New Arbitration Certificate
Thailand benefits from the increasing international trade transactions, these generate a higher income and flow of money in the country. Despite this higher income and growing employment, this increasing volume of international transactions will also bring a higher number of disputes. Resolving international disputes in a fast and effective way is an important goal to promote and increase new business and investments in the country.
Alternative dispute resolution (ADR) is internationally accepted and widely used to solve international commercial and investment disputes. In particular, arbitration is often chosen because of its fast and effective nature, less complicated and more flexible compared to court proceedings. Arbitration is suitable for business because of its confidentiality, on one hand, it can preserve parties’ reputation, on the other, their business secrets. Moreover, arbitration due to the flexibility of the process that allows parties to decide many elements, i.e. arbitrators, laws applicable, the seat of arbitration, etc., it could be less expensive and more time saving compared to the court proceedings.
Thailand attempted to become a regional centre for providing ADR services. Although strategies to promote an inter-regional network to develop ADR systems, in practice it turned out that current laws and regulations do not facilitate to achieve this goal.
One of the problems is constituted by the fact that foreign parties in the arbitration proceedings, as well as their representatives, have to go through many steps to access to arbitration in Thailand, such as submitting documents for approval to different agencies. Moreover, there are several rules, regulations and complex measures provided by national law that do not facilitate the appointment of arbitrators and do not hold these to perform their mandates. These inevitably impacted on the competitiveness of ADR services in Thailand.
In March 2019, considering all issues mentioned above and keeping in mind the goal to promote ADR in Thailand, the National Legislative Assembly, proposed to amend the 2002 Arbitration Act. On 15th April 2019, the day after its publication in the Royal Gazette, the 2019 Arbitration Act (Version 2) come into force.
The new Act brought some innovations, for instance, now parties entering into an arbitration proceeding are allowed to select arbitrators from a wider range of expertise, foreign arbitrators are facilitated to enter and act in the country. Thailand will become the perfect choice for parties looking for a place to conduct the arbitration and a leading centre for ADR in the region.
As mentioned above, under the new Arbitration Act, all persons involved in the arbitral proceedings can request the Thai government to issue a special permit that allows them to enter and work in Thailand temporarily. Once parties of the arbitration proceedings, including arbitrators and counsels, received confirmation of their appointment they can apply for the visa, and attach the confirmation letter from the institution in their application, they are permited to work in Thailand temporarily. However, the new visa issued has specific limits, people are limited by their duties as reported in the certificate attached to their application. The violation of such limits results in a temporary or a perpectual ban from entering in Thailand that may vary on a case by case basis. This visa will be faster and more convenient compared with the application for a normal working permit.
In any case, a foreigner holding a work permit does not need to enter in the application process to obtain the new visa since these two (work permit and new visa) overlap. The annexe of the Royal Decree 1979 allows foreigners to do so upon two conditions. Firstly, the governing law of the arbitration is not Thai law and secondly, the award will not be enforced in Thailand.