Trade Disputes are an inevitable part of doing business, and understanding the legal framework, types of disputes and resolution mechanisms is essential. By incorporating clear Thailand dispute resolution clauses in contracts, and maintaining thorough documentation, businesses can minimize the impact of a dispute on their operations in Thailand.
Litigation is the last resort and usually the most time consuming method of settling trade disputes in Thailand. Court judgments are only enforceable outside of Thailand when they comply with international conventions, treaties or agreements to which Thailand is a party.
Arbitration
In the world of business, disagreements and conflicts are a natural part of operations. However, when these disagreements are related to a commercial transaction, they can become a major roadblock and jeopardize progress toward success. These types of disagreements are commonly classified as commercial disputes and can take many forms, including debt collection, intellectual property disputes, shareholder disputes, and consumer disputes.
Arbitration is a process that involves a neutral third party hearing and deciding a dispute, much like a trial. Parties select an arbitrator or panel of arbitrators to hear their case and review evidence, listen to arguments, and make a binding decision known as an arbitral award. The main advantage of arbitration is that it is typically faster and less expensive than litigation, which can take months or years to resolve. Additionally, awards from arbitration are generally enforceable in courts around the world.
In Thailand, out-of-court arbitration is governed by the Arbitration Act of 2002, which contains key principles in conjunction with Thai-specific additions. The Act also stipulates that parties may agree to have an arbitration agreement either in their contracts or separately drafted. In January 2017, a new set of rules for arbitration came into effect that substantially changed how arbitration in Thailand is administered, particularly with regard to the power to grant interim measures.
Conciliation
Often, trade disputes can be settled through conciliation. The process is quick and efficient, and can save parties time and money. It can also prevent unnecessary delays in litigation, a common problem in the Thai judicial system. However, it is not a substitute for legal action.
Conciliation is a dispute resolution method that involves the participation of an impartial third party. Its purpose is to find a solution that is acceptable to all parties. A conciliation agreement is binding and can be enforced in court. It is a quicker and more cost-effective alternative to litigation, which can take years to reach a resolution.
While pursuing litigation is a legitimate option, it’s important to consider alternative methods of dispute resolution. The judicial system is already overburdened with cases, and it can take months or even years for disputes to be resolved. This disproportionate case load can cause major problems for both businesses and the judicial system.
In addition to the time and expense involved in litigation, a trade dispute can result in substantial damage to a company’s reputation and image. In this situation, it is essential to have a team of experienced lawyers to ensure your interests are protected. Choosing the right law firm can ensure that you are on the right track to resolving your trade dispute.
Litigation
Although Thailand is known to be a “non-litigious” country, the influx of foreign transactions in recent years has swung its judicial system into action. Litigation involves the formal process of filing a case and presenting evidence to a judge or jury to decide on the issue. It is the most serious way to resolve a legal dispute.
Litigation is a time-consuming and costly process. It also disrupts business relationships and often results in the need for additional resources to settle a case. While many companies try to avoid litigation, it is important to understand the nature of the Thai legal system, including its court procedures, to make sound business decisions.
A lawsuit starts with a petition filed by the plaintiff and service of summons on the defendant. The plaintiff is required to present sufficient evidence to prove the case to a judge or jury. The judge or jury will then render a decision on the issues and will award the judgment. The judgment may include compensation, orders or other relief based on the evidence presented by the parties.
The court has the power to compel witnesses to testify and award costs and expenses incurred by the parties in bringing the case to trial. However, substantial legal fees are rare and largely dependent on the complexity of the case, time spent and work performed by the lawyers.
Mediation
In Thailand, mediation is becoming increasingly popular due to its lower cost and more expedient resolution of disputes. It also helps preserve business and personal relationships that would otherwise be destroyed through years of litigation. The mediation process is normally confidential, and the parties can enter into an enforceable compromise agreement that settles the dispute.
In the case of court-annexed mediation, the process takes place while the case is pending in court. Judges may ask the parties to mediate or appoint a conciliator with the aim of expediting the resolution of the case.
The main benefit of mediation is that it allows disputing parties to work out a solution that will meet their interests. The resulting settlement will usually be more satisfactory than the damages awarded by a court and it is binding on both parties. This is particularly helpful for resolving smaller claims, as the costs of litigating a small claim can be significantly higher than the amount of damages awarded.
However, it is not always possible for a dispute to be resolved through mediation. In such cases, it is important for both parties to have a reliable Thailand conciliation and mediation law firm by their side. This will ensure that they are able to take advantage of all the opportunities available for settlements. The legal counsel provided by these firms will also help the disputing parties in negotiating with each other.