Mediation: Aspect in Thailand
Mediation has its Lex Generalis in the Civil and Commercial Code regarding mediation in Sections 850-852, which essentially described as;
A mediated agreement is an agreement in which both parties agree to settle any disputes which exist or will be happening by compromising with each other.
Suppose a mediated agreement is not made in writing with a signature of a liable party or his representative. In that case, it cannot be used as evidence for a lawsuit.
The mediated agreement will be resulted in the forfeit of the right to the previous claim for each party and will grant each party the right in the agreement instead.
Provisions in the Code can be analyzed that the basic principle of mediation is based upon the freedom of agreement between disputants to settle their commercial conflict. Significantly, the result of mediation is to turn conflict into a written agreement for the purpose of enforceability when one party dishonored the mediated agreement. Nevertheless, the Code itself does not specify the mediation proceeding.
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Thailand Arbitration Center (THAC) is a Thai organization that provides mediation services to the public. THAC has thus issued rules to govern mediation proceedings, whether in large-scale domestic, international corporations, and SME businesses. The rules highlight the adoption of the basis in the UNCITRAL Model Law on International Commercial Mediation and International Settlement Agreements Resulting from Mediation.
In the meantime, Thailand also issues another law regarding mediation: the Mediation Act B.E. 2562. However, this law applies to mediation in small claim disputes with a sum in dispute is not exceeding five million baht for Thailand’s local communities such as SAO., Municipality, or Pattaya City, etc. Whether it is an SME or a large company, THAC does not have a restriction on the amount claim for matters related to business. Since THAC’s rules are based on UNCITRAL, it is more suitable for foreign businesses to use the service at THAC.
Resolving commercial disputes by mediation at THAC has its advantages. There are good facilities, and THAC mediators will also understand both the commercial aspect and Alternative Dispute Resolution (from now on referred to as “ADR”) proceeding following UNCITRAL guidelines. If the parties agree on the mediated agreement, it will conclude the conflict. Despite its advantages, there are some concerns about enforcing a mediated agreement. When one party does not comply with the mediated agreement, they might file a Thai court lawsuit. Thai court will not immediately enforce the mediated agreement. Still, it will have to consider the agreement’s content all over again, which likely to end up in a prolonged fight from trial court – appeal court- up until to the Supreme Court. This is one of the problems that Thai legislative require a structured solution if Thailand wants a commercial mediation proceeding that is more systematic and recognized internationally. Practically, suppose such mediation is made under the management of THAC or operated by an agency that THAC has MOU with, together with having a mediation agreement by the parties to has the same force and effect as the award. In that case, it may be solved by submitting the issue to a THAC’s single arbitrator to enforce the mediated agreement. This can be done through the Thailand Arbitration Center Rules on Arbitration under the Mediated Agreement B.E. 2560. Under Thai law regarding arbitration, the award can be enforced by the court of jurisdiction, which is faster and less complicated when compared with traditional court procedure, and it is the quickest practical solution possible
On the contrary, under the Mediation Act B.E. 2019, small claims can be submitted to the Thai court to immediately enforce the mediation agreement. There is no need to file another lawsuit where normal court procedure will be applied; if the case is at the stage of the trial court, an order to accept the application; if the case is in the stage of the appeal court, an appeal against the trial court order and the final decision order.
There is some question for foreign businessmen pursuant to the Mediation Act B.E. 2562 on selecting mediation as a dispute resolution for small claims. Some considerations worth mentioning are; 1. The expertise in your business of the mediator; and 2. facilities, where THAC is now ready to provide. THAC also has developed a plan for an electronic dispute resolution. Meaning that even during the COVID 19 epidemic, THAC is ready to welcome everyone to enjoy ADR services conveniently with THAC. Most Importantly, THAC’s fees and expenses are not that high compared to other leading arbitration centers or institutions.
Finally, the Singapore Convention on Mediation, officially known as the United Nations Convention on International Settlement Agreements Resulting from Mediation 2019. Since Thailand is not yet a signatory country, a mediation agreement made in Thailand is difficult to enforce abroad (regarding the recognition of mediated settlements.) Likewise, mediation agreements made in other countries are also difficult to enforce in Thailand. There has not been any serious discussion in being a signatory country to this Convention. I (the author) agree with being a signatory to this Convention, in a similar fashion as Thailand also a signatory of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention 1958, to develop the ADR in Thailand closer to an international system.