Dispute Resolution is an important aspect of doing business in Thailand. However, litigation is often costly and lengthy.
In contrast, arbitration provides for a faster and cost-efficient solution. Moreover, arbitration is conducted in a private setting. This can be particularly beneficial for businesses with international employees who need to comply with foreign employment laws.
Alternative Dispute Resolution
In Thailand, a variety of disputes arise in both public and private sectors. The resulting litigations have led to a heavy load of court cases, and it may take years for those cases to reach a judgment. The courts have responded by establishing ADR programs, including conciliation and arbitration.
Arbitration is similar to judicial settlement, but it takes place in a non-judicial setting with the parties selecting an arbitrator or panel of arbitrators. This type of dispute resolution can be expedited and more cost-effective than a full-blown trial.
The arbitration law in Thailand is based on the UNCITRAL Model Law, but there are distinct characteristics that make it different. For example, although the model law allows for interim remedies, the Thai Arbitration Act requires that such relief must be requested from a court. Our firm is well regarded for its full-service disputes offering and regularly represents Thai and international corporate clients in arbitration, mediation and litigation.
A reputable Thailand conciliation law firm can help resolve disputes outside of the court process. This can reduce the cost of lengthy litigation. The disputing parties will agree on a neutral mediator to settle the dispute. The mediation process can result in a binding compromise agreement or withdrawing the dispute case from court.
The arbitration institute will schedule a meeting to set the proceedings and establish evidence matters, and officially designate the tribunal for the out-of-court conciliation. The disputing parties may choose a one or three arbitrators, depending on their preferences. The disputing parties will be able to remove the names of the potential arbitrators they do not prefer from the list within fifteen days.
Under the Dispute Mediation Act 2562, disputes that are not referred to a court or are not under the jurisdiction of the courts are eligible for conciliation. However, disputes involving amounts exceeding five million baht cannot be mediated. It is also prohibited to admit certain facts from a conciliation into evidence in a court, trial or arbitration proceeding.
Arbitration in Thailand is regulated by the Arbitration Act of 2002. It is administered by the Thai Arbitration Institute (THAI), under the Office of the Judiciary.
In order to promote itself as the venue of choice for international arbitration, recent efforts have been made to relax laws and regulations governing visas and work permits for foreign arbitrators and those acting as party representatives in arbitration proceedings. For example, ‘Smart visas’ and special work permits are available to facilitate the participation of these individuals in Thai arbitration proceedings.
In addition, THAI’s 2017 rules introduce an important revision to the procedure for challenging the appointment of an arbitrator. This allows tribunals to address challenges without recourse to the courts, thereby improving efficiency and consistency of the arbitration process.
The process of litigation can be long, costly and unpredictable. A favourable resolution of disputes can often be reached with the assistance of mediation firms.
Commercial disputes in aviation, banking and finance and information technology (IT) sectors call for specialised dispute resolution methods handled by experienced lawyers. A recent amendment to the Civil Procedure Code in September 2020 should encourage more parties to opt for mediation in the event of a dispute.
Mediation allows disputing parties to meet with an unbiased third party in order to settle the matter. A mediator can help the parties find a mutually acceptable compromise and draft a settlement agreement that will be binding on all parties.
Court-annexed mediation programs have demonstrably reduced the number of cases clogging the judiciary’s case backlog. Nevertheless, further improvements are required to facilitate the use of alternative dispute resolution methods in Thailand. These include improvements to the process of enforcing international mediated settlement agreements.