Thailand has become one of Southeast Asia’s most dynamic economies, with its strategic location, robust manufacturing sector, and expanding trade agreements. As international and domestic trade activities grow, so do conflicts between business partners, suppliers, investors, and competitors. These conflicts, known as trade disputes, cover a wide spectrum of issues ranging from simple contractual disagreements to complex intellectual property (IP) and cross-border disputes.
Understanding the types of trade disputes in Thailand is critical for local and foreign businesses, as it allows them to prepare appropriate strategies for risk management and Thailand dispute resolution. This article explores the main categories of trade disputes under Thai law, their common causes, and the mechanisms available for handling them.
Contractual disputes are among the most frequent in Thailand’s trade sector. They occur when one party fails to fulfill obligations under a business agreement, whether written or oral. Common causes include:
Late or non-delivery of goods.
Delivery of defective or substandard products.
Disputes over warranty, after-sales service, or guarantees.
Breach of distribution, agency, or licensing contracts.
A Thai exporter may fail to meet shipment deadlines to a foreign buyer, leading to claims for damages.
Such disputes are usually resolved through negotiation, mediation, or litigation in the Central Intellectual Property and International Trade Court (IP&IT Court), which specializes in trade disputes.
These disputes arise when businesses fail to meet financial commitments. They are particularly common in industries reliant on credit terms and international trade finance. Typical issues include:
Non-payment or late payment of invoices.
Disagreements over letters of credit.
Dishonored checks, promissory notes, or guarantees.
Disputes over financing or factoring agreements.
A Thai importer may dispute payment obligations under a letter of credit issued by a local bank for foreign suppliers.
Payment-related disputes often escalate to court litigation, though mediation or arbitration is also used.
With Thailand’s strong manufacturing, creative, and consumer product markets, IP-related disputes are common. These involve conflicts over rights to trademarks, patents, copyrights, and trade secrets. Issues often include:
Trademark infringement and counterfeit goods.
Unauthorized use of patented technology.
Copyright piracy in digital media and entertainment.
Misappropriation of trade secrets by employees or competitors.
A multinational may sue a local manufacturer for producing counterfeit branded goods and exporting them abroad.
IP disputes fall under the jurisdiction of the IP&IT Court, and enforcement mechanisms are supported by the Department of Intellectual Property (DIP). Criminal penalties may also apply for counterfeiting.
Unfair competition disputes occur when businesses engage in practices that distort fair competition or harm consumer choice. The Trade Competition Act B.E. 2560 (2017) regulates these activities. Common disputes include:
Price dumping and predatory pricing.
Abuse of market dominance.
Collusion, cartels, or bid-rigging.
Misleading advertising and unfair trade descriptions.
A large retail chain may be accused of selling products below cost to drive smaller competitors out of business.
The Office of Trade Competition Commission (OTCC) investigates and decides on such cases. Businesses may also file complaints in court.
Thailand’s participation in ASEAN, WTO, and numerous bilateral trade agreements means disputes often extend beyond domestic borders. Causes include:
Breach of international sales contracts.
Conflicts over customs duties, tariffs, or non-tariff barriers.
Transportation and logistics disputes (maritime, air, or land).
Disagreements over rules of origin in preferential trade agreements.
A Thai agricultural exporter may face barriers in a foreign market despite ASEAN free trade commitments, leading to disputes under ASEAN dispute mechanisms.
Such disputes may be handled at the IP&IT Court, through arbitration, or under international frameworks such as WTO dispute settlement.
Foreign investment in Thailand often involves joint ventures with local partners. Disputes arise from conflicting interests or governance issues, including:
Profit-sharing disagreements.
Breach of shareholder agreements.
Conflicts over management control.
Exit strategy disputes.
A foreign company may claim unfair exclusion from a joint venture after contributing capital and expertise.
These disputes are typically resolved through arbitration (often stipulated in contracts) or litigation under Thai company and contract law.
Thailand’s Consumer Protection Act provides a legal framework to protect buyers of goods and services. Trade disputes involving consumers often relate to:
Sale of defective or harmful products.
False or misleading product labeling.
Unfair contract terms imposed on consumers.
A consumer group may bring claims against a company for selling unsafe food products.
The Office of the Consumer Protection Board (OCPB) handles consumer complaints, while courts provide remedies such as compensation.
With rapid growth in digital trade, disputes now frequently involve online transactions. These may include:
Failure to deliver goods purchased online.
Misrepresentation of products on e-commerce platforms.
Disputes over digital payment systems.
Breach of data protection and privacy in online transactions.
An online buyer may not receive goods after payment, or may receive counterfeit products.
E-commerce disputes can be handled through consumer protection mechanisms, arbitration, or litigation, depending on the scale of the issue.
Thailand’s role as a regional logistics hub makes supply chain disputes common, particularly in shipping and transportation. Common issues include:
Loss or damage of goods in transit.
Disputes over freight charges.
Breach of logistics or warehouse agreements.
A logistics company may be sued by a manufacturer for damage to goods during international shipping.
These cases are often litigated in the IP&IT Court under international maritime or commercial law.
Contract Clarity – Businesses should draft detailed contracts with governing law, jurisdiction, and dispute resolution clauses.
Use of Arbitration – Arbitration is highly recommended for cross-border trade disputes due to neutrality and enforceability.
Early Settlement – Thai culture values compromise; businesses should attempt negotiation or mediation before litigation.
Regulatory Awareness – Companies must be aware of laws enforced by OTCC, DIP, and OCPB to avoid disputes.
IP Protection – Foreign businesses should register trademarks and patents in Thailand early to prevent infringement.
Trade disputes in Thailand take many forms, reflecting the diversity and complexity of the country’s economy. From contractual disagreements and payment issues to intellectual property infringement, unfair competition, and cross-border conflicts, businesses must navigate a wide range of potential risks.
Thailand offers multiple dispute resolution mechanisms, including negotiation, mediation, arbitration, specialized courts, and regulatory oversight. However, the best strategy lies in prevention: clear contracts, cultural sensitivity, and proactive legal compliance.
As Thailand continues to grow as a trade hub in ASEAN and the global economy, the effective management of these diverse types of trade disputes will remain essential for fostering business confidence, stability, and sustainable growth.
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