While Thailand is not a particularly litigious society, an increasing number of disputes are being resolved through mediation and arbitration. The courts encourage conciliation of cases and there is a specific system for court-annexed mediation in the Office of the Judiciary.
Disputes involving commercial businesses can range from debt collection to intellectual property issues and shareholder disagreements. Litigation is expensive and time consuming and sets legal precedents.
Alternative Dispute Resolution (ADR)
In Thailand, there are several arbitration institutions such as THAC and TAI. Both are active in promoting arbitration. THAC, in particular, is an international institution and has modern facilities. Located in a busy part of the city, it offers lectures and seminars to promote arbitration. It also has strong connections with the Ministry of Justice, allowing it to initiate changes in laws and make Thailand more arbitration-friendly.
Mediation is another method of Thailand dispute resolution that is increasingly popular in Thailand. It provides a way to settle disputes without the intervention of courts and is usually conducted in a more informal setting than court proceedings, with no need for translation. In addition, it is generally conducted on a confidential basis. This is particularly beneficial for renowned public figures and businesses who may wish to keep their dispute private.
Arbitration in Thailand is also an effective way to resolve disputes. However, it typically takes on average one year to reach a settlement. Moreover, the cost of arbitration is often higher than other forms of dispute resolution. Arbitrators are paid a fee for their services, and they must be licensed in order to conduct arbitration. Additionally, foreign arbitrators must obtain a special work permit to be allowed to operate in Thailand.
During mediation and arbitration, the presiding judge can facilitate a compromise between parties by convening closed-door sessions with a conciliator from outside the court or a reconciliation service provider. In these sessions, the conciliator will not discourage the presence of a lawyer on either side.
Conciliation
In Thailand, although historically a predominantly litigious society, it has become common practice to use mediation and arbitration as an alternative to traditional litigation. This is partly due to the heavy workload on the courts, which results in a clogging of court dockets and long delays in case resolutions.
Civil courts are empowered under the Civil Procedure Code, originally enacted in 1935, to order conciliation before trial where they deem it appropriate or with the consent of the parties. This has led to a significant increase in the number of cases settled through conciliation in all the civil courts, and even at the appellate level. It is also widely used in family, labour and intellectual property and international trade courts.
In out of court conciliation, disputing parties designate an agreed-on mediator or make use of the services offered by the Thai Mediation Center. The process typically takes one year on average before dispute settlement is achieved. However, the timeframe is not regulated by law and it depends on how much work is assigned to the arbitrator.
In addition to reducing court workload, mediation and arbitration offer a number of advantages over litigation. For example, the cost of resolving disputes by this method is much lower than that of traditional litigation, and it is possible to reach a more satisfactory settlement that is mutually acceptable to all parties.
Arbitration
In general, Arbitration is a more expedient dispute resolution process than court litigation and also allows parties to select an arbitrator with in-depth expertise in their respective fields. Moreover, it is highly confidential as all information and evidences presented in the arbitration proceeding are kept private. This is especially beneficial to renowned public figures and businesses as it helps protect their reputation.
However, despite its benefits, arbitration has been hindered by several issues in Thailand. First, the legal framework governing the procedure of arbitration should be further enhanced and aligned with international best practice. Second, the courts should be more receptive to in-court arbitration cases and support it as a viable method of settling disputes in the country.
Further, THAC and TAI should consider adopting measures to improve the efficiency of arbitration proceedings in the country. In particular, they should ensure that their IT systems are updated and user-friendly so as to disseminate information more efficiently. Further, they should introduce measures to prevent guerilla tactics such as challenging the appointment of arbitrators or parallel proceedings from being used by opposing parties to delay and disrupt the arbitration process.
Finally, a more clear-cut policy on the recognition and enforcement of awards in Thailand should be established. It would be a step forward if the Thai Government were to clarify whether the judgment of a foreign court on the same subject matter would be binding in Thailand, and to streamline the process for foreign arbitration practitioners to obtain work permits.
Litigation
In some cases, such as labour disputes and certain civil matters involving compoundable offences, the court may mandate participation in mediation. For other cases, the court will allow parties to participate in mediation, even where it is not a mandatory part of proceedings.
The Thai judicial system is not adversarial. Rather, the courts use an inquisitorial process, where they review evidence and argue both sides of the case to make a final decision. In class action proceedings, the court will consider whether a class of persons have suffered the same loss. The judgment of the court will bind all members of that class, unless they choose to opt out.
While the judiciary in Thailand is not an independent branch of government, it ensures a balance of power by providing for internal and external checks on the integrity of judges. The courts allow for appeals of their decisions and, in the case of corruption, there is a system by which an independent organisation can investigate judges.
Baker McKenzie has a strong litigation and dispute resolution practice in Thailand with a deep bench of experienced litigators. Its team advises on a broad range of disputes, including commercial, labour and insurance issues. It also has expertise in arbitration and class actions, combining with the firm’s market-leading IP team on patent and copyright matters.
