In a business environment that relies on contracts, effective dispute resolution is vital. This ensures that terms are enforced and that contractual obligations are fulfilled, strengthening confidence in investment.
Civil courts in Thailand can order court annexed mediation in a matter, with the parties’ consent. In addition, out of court mediation is becoming increasingly popular.
Alternative Dispute Resolution (ADR)
ADR encompasses methods used to settle disputes outside the classical judicial system. ADR techniques include mediation, arbitration and conciliation. ADR offers a more cost-effective and private alternative to litigation, which involves a formal process that can take longer.
Mediation involves a neutral mediator who collaborates with the disputing parties to help them reach a mutually acceptable solution. This settlement will be recorded in an enforceable agreement under Thai law. The Thailand Mediation Center is responsible for conducting mediation proceedings in the country.
Arbitration involves a neutral arbitrator who hears and renders a decision in the case. The procedure is regulated by the Arbitration Act B.E. 2545 (2002), which is based on the UNCITRAL Model Law on International Commercial Arbitration with some additions specific to Thailand. The Arbitration Act provides a strong legal framework for out-of-court arbitration in the country.
The effectiveness of ADR is boosted by the government’s focus on positioning Thailand as an international ADR hub, and ongoing improvements in ADR infrastructure and procedures. Further, Thailand’s culture emphasizes harmony and face-saving, making it more compatible with mediation and other ADR processes. This is also a strong selling point to Asian markets, where businesses seek reliable and efficient ADR options. However, litigation remains essential in cases requiring precedent decisions or complex legal interpretations that are difficult to resolve through alternative procedures.
Conciliation
The conciliation process is a way of solving disputes without going to court. It involves a neutral person, called a conciliator, helping the conflicting parties come to an agreement. The conciliation process can be conducted in person, via telephone or online. During the conciliation proceedings, the mediator will listen to the complainant and the respondent. He or she will ask questions to help them understand each other’s point of view. The conciliator will also suggest ways to resolve the dispute.
Although litigation remains a common method of disputing in Thailand, the legal landscape is increasingly enabling alternative methods. These options are often less expensive and time consuming than traditional litigation and provide more flexibility. This type of resolution suits the Thai culture’s emphasis on harmony and conflict avoidance.
Alternative Dispute Resolution in Thailand is a growing practice for both domestic and international companies operating in the country. The Bangkok-based law firm Chandler Mori Hamada has a robust disputes practice, handling arbitration and mediation cases on behalf of Thai and international corporate clients. The firm has a team of highly experienced lawyers who are well-versed in alternative dispute resolution in Thailand. Their expertise includes contract disputes, labour law, intellectual property, and fraud claims. Moreover, the firm has extensive experience in international arbitration and mediation in Asia.
Arbitration
Arbitration is a mechanism for resolving disputes that avoids resorting to the courts. Arbitration can be used to resolve a variety of civil disputes, such as commercial, joint venture, and shareholder conflicts; construction and infrastructure projects; intellectual property matters; and investment issues. The arbitration process involves a submission of evidence, witness testimonies, and legal arguments. The resulting arbitral award is binding and enforceable under the New York Convention, thus limiting the possibility of appeal.
Unlike in-court proceedings, which are subject to the Civil Procedure Code, out-of-court arbitration is governed by the Arbitration Act B.E. 2545 (2002) and can be conducted either by agreement between the parties or through an arbitral institution of their choice. The arbitral tribunal can be composed of one or more individuals with appropriate qualifications for the case at hand.
The international arbitration regime in Thailand is primarily based on the UNCITRAL Model Law, with some notable exceptions. The major differences include: the absence of the seat of arbitration clause; greater court intervention in arbitral proceedings than provided for by the Model Law; and a default in the application of domestic law rather than that of the seat of arbitration.
Arbitration is an effective dispute resolution mechanism for international business in Thailand. Juslaws & Consult can assist in drafting ADR-related contract clauses and determining whether arbitration is the best method to settle your dispute.
Litigation
Litigation in Thailand typically involves court proceedings that culminate in the issue of a final judgment or order. Typical remedies include monetary compensation, specific performance and injunctions. In addition, successful litigants may be awarded legal costs; however, these are normally not substantial.
In Thailand, civil court proceedings typically take 12 to 18 months from the commencement of a case through to trial. The length of a trial itself depends on the number of witnesses and the availability of dates for hearings. The hearing schedule is generally dictated by the court.
While not mandatory, courts in Thailand encourage parties to negotiate or mediate a settlement of their dispute. The court will often conduct a mediation session before proceeding to the trial stage of the case.
In a conciliation or mediation session, the mediator will try to find acceptable solutions to both sides of the dispute and reach an out-of-court settlement. The disputing parties can designate their own mediator or use a mediator from the Thai Mediation Center services.
An appeal from a lower court judgment is available in Thailand, but permission to proceed with an appeal is usually limited to cases that involve significant questions of law or errors of fact. Appeals are usually heard by the same court that issued the original judgment. The appeal court will review the evidence and legal arguments that were presented in the original trial. New issues and evidence will not be considered unless the appellate court deems it necessary for a complete review of the case.
