The existence of a specialized court in Thailand encourages innovation and creates confidence in international trade. It also ensures that disputes are resolved in line with the country’s governing law.
Specific opposition to liberalization has emerged in the agricultural and services sectors. NGOs have raised concerns over the impact of trade disputes on public health.
Intellectual Property and International Trade Court
The Central Intellectual Property and International Trade Court is a recent development in Thailand’s justice system, ensuring that IP rights holders can be held accountable for their actions. Its judges have specialized knowledge of intellectual property laws and international trade regulations. The court is also closely integrated into the broader legal system and appeals can be made to the Supreme Court, creating a hierarchy of courts and ensuring consistency in interpretations of law.
Although CIPITC handles 7,000 cases annually on average, only a small percentage of those are civil cases related to IP infringement. Civil actions are typically more costly and lengthy for the plaintiff and require strong evidence of infringement and commercial prejudice.
Enforcement of judgments by local courts is relatively efficient and cost-effective. However, it is important to seek local counsel with experience in enforcing intellectual property rights in Thailand. Gratuitous payments to government officials responsible for regulatory oversight and enforcement remain common, and firms that do not make these payments may be at a competitive disadvantage.
Arbitration
The number of disputes involving international trade and investment in Thailand has been rising significantly, putting additional strain on the already overburdened court system. This is in part why more and more cases are being settled through arbitration instead of litigation.
Out of court arbitration in Thailand is governed by the Arbitration Act B.E. 2545 (2002), which is based on the UNCITRAL Model Law with specific Thai additions. Arbitration awards are enforceable by Thai courts.
The court will only set aside an award if there is evidence of corruption, irregularity or fraud committed during the proceedings. The parties in setting-aside proceedings must submit their application together with a copy of the award to the other party for filing an opposition. A hearing will be held after that to consider the application. Foreign representatives are allowed to participate in setting-aside proceedings. However, they will be subject to the requirement to obtain work and residence permits for Thailand.
Negotiation
Negotiation is a widely used mode of dispute resolution in Thailand. Disputes can also be resolved through the use of mediation and/or arbitration.
Thais tend to expect bargaining and haggling during negotiations and may be offended if you do not engage in it. Prices oft en vary widely and can change by more than 40 percent between initial offerings and final agreements. It is helpful to leave enough room for negotiation to allow for these price changes.
While the United States and Thailand have a close economic relationship, disagreements in trade policy have arisen over the scope of any future free trade agreement (FTA). Opposition has focused on agricultural liberalization and concerns in several service sectors about their ability to compete with U.S. competitors. Moreover, differences are seen over whether the Purchasing Power Parity (PPP) measure should be adjusted to reflect local price levels or remain at current levels. Lastly, a number of Thai stakeholders have objected to the CPTPP because it will make medicines more expensive and strengthen pharmaceutical giants’ monopoly on seeds.
Mediation
The mediation process can be undertaken at any stage of a dispute and is an out-of-court procedure. It can be conducted either before a trial starts or during the course of a court case.
During the mediation process disputing parties may have either a one or three arbitrators. In cases where the parties cannot agree on who should be an arbitrator a list of potential candidates is presented to both sides. They then have fifteen days to remove names of the candidates they do not prefer and add those of those they do.
The mediators are a neutral group that does not stand to personally benefit from the terms of the settlement and has no preconceived bias about how a dispute should be resolved. They are able to provide impartial advice on the legal, historical and procedural aspects of the disputes they handle. Mediation can be extremely helpful in bringing about mutually satisfactory settlements and saving time for the courts.
