Trade Disputes in Thailand

Commercial disputes are a frequent subject of litigation before Thai courts. However, there are alternatives to litigation.

For example, arbitration and conciliation are common methods of dispute resolution. This article will explore these options. We will also look at the legal framework surrounding these dispute resolution mechanisms. We will end the article by discussing the role of private-sector representatives in these procedures.

Alternative Dispute Resolution

ADR involves measures to settle disputes outside the classical judicial system, including arbitration and conciliation. ADR in Thailand is enforced through special legislation, including the Arbitration Act B.E. 2530 (1987), the Ministry of Justice Arbitration Rules of Arbitration Institute, and the Court of Justice Regulations Pertaining to Mediation of Financial Dispute of B.E. 2544 (2001).

Conciliation is now practised by courts of justice throughout the country, even at the appellate level, with encouraging figures of success. Moreover, conciliation is a mandatory procedure prior to trial in cases involving labour law, and also in the Central Intellectual Property and International Trade Court.

The enforceability of an award from a domestic arbitration is similar to that of a final judgment of the court, which can be enforced by application for a writ of execution. However, whether the award will result in lower costs than litigation is a matter of debate. In addition, the awards must satisfy the provisions of the relevant conventions to be enforced.

Arbitration

Unlike conventional litigation where a decision is made by a judge in a hostile and antagonistic environment, arbitration is a more friendly and collaborative process with an arbitrator or panel of arbitrators selected based on their expertise. It can also be a quicker and less costly process, and decisions are binding on the parties.

On average, disputes take a year to be resolved through the arbitration process. Despite this, it is still a more streamlined process than going through court proceedings and it can be an effective tool in resolving complex issues.

The firm has a strong international arbitration practice, representing both private and state-owned enterprises. Counting multinational corporations and government agencies among its clients, the team of lawyers handles commercial arbitration matters and disputes arising from trade. It is well versed in the ICC and SIAC rules, as well as local arbitration legislation and procedures. Its litigators are able to assist with all aspects of dispute resolution, from drafting arbitration agreements and representation before courts, to enforcement and challenging awards.

Courts

In cases where a settlement can not be reached, a judge may facilitate the mediation of the case. The court can also appoint a reconciler from outside the court or convene closed door sessions with all parties to try and bring about reconciliation.

The courts in Thailand are structured into three levels: the Court of First Instance, the Court of Appeal and the Dika Court (Thailand’s Supreme Court). Appeals against a judgment of the Court of First Instance can be filed with the Court of Appeal or the Dika Court subject to certain restrictions.

Watson Farley & Williams has a full-service disputes offering in Thailand which covers both litigation and arbitration. The team includes lawyers who are experienced in handling international arbitration proceedings under ICC and SIAC rules, including those involving the resolution of trade disputes. Its clients include a combination of large Thai corporates and global conglomerates, such as PTT, Department of Mineral Fuels and Jetion Solar.

Mediation

Mediation is a possible alternative dispute resolution option in Thailand. It is a collaborative process in which the parties work together with a neutral mediator to settle their differences. The process is usually faster and less expensive than litigation.

It is also a good choice for international companies because it can be conducted in a private setting and keep sensitive information confidential. However, a mediation proceeding has to follow strict juridical procedures.

A new law on out-of-court mediation was passed in 2019, which provides for a comprehensive procedure of mediation. This law is based on the UNCITRAL Model Law on International Commercial Arbitration.

Although mediation is still not as common in Thailand as it is in Western countries, it is gaining momentum as a cost-effective alternative to litigation. However, it can be difficult to find a suitable mediator. In addition, it is often challenging to obtain a binding result in mediation proceedings. Therefore, it is best to choose an arbitration lawyer in Thailand that specializes in the specific area of your dispute.

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