Trade Disputes in Thailand

The vibrant tapestry of Thai trade can unravel at the seams when commercial conflicts flare up. With implications that can affect the entire global trading community, understanding these disputes is crucial for businesses and policymakers alike.

Costly legal fees, language barriers and power imbalances can all be obstacles in resolving a trade dispute in Thailand. In addition, litigation can be a lengthy process.

Alternative Dispute Resolution

As a result of its relatively non-litigious culture, Thailand prefers to settle disputes out-of-court. However, such disputes can take more than a year on average to be resolved by arbitration. The arbitration process in Thailand is regulated and overseen by the Thai Arbitration Institute, the Alternative Dispute Resolution Office, and the Ministry of Justice. However, despite its regulations, ad hoc arbitration is not always effective and can lead to unsatisfactory outcomes.

Arbitration is a dispute resolution method that involves a neutral arbitrator settling the dispute between disputing parties. It is often faster than trying to obtain a final judgment in court, which can be intimidating and risky. In addition, it allows the disputing parties to return some control over the dispute settlement process to themselves. This is especially useful in the case of international trade disputes where general principles of law and international trade customs may apply to the case. It is also more cost-effective than bringing a case before a local state court.

Arbitration

Arbitration is one of the most popular means of resolving trade disputes in Thailand. It provides a more efficient and cost-effective alternative to court litigation. Arbitration is also a great choice for international traders as it is widely accepted by courts around the world.

Generally, arbitration proceedings aim to be expedited. Arbitrators are usually required to consider your case based on written submissions and supporting evidence. However, it is not uncommon for your case to be referred for further enquiries before you receive a final award.

The governing body of the arbitration institute will select your arbitrator from a list of potential arbitrators. The arbitrators are usually required to have the necessary expertise and professional experience in the relevant fields of law.

The prevailing party in an arbitration proceeding may be awarded lawyers’ fees. However, these fees are unlikely to be fully recoverable as the Thai legal system does not view lawyers’ fees as damages resulting directly from the breach of contract.

Conciliation

While litigation is still common in some sectors such as the energy, mining and infrastructure industries of Thailand, alternative methods of dispute resolution are increasingly being used. Conciliation is one of these options.

Conciliation can be requested by any party in a trade dispute at any time during proceedings. A judge can also refer a case to conciliation at any stage of a trial.

At a conciliation conference the person who manages the conciliation (the conciliator) will not decide who is right or wrong and will not impose any solution on parties. The purpose of a conciliation conference is to help complainants and respondents discuss their concerns with each other and try to reach an agreement that both sides can live with.

As with arbitration, the outcome of a conciliation conference will be documented in a compromise agreement. This can be legally enforced in the same way as a court’s order. It is important that the complainant and respondent consider carefully what terms they are willing to accept before participating in a conciliation conference.

Courts

In Thailand, courts can resolve trade disputes. Parties may choose a specific arbitration institute, rules, and arbitrator for the case, allowing the parties to tailor how their dispute is resolved. The cost of court litigation can be high compared to arbitration, however.

Plaintiffs must carefully assess the nature and extent of a defendant’s assets in Thailand and abroad as a monetary judgment is of limited value if the defendant has little or no recoverable assets. In addition, courts can impose conditions and restrictions on the use of funds or assets received as compensation for a trade dispute.

In a civil case, Thai law adopts the doctrine of actor sequitur forum rei which requires claimants to file lawsuits in the courts where the cause of action arose or where the defendant is domiciled. However, specialized courts such as the Central Labor Court and the Intellectual Property and International Trade Court have a national jurisdiction. A decision of such specialized courts can be appealed directly to the Supreme Court in some cases.

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