As Thailand’s economy continues to grow, more and more disputes are being settled outside the classical judicial system. Alternative dispute resolution mechanisms include mediation, arbitration and conciliation.
Arbitration is similar to a trial, but it’s conducted outside the court system. Parties select an arbitrator or panel and the arbitrators review evidence and arguments before rendering a binding decision known as an arbitral award.
Alternative Dispute Resolution (ADR) has emerged as a key player in the Thailand dispute resolution landscape, backed by a robust legal framework, international recognition, institutional support, and cultural acceptance. At a recent ADR event held in Bangkok, Withersworldwide partner Sharon Lin led a panel discussion on the various factors driving Thailand’s growing prominence as an ADR hub in Southeast Asia.
Traditionally, people in Thailand who are involved in a dispute often seek the help of natural leaders to amicably reconcile their differences. The government encourages this practice by providing funding to community-based ADR initiatives, and also offers mediation services inside the courts through the Alternative Dispute Resolution Center, the Ministry of Justice’s Mediation Centre, the THAC Mediation Center, and other agencies.
The ADR process can be less formal than court proceedings, but the arbitrator still has to meet with both sides in the case and hear each side’s argument. The arbitrator then makes a ruling on the dispute. This decision can be binding.
Arbitration in Thailand is a popular method of dispute resolution for companies and individuals with international trade and intellectual property issues, as the process allows them to avoid litigation and potentially save costs. The ADR procedure can also be tailored to specific needs, such as a private arbitration to protect reputations and prevent disclosure of sensitive information.
Litigation is a common means of dispute resolution in Thailand and involves the formal process of filing a lawsuit or defending against one. Plaintiffs assert a legal claim against defendants that they believe have wronged them, and the court renders a binding decision based on Thai law and the evidence presented in the case.
The legal system in Thailand is adversarial, which means that both sides have the right to present and rebut evidence in a trial. Courts also actively manage the case and make numerous procedural decisions throughout the trial. The court may even search for additional facts in a lawsuit by questioning witnesses or examining documents. In class action litigation, the court’s decision binds the plaintiff and all other members of the class who did not opt out of the lawsuit.
In general, the high volume of cases in courts in Thailand leads to lengthy trial durations and a backlog in case resolutions. The high burden on the judges and court staff may also result in them not being able to provide an adequate level of service. The CPC provides for some mechanisms to address these problems such as requiring mediation before witness hearings and disjoinder (separation of the case into several claims).
There are no laws directly prohibiting litigation funding in Thailand; however, Supreme Court precedents have established that seeking benefits in return for investing in other parties’ litigation is against public order and morality. There are also rules and codes of conduct for judges which set out guidelines on maintaining impartiality and independence, with disciplinary sanctions for breach.
Arbitration is a form of Thailand dispute resolution that consists of an independent tribunal hearing both sides of the case and rendering a final judgment. The judgment of an arbitral award is binding on the parties unless one party challenges its jurisdiction or a party seeks a court order for recognition, enforcement, or setting aside the arbitration award.
Unlike courts, where proceedings are held in public, arbitration proceedings take place in private settings. This helps keep the information, evidences, statements, and arguments kept confidential. This is especially important to renowned businesses and individuals, as it can help preserve their good reputation. It can also save time and resources as compared to the lengthy process of a trial with its juridical protocols.
The disputing parties can decide on a single or three arbitrators. If the disputing parties cannot agree on the number of arbitrators, the Thai arbitration institute will present both sides with a list of potential arbitrators. Each side can then remove the names of the arbitrators they do not prefer and add the names of those they prefer. The Thai arbitration institute is then responsible for appointing the most favorable arbitrator.
A significant hindrance to the rise of arbitration in Thailand is the lack of training on what arbitration is and is not. Despite this, the government is starting to promote arbitration and encourage disputes to include out-of-court arbitration clauses.
Aside from litigation and arbitration, conciliation is another means of dispute resolution in Thailand. It is a form of negotiation that supports the resolution of disputes through a deliberate focus on shared interests by the parties. This approach is especially suited for the aviation and IT sectors, where it is common to find disagreements concerning a variety of issues such as contracts, intellectual property rights, and employment.
Unlike litigation, which is an adversarial process where each party presents its case to a judge who generally does not have expertise on the specific case, conciliation is a process that allows the parties to select an arbitrator or panel of arbitrators based on their level of experience in the specific subject matter of the dispute. As such, conciliation is usually friendlier and less hostile to parties’ relations, making it more likely that the disputed matter can be resolved amicably.
Conciliation is a mandatory step before witness hearings in some of the Courts of First Instance, and the chief trial judge may also facilitate a settlement through conciliation if he/she deems that the issue is a simple one. In a typical conciliation, the disputing parties will be given a list of potential arbitrators whereby each party can remove the names of those they do not prefer and add the names of their preferred ones to the list. The Thai arbitration institute is responsible for the final designation of an arbitrator.