Trade disputes are an inevitable part of global commerce, and they can have significant commercial and diplomatic ramifications. However, by understanding the different resolution mechanisms and seeking professional guidance, businesses can minimize their impact.
Alternative dispute resolution methods are generally quicker and more cost effective than litigation. These include negotiation and mediation.
Negotiation
In some instances, trade disputes can be resolved through negotiation. In fact, arbitration and mediation are popular methods of dispute resolution and feature in most commercial contracts. The THAC Mediation Centre is an example of one such venue.
Negotiations in Thailand may be intense and time consuming. A good rule of thumb is to leave yourself sufficient room for concessions, as prices oft en fluctuate greatly during the bargaining stage. Negotiators should also be mindful of cultural influences, as many Thais employ a polychronic work style and may jump back and forth between topics rather than addressing issues in sequential order.
Trade disputes can result in reduced exports as trading partners impose tariffs or non-tariff barriers. This can disrupt supply chains and raise production costs for companies in Thailand. The country has established trade remedy laws, including anti-dumping and countervailing duty measures, to address unfair foreign trade practices. It has also implemented intellectual property rights regulations.
Mediation
Mediation is another method of dispute resolution that can be used to settle trade disputes. It has a positive effect on relations between parties and can save time, energy and cost of legal proceedings.
DFDL has a team of experienced mediators, who can assist clients with settling their disputes. A court-annexed mediation can be conducted while a case is still pending in the courts, and it can also be used during the legal proceedings itself.
However, it is important to remember that mediation can only be effective if all participants in the process are willing to compromise. It is not a good idea to enter into mediation with predetermined bottom lines, as doing so can limit your flexibility and ability to benefit from the process. A clear definition of the conflict is necessary, and participants should assess litigation costs realistically. This way, they can make an informed decision about whether or not to proceed with the process.
Arbitration
The parties can agree to settle disputes by arbitration, a procedure that is more flexible than litigation. This stipulation can be made at the time of preparing a contract, or after a dispute has arisen.
The out-of-court arbitration regime in Thailand is governed by the Arbitration Act B.E. 2545 (2002), which is a comprehensive redrafting of the UNCITRAL Model Law on International Commercial Arbitration with certain Thai specific additions. Under the 2002 Arbitration Act, an arbitration agreement can be included in a contract or drafted as a separate agreement.
Arbitrations are generally conducted by a tribunal of one or more arbitrators. For less complex and lower value cases, a single arbitrator is often sufficient; however, higher value and more complex disputes may require a three-arbitrator panel. An arbitration award is binding on the disputing parties and is enforceable in court. Arbitration is a popular and effective method of resolving trade disputes in Thailand. However, the process of enforcing an arbitration award can be lengthy and requires careful consideration.
Court Litigation
When negotiation and conciliation fail to resolve a trade dispute in Thailand, a plaintiff may file a civil lawsuit before a local court. The case must be filed in the jurisdiction where the cause of action arose or where the defendant has its domicile. The court requires all documents submitted to be in Thai language or certified copies of the originals. A claimant will also have to pay a court filing fee when submitting a lawsuit.
The court must render its judgment within one year of receiving a case. However, unforeseen circumstances could prolong the duration of a court case.
As an alternative to court litigation, a trade dispute in Thailand can be settled by mediation and arbitration. Mediation and arbitration are common dispute resolution processes and are often included in a commercial contract. However, choosing the right dispute resolution procedure depends on a number of factors, including the nature of your business and potential disputes.
