Thailand litigation guide
Chirachai Okanurak and Timothy Breier
Baker & McKenzie
Tel: +66 (0) 2636 2000; Fax: +66 (0) 2636 2111; Website: www.bakernet.com
Bangkok rivals Hong Kong and Singapore as the most important regional hub for international business in Southeast Asia. Strong forces within the Thai business, legal and political communities continually push to make Thailand a more investor friendly environment, a more efficient travel centre, as well as a viable venue choice for alternative dispute resolution.
The Thai legal system is a civil law system. Many of its fundamental legal principles have their origins in the codified systems of continental Europe (particularly France and Germany), as well as common law countries (including English law) and traditional Thai law.
Thailand does not recognise the common law principle of binding judicial precedent. However, certain persuasive decisions of the Supreme Court are published in the Supreme Court Law Reports.
The principal law of Thailand is the Constitution. This is supplemented by Acts of the Thai legislature, Royal decrees, emergency decrees, ministerial regulations and notifications, other governmental notifications and local government regulations. The major codes are the civil and commercial, penal, civil procedure, criminal procedure, revenue and land.
In accordance with principles set out in the Act on conflict of laws, foreign law may serve as the law governing the case. It must however be proved to the satisfaction of the court that the foreign law is not contrary to public order or good morals, otherwise the court will apply Thai law.
Although Thai law does not provide for the direct enforcement or recognition of foreign judgments, such judgments and evidence can be used as evidence in a new trial commenced in the appropriate Thai court of jurisdiction.
The Thai system of jurisprudence is dualistic. The fact that Thailand has entered into a treaty or convention with a foreign country does not automatically give the provisions of such treaty or convention the force of law within Thailand. Treaties are not law within Thailand until they are made law by legislative enactment, such as an Act, Royal decree or ministerial regulation.
Laws are normally drafted in broad terms, especially those regulating commercial activities. Broad powers are delegated to government ministries or organisations, which are empowered to issue notifications or regulations.
The Thai legal profession does not divide lawyers into different groupings, as is the practice in some jurisdictions where lawyers are designated as solicitors and barristers. Lawyers in Thailand act as both solicitors by preparing litigation and evidence for trial and as barristers responsible for filing suits, pleadings and petitions.
Arbitration
Arbitration presents itself as an attractive alternative to litigation in Thai courts due to: procedural flexibility; parties’ degree of control over formation of the arbitral tribunal; freedom to select language of dispute; and parties’ ability to play a more pronounced role in proceedings. Although no official figures exist with respect to the number of arbitrations in Thailand, it has undoubtedly become a popular dispute resolution tool and is a common feature in commercial contracts involving at least one Thai party.
The most recent development of significance pertaining to Thai arbitration was the enactment of the Thai Arbitration Act B.E. 2545 (2002). This replaced the 1987 Act, which had been widely criticised because it insufficiently harmonised the principles of international arbitration law and the UNCITRAL Model law on International Commercial Arbitration.
The Act was also drafted to encourage settlement of disputes in international civil and commercial matters through the arbitration process. In this regard, the Act sets the same standard for enforcement of both domestic and international arbitrations in order to promote investment at both domestic and international levels. As such, under the Act, when an award is enforced in Thai courts, parties and judges do not have to apply a double standard differentiating between domestic and international arbitration awards.
ADR office the Thai Arbitration Institute (TAI), which sits under the Office of the Judiciary, is the most active arbitration institute in Thailand. It utilises a non-intervention policy, providing safeguards from any domestic political interference, even where one of the parties to a dispute is a governmental agency. The TAI is extremely cost efficient and provides parties with modern technological amenities. Although most arbitral proceedings conducted at the TAI are governed by its arbitration rules, the TAI also provides services to arbitral proceedings conducted under other arbitration rules, as well as in ad hoc arbitrations.
As Thailand is a party to the Geneva Convention and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, foreign arbitration awards rendered in nations that are also signatories are fully enforceable. Numerous foreign arbitral awards have been enforced in Thai courts and the grounds to challenge such enforcement proceedings are primarily limited to procedural objections relating to the underlying arbitration proceeding.