Disagreements can disrupt business operations and impact profitability. To minimize the risk of disruptions, companies should include clear Thailand dispute resolution clauses in contracts and ensure compliance with local laws and international trade agreements.
Arbitration is a formal process where disputing parties submit their dispute to one or more arbitrators who render a binding decision called an arbitral award. Arbitration is generally faster and less expensive than litigation.
Negotiation is an effective way to resolve trade disputes in Thailand. It can help businesses save time and money by avoiding legal proceedings. However, navigating the process requires cultural awareness and sensitivity. Juslaws & Consult can guide clients through the best negotiation strategies, including when to communicate directly with opposing parties and how to use various techniques.
A variety of factors can cause trade disputes, from contractual disagreements to regulatory compliance and intellectual property rights. Navigating the dispute resolution process requires a thorough understanding of Thai law and international trade regulations. Businesses can mitigate risks and reduce their exposure to litigation by conducting due diligence, drafting comprehensive contracts, and seeking expert legal advice.
The Civil and Commercial Code governs the general principles of contract negotiation and formation in Thailand. Sector-specific laws may also apply. For example, real estate and financial service contracts require special considerations under the Land Code and Banking Act, respectively. The Trade Competition Act regulates competition law and addresses anti-competitive practices.
Dispute resolution mechanisms are essential for maintaining fair and transparent trading conditions in Thailand. Disputes can be settled out of court through various methods, such as mediation, conciliation, and arbitration. Arbitration is particularly useful for resolving cross-border trade disputes, as Thailand is a signatory to the New York Convention and enforces international arbitration awards.
While litigation remains common in Thailand, especially for dispute cases involving complex issues and disputes with high damages awards, other methods of alternative dispute resolution such as mediation can also be employed. This method of dispute resolution allows disputants to avoid the high costs associated with litigation and can be used to resolve a variety of trade disputes.
In this method of conflict resolution, disputants meet with a neutral mediator to discuss their disputes and arrive at a mutually acceptable compromise agreement. Mediation is a relatively informal process, but it can be more effective than a court proceeding or arbitration in terms of the parties’ ability to reach an amicable solution.
Generally, disputes related to contracts or civil damage are appropriate for mediation. However, if a case involving criminal charges cannot be mediated, it will not be resolved in this fashion.
The Dispute Mediation Act 2562 (2019) defines the scope of mediation, including which types of disputes can be mediated. It also specifies the maximum amount of money that can be disputed in a mediation. Unlike other ADR processes, certain facts resulting from mediation proceedings are not admissible as evidence in a court of law or in a dispute tribunal. If both parties agree to a settlement, the mediator will draft the settlement agreement, which will be binding on both sides.
Arbitration is a form of alternative dispute resolution that involves the appointment of a neutral third party to settle trade disputes. This method of resolving conflicts can be a faster, more cost effective alternative to litigation. Arbitration can also be more flexible and tailored to the specific needs of a dispute. In addition, arbitration proceedings are generally private, which can protect a business’s reputation and proprietary information from public disclosure.
The arbitration process in Thailand is regulated by the Arbitration Act, which is based on key principles of the UNCITRAL Model Law on International Commercial Arbitration and includes Thai-specific amendments. Currently, there are several reputable arbitration institutions in Thailand that offer a variety of services. Arbitration proceedings typically take one year on average to reach conflict resolution.
A claimant may choose to present its defenses and claims on the first day of hearing, and it is at liberty to evaluate evidence and question experts on the issues in dispute. Upon the conclusion of the hearing, the tribunal will issue an award.
The court will consider the award and determine whether to enforce it. However, the award must be in accordance with the provisions of the Arbitration Act. For this reason, a claimant should be careful to include an arbitration clause in its contracts with the other parties.
Litigation involves a trial conducted in court where the judge renders a binding decision based on the evidence presented. The judgment can be enforced by law, and it sets legal precedents. However, litigation can be expensive and time-consuming. The adversarial nature of the process may also damage the relationships between the disputing parties.
Litigations involving trade disputes in Thailand usually begin with the filing of a complaint by the plaintiff. If no resolution is reached through mediation, the court will schedule witness hearings to hear testimony from both sides of the case. Once all witnesses have testified, the court will set a date to hear arguments from both parties. Then, the judge will issue a final decision that is binding on all parties involved in the dispute.
Arbitration in Thailand generally aims to be expedited, and some institutions provide a quicker resolution than local state courts. However, post-award proceedings such as seeking a court order for recognition or enforcement of an award, can prolong the duration. Additionally, local Thai courts apply a stare decisis approach to arbitration, meaning that prior Supreme Court decisions can have an influential effect in the adjudication of disputes.
In class action lawsuits, the courts will apply an inquisitorial system, and they may direct questioning of all witnesses to gather essential facts for resolving the case. However, both parties have the right to rebut evidence that is submitted by the opposing party.