THAC Rules provide a state-of-the-art procedural framework for dispute resolution by arbitration. All parties to a dispute are given the freedom to agree on their own arbitration procedure to be convenient, time-saving, cost-competitive, and fair to all sides. Small-sized disputes also have access to this arbitration service.
What is Arbitration?
Arbitration is a process in which the parties agree to submit the actual or potential dispute by appointing one or more persons called an arbitral tribunal consisting of an odd number of persons in order to render an arbitral award based on the evidence presented at trial. The arbitrator shall act as a mediator, not as a party representative, even the party who appointed it. When the arbitral tribunal has rendered an arbitral award, the parties agree to be bound to comply with the arbitral award arising from the settlement of such dispute.
Arbitration can be applied to all types of civil and commercial disputes, whether disputes arising from the sales contract, lump sum contract, insurance contract, trademark license agreement, energy, and environmental disputes, etc.
If a dispute arises, the parties may agree to settle such dispute through arbitration by stipulating it as a clause of the main contract or making a separate arbitration agreement if a contract already exists.
After the arbitral tribunal has rendered an arbitral award, it shall be binding on all parties. If the losing party does not comply with the arbitral award, the prevailing party can also file a petition with the court to enforce the arbitral award. As Thailand is a party to the New York Convention, such an arbitral award is not only binding in Thailand but also in other 163 member countries (updated information as of March 27, 2020).
Types of Arbitration
Arbitration can be conducted in the court (in-court arbitration) and outside the court (out-of-court arbitration). In-court arbitration is to obtain the court approval to conduct the arbitration proceedings and render an arbitral award for the dispute case at trial. After an award is made, the arbitrators shall present the award to the court in order for the court to make a judgment based on such an award.
Most parties prefer out-of-court arbitration to reduce the steps in the arbitration proceedings without submitting the dispute to court because if the dispute reaches the court, it will be difficult to reach an agreement. There are 2 types of out-of-court arbitration which are:
1.Ad Hoc Arbitration
Ad hoc arbitration is conducted by the parties wishing to resolve the disputes by themselves through arbitration, by forming an arbitral tribunal and specifying details of proceedings. The arbitrators shall consider the dispute without using any arbitration service provided by arbitration institutes.
The parties may agree to use the services provided by one of the arbitral institutions (The arbitral institutions provide services at both domestic and international levels, making it suitable for disputes at various levels). The arbitral institutions have competent persons with expertise in various fields to acts as arbitrators. The use of experts from the institutions provides the disputing parties more convenience in terms of facilitation and precipitation of the issue to reach a clear conclusion.
The Main Advantages of Arbitration
Mediation service at THAC covers both civil and commercial disputes, which gives flexibility and delivers the best solution for all parties involved in a dispute. THAC also has a number of registered mediators and provides training for mediators, which meet international standards.
What is Mediation?
Mediation is an alternative dispute resolution process whereby one or more third parties are appointed to help or facilitate the parties involved in a dispute to achieve amicable resolution or settlement. The third parties which act as the neutral and unbiased persons are not responsible for making an award, and this is the main difference between the role of the conciliator and the arbitrator. In addition, the conciliator has no power to require the parties to accept any conclusion.
An important aspect of the mediation system is that it is primarily based on the willingness of all parties. The willingness must arise and exist throughout the process, from the beginning of the mediation process until before making an dispute resolution or settlement agreement. In summary, from the beginning of the process, if any party is not willing to use mediation, either by explicit and implicit forms of rejection, such as not responding within the deadline, the mediation cannot be conducted. Even after the mediation has already started, the mediation shall be terminated if either party wishes to terminate the mediation or a solution cannot be reached.
On the other hand, if the mediation process proceeds efficiently and can reach a solution that is beneficial and acceptable for all parties, the parties may make a compromise agreement which is considered a novation. In the case of novation, the original debtor is totally released and shall be bound by the terms stipulated in such compromise agreement. However, in making a compromise agreement, the Civil and Commercial Code requires that in order to make an award enforceable, the written evidence signed by the party liable is needed. In the past, it can be observed that the lawsuit had to be brought to the court for reconsideration which is different from the procedures for requesting the court to enforce an arbitral award. At present, the government has enacted the Mediation Act B.E. 2562, which stipulates that a petition can be submitted to the court to enforce the dispute settlement agreement. However, this law still has limited use because the mediation must be conducted by government agencies only.
Comparison between mediation and arbitration
|Basis for Comparison||Mediation||Arbitration|
|1. Prerequisites||There are no conditions, but the process must be mainly based on the willingness of all disputing parties to participate in mediation||The process can take place only if it is specified in a clause of the arbitration agreement in connection with the dispute resolution.|
|2. Appointment of the mediators or arbitrators||The mediators can be appointed only after the dispute occurs.||The arbitrators can be appointed before the dispute occurs.|
|3. Number||The number of mediators can be odd or even.||The number of arbitrators must be odd, as it is necessary to reach a majority vote in order to render an arbitral award.|
|4. Role||The mediators facilitate the parties in negotiation, whether creating a good and suitable atmosphere for negotiation, finding the real needs of each party, supporting and suggesting the solutions that may be beneficial to all parties, but mediators do not have the power to make an award for such dispute.||The arbitral tribunal has the power to decide on matter in issue within the jurisdiction of the arbitral tribunal and can consider, decide and make an award for such dispute.|
|5. Outcomes||Dispute settlement agreement/compromise agreement||Arbitral award which is binding on all parties|
|6.Result of dispute resolution||WIN-WIN||WIN-LOSE|
Online Dispute Resolution is an online platform that systematically combines different dispute settlement methods. This mode of settlement is time-efficient and cost-saving and does not require any travel by all.
Fund Holding is a service provided by an arbitration institute which acts as a arbitrator holding the advanced fund for a case in the ad hoc arbitration, in which an arbitration institute is assigned by the disputing parties or the arbitrators in the ad hoc arbitration case as the fund holder to guarantee payment of debt in accordance with an arbitral award.
The arbitration institute can charge fees from the parties or persons ordered by the court to make the guarantee deposit.
- Fee for guarantee of arbitrator’s fee and litigation costs and expenses at the rate of 10,000 Baht per case per year*.
- Fee for guarantee of debt repayment in accordance with the arbitral award, at the rate of 15,000 Baht per case per year*
- *In the event that the arbitration institute provides a guarantee deposit for less than one year, the fees shall be charged at the rate of one year.
The arbitration/mediation costs are fixed by the Thailand Arbitration Center in accordance with the schedule of costs attached to the Thailand Arbitration Center set of rules.
Fee Calculator : Link