist of one or three arbitrators.

Litigation

The courts are an alternative dispute resolution option in Thailand, but they can take a long time and be costly. In addition, they can result in unsatisfactory results. Litigation can also have a negative impact on business reputation.

Most disputes in the construction and real estate sector contain an arbitration clause, but a dispute can still arise for many reasons such as omissions or errors in a contract document; technical issues; unexpected site conditions; disagreement with a contractor or sub-contractor; etc.

Arbitration is an out-of-court dispute resolution mechanism that uses a neutral third party to settle the dispute. It is generally held in a private setting and the information, evidences, statements, and arguments can be kept confidential. This can be a useful approach for renowned public figures or businesses that want to maintain their good reputation. Also, a judgment issued by an arbitrator can be enforced in Thailand without having to file a separate lawsuit.

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