Navigating trade disputes in Thailand requires an understanding of both Thai business customs and international legal standards. Maintaining thorough documentation, including clear dispute resolution clauses in contracts, can reduce conflict and facilitate a favorable resolution.
Arbitration is a faster and less expensive route to a resolution than litigation. Moreover, an arbitration award is binding and enforceable both in Thailand and internationally.
Commercial disputes are a reality for most businesses and the legal system provides mechanisms to resolve them. However, the complexities of Thailand’s legal framework and cultural context can complicate the process of navigating commercial Thailand dispute resolution. Having an attorney experienced in Thai commercial law can help ensure that your business interests are protected throughout the process.
In addition, Thai courts have several provisions requiring judicial impartiality and independence during the trial of a case. For example, a judge may be challenged if they have a vested interest in the outcome of the trial or if they have a close relationship with any parties involved in the case.
The court process begins when a plaintiff files a complaint. Depending on the type of dispute, courts may require parties to participate in mediation before hearings are held to determine the issues. Witness hearings are then scheduled and, after the evidence is presented, a judgment hearing date is set.
While Thai courts have traditionally been conservative in their approach to arbitration, they are now generally open to the procedure and recognise and enforce foreign awards. In addition, the court system is improving efficiency by implementing online platforms for filing pleadings and submitting documents to court.
The dispute resolution process in Thailand involves a wide variety of alternatives to litigation, and the expertise and experience of law firms like PDLegal are essential assets for businesses seeking favourable outcomes that align with their business objectives. While arbitration remains a common tool for resolving disputes in the country, challenges remain that need to be addressed in order to improve efficiency and ensure the enforceable enforcement of arbitral awards.
First, the chairperson of the tribunal calls the hearing to order and invites each party and witness into the room. Each side may then present a statement of their case to the tribunal. The tribunal will then examine witnesses, who can be fact or expert witnesses.
Unlike some jurisdictions, where parties must agree on the composition of an arbitral tribunal, under the 2017 Rules, both disputing parties can choose a one or three-arbitrator panel. In addition, if the parties are not able to reach an agreement on an arbitrator, both will be given a list of potential arbitrators and then have fifteen days to remove the names they do not prefer.
In Thailand, class action lawsuits are relatively new. These lawsuits require that a lawyer or legal association with the capability, strength and knowledge to represent a class of persons initiates a litigation to protect their interests in the courts. It is not clear whether Thai private attorneys have the knowledge and experience to manage class action cases.
In most cases, once a complaint is filed with the court, the case will be scheduled for hearings. These hearings include identifying issues in dispute based on written submissions and scheduling trial or witness hearing dates. In complex civil cases, the court may also consider a petition for interim relief and schedule an emergency hearing to examine certain matters.
During the trial proceedings, both parties can ask witnesses to testify and present evidence to support their arguments. After examining the evidence, the court will decide on its verdict and issue the judgment. Generally, the losing party will be required to pay the winning party’s costs of litigation including attorney’s fees. However, in practice, the amount of attorney’s fees awarded is minimal and does not cover actual costs incurred.
Thailand has ratified the New York Convention, and arbitral awards issued in other countries that are parties to it are enforceable in Thailand. However, the courts have discretion in reviewing an award during the enforcement stage. Typically, they review the merits of the case to determine whether there are grounds to challenge the award.
Successful parties can recover interest and legal costs without significant restrictions. However, courts generally take a conservative stance on cost recovery to reflect amounts more fitting to the local context.
In January 2017, a much-awaited set of arbitration rules came into effect in Thailand. The new rules aim to improve the efficiency and consistency of arbitration administered by the TAI.
The TAI’s rules also include provisions on the independence and impartiality of arbitrators. These require an arbitrator to disclose any circumstances that might lead to justifiable doubts about their impartiality or independence, and to promptly disclose those to all parties. These measures will help to ensure that the TAI’s decisions are consistent with international standards. The TAI has also been active in fostering co-operative relationships and entering into Memorandum of Understandings with international arbitration institutions.
Unlike arbitration, where disputing parties choose a neutral arbitrator who hears the dispute and renders a binding judgment, mediation involves the assistance of an unbiased mediator to help the parties reach an acceptable solution. As a result, it is normally quicker and cheaper than a full-blown trial.
In Thailand, court-annexed mediation – conducted while the case is still pending in court – has been increasingly used to settle disputes and reduce the backlog of judicial cases. It is also becoming popular in the context of resolving smaller claims, as it can often be more cost effective than litigating such claims in a traditional lawsuit.
In addition, conciliation is another alternative dispute resolution method available to the public and private sectors in Thailand. Similar to mediation, conciliation involves the selection of an unbiased conciliator who helps the disputing parties to find a mutually-acceptable compromise agreement that is legally binding. Like mediation, conciliation proceedings are usually kept confidential and cannot be disclosed to third parties or used in any court proceeding. In some cases, the courts require that plaintiffs and defendants attend mandatory conciliation before the first hearing date in labour disputes and general civil cases.