A variety of disputes can be settled out-of-court, rather than by resorting to litigation before the Thai courts. Arbitration and conciliation are the most commonly used methods.
Dispute resolution is usually conducted in a private setting, which allows for confidentiality. It is also often quicker than going to court.
In Thailand, arbitration is regulated by the 2002 Arbitration Act. The Act is a comprehensive redrafting of the UNCITRAL Model Law and incorporates all of its core principles together with Thailand specific additions. The act allows parties to choose the number of arbitrators and decide on the language and rules to be used in the arbitration proceedings.
The courts have generally respecting the choice made by the parties regarding the governing law of the arbitration agreement and will enforce and interpret it accordingly. In cases where the tribunal determines that it has exclusive jurisdiction over certain matters, however, these issues cannot be arbitrated and must be resolved through court proceedings.
During the proceedings, the tribunal has the power to order documents to be submitted and summon witnesses. The tribunal may also employ experts to examine evidence. During the hearing, the parties submit and present evidence and are given opportunity to question witnesses. The hearing is conducted in private and is confidential.
As a general rule, arbitration awards in Thailand are binding on the parties. Unlike in the context of litigation before courts, arbitration proceedings are typically faster and less hostile and can be structured in a more tailored way for the specific dispute.
However, a major disadvantage of arbitration is that arbitrators do not have the power to grant interim measures and relief as judges do (with the exception of certain special cases) and that a claimant needs to file an application in court to seek such relief.
In the context of labor disputes, such as those arising out of a foreign employment agreement, this may lead to a lengthy and potentially costly legal proceeding. A solution here could be a conciliation process where a neutral third party will facilitate discussions with the parties and help them reach a mutually acceptable settlement.
Dispute resolution through mediation is an increasingly popular option in Thailand because of the clogged court dockets. It is a cheaper and faster alternative to litigation for the parties.
In the traditional court-based system, disputes are assessed by a judge who is not an expert in your particular case (with the exception of some specialised courts – Bankruptcy Court, Intellectual Property and International Trade Court, and Labour Court). A skilled mediator can often bring a more expedient resolution to your dispute than a typical judiciary process.
The legal framework for out-of-court mediation in Thailand is governed by the Arbitration Act B.E. 2545 (2002), a comprehensive redrafting of the UNCITRAL Model Law on International Commercial Arbitration, with Thai-specific additions. An arbitration agreement can be included in a contract or drafted as a separate agreement.
The DFDL team of arbitration and conciliation lawyers in Bangkok can help you determine if out-of-court mediation is the right path for your dispute, whether as an independent mechanism or within a court-annexed mediation process. We can also represent you at any mediation proceedings as well as assist in drafting early conciliation settlements that are binding on the parties.
Mediation is an old Asian concept, which has been institutionalized in Thailand for a long time. It is now highly promoted by the courts. The courts ask parties to mediate their dispute, before initiating court proceedings. The court has a list of court mediators, but parties can also hire their own private mediator, such as a lawyer, former judge or entrepreneur.
The courts have the authority to order court annexed mediation at any stage of proceedings in civil cases. The courts may also appoint any person or persons to conciliate the case.
As a result of the lack of adverse costs orders, claims in Thai courts are often appealed until a final judgment is rendered. However, mediation can mitigate this trend, as the arbitration award is generally final and cannot be challenged on appeal. The Dispute Mediation Act 2562 (2019) has recently been introduced, which provides a framework for out-of-court mediation. The Act has been drafted in line with the UNCITRAL Model Law, and it will hopefully promote the use of ODR to resolve disputes between consumers and businesses.