Alternative Dispute Resolution (ADR) in Thailand
What is the legal basis of Arbitration in Thailand?
The legal basis of out of court arbitration in Thailand is the Arbitration Act of 2002. The far less common practice of in court arbitration is governed by provisions of the Thai Civil Procedure Code.
The Act contains a comprehensive set of provisions that govern the procedural elements of arbitration and the enforcement of arbitration awards. Both domestic and international arbitration are subject to the same rules and the Act provides for the recognition and enforcement of foreign awards under the terms of the Geneva Convention on the Execution of Foreign Awards 1927 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.
I am a foreign claimant or defendant and have a legal dispute in Thailand. What are the advantages of Arbitration over traditional court proceedings?
The most obvious advantage for a foreign claimant or defendant over traditional court proceedings in Thailand is that the parties may agree for the proceedings to be conducted in English or another mutually acceptable language. All traditional Thai court proceedings are conducted in the Thai language, and parties are required to submit all documents in Thai as well as give evidence in Thai (usually through an interpreter). Foreign litigants and defendants often find the litigation process in Thai courts to be onerous, confusing, lengthy and opaque. Referring a claim for arbitration can mitigate these factors as well as simplify the process.
Are there any costs advantages to Arbitration over traditional court proceedings?
This is dependent on the context, but generally there can be costs advantages to arbitration. Firstly, although costs follow the event in Thai law (the loser pays the winner’s costs), Thai courts will usually only make nominal costs awards, and often only a fraction of the actual costs will be recovered. It is our experience that arbitrators often make costs awards that are more commensurate with actual costs. Secondly, and due in no small part to this lack of adverse costs orders, claims in Thai courts are often appealed to the full extent possible, leading to further additional costs. Arbitration awards cannot be appealed except in a very narrow range of circumstances.
How do I refer a dispute for Arbitration?
In order to refer a dispute in Thailand, there must be a binding agreement in writing between the parties to refer any dispute to arbitration. Such agreements are commonly found as clauses in commercial contracts, though, in the absence of such a provision, parties to a dispute may agree at any point to resolve a dispute by means of arbitration. Arbitration clauses in agreements should be properly drafted in order to be enforceable.
Please contact us if you would like an agreement drafted that contains an arbitration provision, or if you need a stand-alone written agreement to arbitrate a dispute.
Where in Thailand are Arbitration disputes usually filed?
Common institutional venues in Thailand are the Alternative Dispute Resolution Office of the Office of the Judiciary and the Thai Board of Trade. Arbitration can also be conducted on an ad-hoc basis using common rules such as the International Chamber of Commerce rules or the UNCITRAL Arbitration Rules.
Which jurisdiction’s law is applied in Arbitration Proceedings conducted in Thailand?
The dispute will be adjudicated in accordance with the rules of law chosen by the parties to the dispute. In the absence of a clear indication of the governing law, Thai law will be applied.
I am a claimant involved in a dispute with a binding Arbitration provision. Can I file in the Thai court instead of submitting to Arbitration?
It is possible to file the claim in the Thai court, but if the opposing party files evidence of the existence of a binding arbitration agreement, the court will almost certainly strike out the claim.
Are interim remedies available during the Arbitration Proceedings?
Interim remedies are available, but the application for relief must be made to the Thai court before or during the arbitral proceedings. It should be noted that in practice remedies are uncommon and can be difficult to obtain, particularly with regard to without notice injunctions or temporary seizure or attachment orders. The same applies for orders of Summary Judgment.
Orders for security for costs are more common and will usually be granted in practice if a claimant is not domiciled in or does not carry on business in Thailand or there is good reason to suspect that the claimant will seek to evade payment of costs in the event of losing the claim.
How do I enforce an Arbitration Award?
Arbitration awards are binding on the parties and in the event the losing party fails to comply with its provisions, the party seeking enforcement would apply to the Thai court within 3 years of issuance of the award for an appropriate order. Following this, the mechanism for enforcement is the same as enforcing a court judgment: a Writ of Execution which will generally order the seizure and sale of the debtor’s property and assets and attachment of the debtor’s rights of claim against third parties.
How do I enforce a foreign Arbitration Award?
Foreign awards are enforced in the same way as awards granted within Thailand. The award however must satisfy the relevant conditions of the Geneva Convention on the Execution of Foreign Awards 1927 and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.
How can your firm help me with an Arbitration claim?
Our dispute resolution practice has the benefit of years of practical experience in dealing with Arbitration claims, institutions and arbitrators. We are experts in the conduct of such claims and can guide you through the entire process from initial advice on the issuance of a potential claim, its successful prosecution and eventual enforcement of an award. If you are facing an Arbitration claim, we can ensure you have the best chance of a successful defence.
Please contact us for further advice.