Free Consultant
The Difference Between Arbitration and Court Proceeding under Thai Law
When humans live together as a society, there is always a chance for disputes between each other. There are many types of dispute resolutions, including:
Negotiation [TS1]: Negotiation is the most basic form of dispute resolution; this does not require any legal proceeding or third party to proceed.
Mediation [TS2]: Mediation is a more complex method than negotiation. Other than the parties, mediation requires a third party called a mediator to facilitate the mediation proceeding.
Arbitration: Arbitration is a dispute resolution between the parties which may involve more than 2 parties. The parties will send their dispute to a third party to deliberate an arbitral award, in which the parties agree to comply with an arbitral award. An arbitral award shall be binding on the parties.
Litigation: Litigation is a dispute resolution where the parties bring a dispute into the court proceedings according to the civil procedure (or criminal procedure) under respective Procedure Codes. The court will deliberate based on evidence; the parties have the right to adduce and plead a complaint against them.
The difference between arbitration and general court proceeding
In general, arbitration is a quick and effective dispute resolution. The proceeding is not as protracted as a court filing under the Procedure Codes because the arbitration proceeding is not strict and complicated. However, the parties can still adduce their evidence before the arbitrators fairly and equally.
THAC’S NEWS & ARTICLES
Commencement of the proceedings
In case of a court proceeding, the parties do not require to agree beforehand. Whenever a dispute arises, the parties can immediately bring a dispute to a court without asking the other party for consent.
On the other hand, the parties must voluntarily agree on the commencement of arbitration in advance. The parties shall enter into a contract known as an arbitration agreement, pursuant to which the parties will present their existing or future disputes to an arbitral tribunal, which will decide whether or not to appoint arbitrators to resolve such disputes. As a result, a mechanism for resolving disputes by arbitration is established with all parties’ consent, authorizing an arbitral tribunal to settle such a dispute. The authorization may be contained directly in the arbitration agreement or in separate contracts, i.e., the contract under which the parties agreed to conduct specific business between themselves and that this contract will be included in the previous arbitration agreement. Therefore, if the parties did not consent in advance to settle a dispute by arbitration, or if the parties continue with arbitration before an arbitral award is delivered, the arbitral award becomes unenforceable [TS3].
In Thailand, the parties can commence an arbitration through 2 methods: 1) in-court arbitration under Article 210-222 of Civil Procedure Code [TS4], and 2) out-of-court arbitration under Arbitration Act B.E. 2545 and arbitration rules of arbitral institutes or dispute resolution offices [TS5].
Convenience and speed
A court proceeding is time-consuming and consists of various procedures and details. The parties also can appeal to Appeal Court or Supreme Court, which prolongs and protracts the proceedings.
Meanwhile, arbitration provides faster and more flexible proceedings. Moreover, the arbitrators appointed by the parties mostly have expertise relevant to the disputes, making proceedings even faster. Once the arbitral tribunals deliver the awards, the disputes will be final. The parties are obligated to comply with the judgments and cannot appeal further except in some cases only.
Complication and complexity of the cases
As mentioned above, the appointed arbitrators are mainly experts on the disputes. Therefore, they quickly recognize the nature of the cases, including the relevant evidence; thus, the proceeding is fast, effective, and just.
In a court proceeding, however, as the parties cannot choose the judges to deliberate the cases, the judges may not possess the appropriate expertise for the disputes. In this case, the cases will depend on the evidence, expert witnesses who testify in courts, and the lawyers’ competency in each case, which may render even more delays.
Confidentiality
In a court proceeding, the Civil Procedure Code stipulates that a court procedure must be open and accessible to a third party to hear and acknowledge except in some cases. The public proceeding may not be suitable for businesses that need to preserve confidentiality and business image.
On the contrary, arbitration is carried out confidentially. A third party does not have a right to access an arbitral proceeding or access case information. Therefore, confidentiality and business image are securely preserved.
Relationship between the parties
As a court proceeding takes a long time and may protract for several years in some cases because of appeals to Appeal Court and Supreme Court, this costs time and business opportunity and includes a loss of a business relationship.
An arbitration takes less time and is more flexible and relaxed, so it is friendlier for the parties. Therefore, this way of proceeding is more favorable for the parties who need to keep their business relationship further into the future.
Reference:
- Key summary on a workshop seminar for potential arbitrators in “an arbitral procedure course”.
- https://tai.coj.go.th/th/file/get/file/20190329e8feec7a17790f108bed0f9b922ed185134126.pdf (in Thai).
- Thai law and promotion for commercial arbitration.
- https://tai.coj.go.th/th/file/get/file/20190507d41d8cd98f00b204e9800998ecf8427e104904.pdf (in Thai).
- Jarunee Maneerat. A dispute resolution by arbitration in small capital cases: A study on time frame and cost in a case proceeding. https://core.ac.uk/download/pdf/233619955.pdf (in Thai).
