Free Consultant
Arbitration Under Thai Law
In the course of business or even personal interactions, people may find themselves at odds with each other, to the point where they need to escalate to an outside forum to resolve such conflicts. Typically, they may consider that pursuing litigation in court is the only solution. However, litigation can be expensive, time-consuming, and potentially harmful to one’s reputation and relationships. Alternative dispute resolution (ADR) offers forums to resolve conflicts that can be preferable to litigation.
ADR proceedings, which include arbitration, mediation, and negotiation, allow both parties to settle issues with greater control over time, costs, and procedures than they would have with litigation in court. In addition, while negotiation involves just the parties in conflict, arbitration and mediation see an independent third party facilitating discussion to a settlement or overseeing and adjudicating the result. Because of these benefits, ADR has acceptance in jurisdictions around the world. Focusing on Thailand and arbitration, Thai law and, by extension, the Thai court system recognize arbitration proceedings. Here, we discuss such arbitration, specifically regarding Thailand.
What is arbitration?
Arbitration is an ADR option that is similar to court proceedings in some ways but still has the flexibility, efficiency, and control for which ADR is known. Basically, a neutral, independent third party, an arbitrator (or three or more arbitrators comprising an arbitral tribunal), considers evidence and testimony from the involved parties and then renders a decision. Unlike in litigation, where they have no control over judge selection, parties decide on and appoint the arbitrators to oversee their arbitrations.
How arbitration works in Thailand
Arbitration in Thailand is very similar to proceedings in other jurisdictions. While an aggrieved party can file a lawsuit in court unilaterally, both parties must agree to arbitration, as prescribed under the Arbitration Act. However, under Chapter 3 of Thailand’s Code of Civil Procedure, litigants can still undergo arbitration with court oversight. Agreeing to arbitration usually happens well in advance of a dispute arising through an arbitration agreement or clause.
Whether drafted in anticipation of potential disputes or in response to settling a dispute, an arbitration agreement is created as the base on which an arbitration proceeding occurs. This is where the involved parties outline various details, such as arbitrator appointments, rules and procedures, confidentiality parameters, and so on.
Once in place, arbitrations can continue much more quickly than court proceedings. Parties are not bound by the structure and schedule of the courts so that they can expedite hearings and discussions at their convenience. Since they also do not have to worry about confidentiality and privacy, the hearings and discussions can be more open amongst the involved parties. If they were in court, they may find themselves under public scrutiny, thereby hindering their willingness to disclose.
Furthermore, parties can select arbitrators who are experts in the underlying subject or sector (e.g., engineering) so that there is no need to solicit expert testimony to explain issues to judges or juries. Arbitrators can dive into the heart of the matter as they need little explanation of the technical issues, expediting the process.
How Thai courts are involved in arbitration in Thailand
As mentioned above, Thailand allows for court-appointed or court-mandated arbitration as well as out-of-court arbitration. There are also other ways in which Thai courts can be involved in arbitration proceedings in the Kingdom.
Enforcement of arbitral awards
Generally, arbitral awards are legally binding under Thailand’s Arbitration Act. Binding arbitral awards are then enforceable. This means that if a party does not meet its obligations under the award, the other party can petition the appropriate court to enforce the award. Furthermore, Thailand is a member of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, so awards from other member countries can be enforced here and vice versa.
Emergency arbitration
While arbitration is more expedient than litigation, sometimes parties require more immediate relief. Specifically, they may want certain safeguards to protect their interests. These interim measures, or emergency arbitration, are available in Thailand. However, the Arbitration Act empowers the courts to enact interim measures under Section 16. It does not explicitly grant arbitral tribunals any such powers. This could prove problematic until the law is amended.
THAC: Arbitration experts in Thailand
The Thailand Arbitration Center (THAC) is an excellent resource if you have questions about arbitration, including emergency arbitration remedies, or any other ADR proceedings in Thailand or anywhere in the world. THAC is a renowned dispute resolution center that provides access to ADR practitioners who are experts in various subject matters. With a central Bangkok location, parties find THAC convenient, whether traveling from within Bangkok or Thailand or arriving at one of the country’s international airports. THAC also offers fully equipped, state-of-the-art facilities, with complete administrative support, at reasonable rates, making THAC ideal for in-person and remote hearings as well as online dispute resolution. For further information, please feel free to contact us at [email protected] or +66 (0)2018 1615. THAC is looking forward to helping you.
