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Arbitration in Thailand

Like many other countries, Thailand encourages using Alternative Dispute Resolution (ADR) to resolve disputes before a court formally hears the matter. In fact, Thailand has established an Office of Alternative Dispute Resolution under the Office of the Judiciary to oversee the use of ADR in the country.

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Alternative dispute resolution (ADR) 

Pursuing litigation is a legitimate approach to resolving public and commercial disputes. With the influx of joint public and private investment, new ventures, and personal property acquisitions in Thailand, litigation has inevitably increased. These contradictions lead to the clogging of court cases. Due to the heavy caseload in the judicial system, it takes longer to resolve cases.

ADR - dispute resolution mechanism

ADR is any mechanism used to resolve disputes, not to resolve a dispute in court. ADR is welcomed because the judiciary understands that the longer a conflict lasts, the more damage it does to the parties and the economy. This gives the parties to the dispute the right to decide the fate of their conflict rather than forcing the courts to rule on their differences.

Arbitration and mediation

Arbitration and mediation are two forms of alternative dispute resolution used by the judiciary to ease congestion in court cases. Arbitration requires the selection of a third party (to be called an Arbitrator) who will hear the dispute and make a legally binding decision. Mediation, on the other hand, involves the assistance of an unbiased mediator who will help the parties reach a mutually acceptable agreement. Mediation is often resorted to in cases of small claims where legal costs may be higher than the fees.

The Office of the Judicial Branch funds mediation and the parties in mediation incur minimal costs. The mediator plays a vital role in the process. It maintains peace between the parties and helps them work out a solution that will benefit them mutually. An agreement between the parties is reached after mediation. The contract should include all the conditions the parties must fulfill after the mediation. If one of the parties fails to comply with the agreement, the other party can go to court to enforce the mediation agreement.

Unlike Arbitration is used in high-value business disputes. Unlike mediation, arbitration parties will incur higher costs, such as arbitrators and agency fees. Since 2002, Thailand has followed the UNCITRAL Model Law on International Commercial Arbitration to establish its arbitration mechanism. Currently, it has the same framework for domestic and international Arbitration to avoid complications in interpretation and enforcement.

The current arbitration procedure in Thailand gives the parties the autonomy to determine the procedures they consider to be most effective. It also ensures that parties have a reasonable opportunity to have their claims and arguments heard. Since 2000, foreigners can also act as arbitrators. Foreign lawyers can also represent their clients in arbitration proceedings. Arbitration is increasingly attracting attention in Thailand. In addition to the business sector, some government organizations have also used this mechanism to reduce possible litigation in Thailand, such as the Department of Insurance, the Department of Intellectual Property, and the Security and Exchange Commission.

Court and Arbitration

The court shall be responsible for the enforcement of Arbitration Agreements if the parties' agreement so provides. It shall decide the case filed if it confirms that the parties have reached an agreement. The court may appoint an arbitrator if the parties have yet to make an appointment. Although arbitration agreements cannot be regarded as legal precedents, the courts and the judiciary have certainly considered the importance of Arbitration and the essential role of arbitration tribunals.

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Update: 13-02-2023
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