The resolution of trade disputes in Thailand requires a solid understanding of both local laws and international trade regulations. This guide explores common types of trade disputes, resolution methods, and strategic considerations.
Disputes regarding debt collection, intellectual property rights, and consumer complaints can arise in businesses in Thailand. Generally, litigation for these disputes takes longer than out-of-court dispute settlement procedures.
Commercial Disputes
Commercial litigation in Thailand covers a broad range of topics. It includes contract disputes, debt collection, corporation and partnership controversies, consumer fraud, insurance claims, and intellectual property contests. Courts in Thailand generally encourage a peaceful settlement to these disputes through alternative dispute resolution methods like arbitration or mediation.
Litigation in Thailand can be lengthy, and can take from 12 to 18 months for a case to reach final judgment. This delay is largely due to the need to obtain witness testimony and other evidence, which may require extensive travel and other expenses.
The courts of Thailand are regulated by the Constitution and laws, which ensure judicial impartiality in trial proceedings and adjudications. Judges are not allowed to have a vested interest in the case or a relationship with one of the parties, and they must adhere to strict code of ethics regarding maintaining their independence. They must also ensure that trials and judgments are conducted swiftly, and that all parties are treated fairly.
Arbitration is a popular alternative dispute resolution method in Thailand. The country is a long-standing member of the New York Convention, which allows for foreign arbitral awards to be enforced within its territory. This makes it a preferred venue for international arbitration. However, it is important to note that there are some disputes that cannot be resolved through arbitration, including criminal matters and family law issues.
Intellectual Property Disputes
Intellectual property law is a core aspect of Thailand’s economy. The country’s Patent Act grants inventors exclusive rights to their inventions for a period of 10-20 years. Its Trademark Act provides for the registration of trademarks and service marks, which are protected for 10 years from the date of filing. And its Copyright Act safeguards authors’ works, protecting them for the life of the author plus 50 years. Understanding these and other IP laws is a key consideration for foreign investors.
Unfortunately, Thailand faces a number of challenges when it comes to protecting its IP rights. These include the prevalence of counterfeit goods, corruption, and a general lack of awareness about IP rights. To counter these issues, companies investing in Thailand should implement a comprehensive IP strategy that includes registering their IP rights, working with local legal experts, and educating employees and customers about the importance of IP protection.
IP rights holders can also take advantage of the Thai Customs Act to prevent the import and export of IP-infringing goods. The Customs Department plays a crucial role in this area and regularly seizes products, including counterfeited trademark and pirated copyright goods. The government’s efforts to combat intellectual property infringement have helped the country maintain its global position as a top investment destination, and its proactive enforcement has made it more difficult for infringers to do business in Thailand.
Arbitration Disputes
While commercial disputes may be inevitable, businesses can mitigate risks by ensuring the terms of their contracts include a Thailand dispute resolution clause. This allows parties to decide on a process for the resolution of any disagreements before they become legal issues that can jeopardize business operations in Thailand.
Dispute resolution in Thailand is typically achieved through the arbitration procedure, which is an alternative to court litigation. The timeframe for settling disputes through arbitration can vary, depending on the arbitrator and disputing parties. However, on average, out-of-court arbitration proceedings take one year on average before a resolution is achieved.
Arbitration is a common method for resolving disputes in Thailand, especially those related to labour disputes. However, it is important for foreign businesses to have a comprehensive understanding of local laws and regulations when addressing disputes with employees in Thailand. Issues like termination, discrimination, and employee rights are regulated by specific statutes in the country. Additionally, navigating labor disputes in the country requires cultural sensitivity and awareness of local practices that can impact negotiations and settlements.
In the past, in-court arbitration in Thailand was not highly encouraged by the courts, but it is becoming increasingly popular. It is common to see that arbitration clauses are included in contracts for various industries in the country, including those related to the banking and finance, technology, and insurance sectors.
Court Disputes
Court disputes in Thailand are resolved by trial on the merits. The court will render a final judgment that sets out the particulars of the case and a statement of the grounds for its decision. The court cannot issue a summary judgment, and motions to dismiss based on legal questions are rarely granted. In cases with several claims, the court may at its discretion or upon a request of an interested party, order that all or any of the claims be determined by arbitration.
Civil cases in Thailand typically begin with the plaintiff filing a complaint with the relevant court. Depending on the nature of the dispute, the court may require the parties to participate in mediation at an early stage, such as in labour and family disputes. Increasingly, courts are requiring participation in mediation even in general civil cases where it is not legally mandated.
In the course of a trial, the court will hear evidence from the parties and examine witnesses. The court may also issue a summons to produce documents or other materials. Hearings and trials in Thailand may be conducted via videoconference, at the court’s discretion or upon the parties’ request.
The Supreme Court has consistently held that contingency fee arrangements without a legal interest in the litigation are contrary to public policy and therefore unenforceable under Thai law. However, there are still a number of rulings that allow for such arrangements.
