February 20, 2024

Trade Disputes in Thailand

While many cross-border agreements name New York, London or Singapore as the litigation setting, direct enforcement of foreign judgments is impossible in Thailand.

Thailand has a strong tradition of arbitration and is establishing itself as a global centre for international dispute resolution. This article will explore the various approaches available to settle trade disputes in the Kingdom.

Alternative Dispute Resolution

In Thailand, as in most other jurisdictions, a number of out-of-court dispute resolution options exist. These include mediation and arbitration.

In mediation, a neutral third party facilitates communication between the parties and helps them reach a voluntary settlement of their dispute. Some mediators are purely facilitative, engaging primarily in shuttle diplomacy and keeping their own views hidden from the parties, while others are more evaluative, offering their own knowledge and opinions to guide parties toward agreement. The most skilled mediators often blend the two techniques according to the situation and the parties.

Arbitration is a more formal dispute resolution process in which a neutral third party hears the evidence presented by each side of a trade dispute and renders a binding decision. In Thailand, arbitration is governed by the Arbitration Act B.E. 2545 (2002), which is based on the UNCITRAL model law on international commercial arbitration. However, unlike the case of courts in common law countries, Thai tribunals are not able to grant interim relief such as injunctions during the course of an arbitration.

Conciliation

The complainant and the respondent are usually the main people who participate in conciliation. If the participant is a company or organisation, it may be helpful for someone with authority to make decisions to attend as well. Participants are welcome to bring lawyers or other advocates with them but they need to discuss this with the conciliator before the day of the conciliation conference and get their permission.

Conciliation sessions are normally held face to face but can be held by telephone in some circumstances. The conciliator acts as a messenger, talking to each person in turn and communicating ideas or proposals between them.

Unlike court proceedings, conciliation is not conducted in a public setting and all information, evidences and statements can be kept confidential. This can be beneficial for a business that wishes to maintain its good reputation.

Arbitration

Although Thailand is not a particularly litigious society, the legal system does contain mechanisms that are designed to encourage conciliation in certain types of disputes. In particular, the Civil Procedure Code (CPC) provides that courts can initiate a conciliation process at any stage in the course of a case.

In addition, Thai law makes provision for out-of-court arbitration under the Arbitration Act B.E. 2545 (2002), which is an extensive redrafting of the UNCITRAL Model Law on International Commercial Arbitration and contains all of its core principles with certain Thai specific additions. Under this regime, arbitration awards can only be appealed in a limited number of circumstances.

Both the claimant and respondent are allowed to make opening statements and present evidence in a manner similar to a trial. Witnesses are sworn in before they testify, and the other parties can cross-examine witnesses. However, it is important to note that the arbitrators are responsible for determining what evidence should be considered.

Judicial Settlement

As an alternative to litigation, judicial settlement is an in-house dispute resolution option within the Thai courts. This is usually a private setting and it may involve a judge, lawyer, or representative of the court. All information, evidences and statements brought up in the process can be kept confidential. This is beneficial to renowned businesses and individuals as it helps maintain their reputation and preserve their good name.

Alternatively, the parties can choose to participate in electronic hearings which can be conducted from anywhere in the world. However, participants must have a stable and reliable internet connection for the proceedings to take place. This is an option that can reduce costs as hearings do not require traveling to the country where the trial takes place. At the court’s discretion or the parties’ request, hearings in civil cases can be split into separate trials to avoid long trial periods. However, such bifurcation remains a rare practice in Thailand as the court is likely to be constrained by the provisions of the CPC and Thailand’s rules on arbitration.

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