Arbitration in Thailand Part I 泰國仲裁I
Type of Arbitration 仲裁種類
1) In-Court Arbitration vs. Out-of-Court Arbitration
庭內仲裁 與 庭外仲裁
1.1)In-Court Arbitration is when a case is pending before court of First Instance, under the parties’ agreement, an arbitrator can be made with the approval of the court (Section 210-220 and 222 under Civil Procedure Code). But this method is not popular because when the case has gone to court, the parties do not want another person to help making decisions other than judge.
1.2) Out-of-Court Arbitration is in the case that the parties agree to propose a dispute to the arbitrator without prosecution, which may be agreed in advance before there is a dispute, or may be agreed after the dispute has been raised.
Most of the international arbitration, including Thailand, is out of court which is subject to Arbitration Act B.E. 2545.
2) Ad hoc arbitration vs. institutional arbitration
2.1) Ad Hoc Arbitration is the case which the parties resolve to settle issues of the dispute by selecting an arbitrator, without involvement of any arbitral institution. The chosen arbitrator will judge the case.
2.2) Institutional Arbitration is the case which the parties agree to settle their issues in dispute under an arbitral institution. Such institutions may only provide arbitration services in Thailand. There are three arbitral institutes in Thailand, which are Thai Arbitration Institute (TAI), Office of the Arbitration Tribunal of the Board of Trade of Thailand, and Thailand Arbitration Centre (THAC). There are also international arbitral institutions such as International Chamber of Commerce (ICC), American Arbitration Association (AAA), and specialized organization being adopted in Thailand such as SEC arbitration, Thai Bond Market Association arbitration, and NASD arbitration.
3) Domestic Arbitration vs. Foreign Arbitration
3.1) Domestic arbitration refers to a dispute which is between native parties and is
without any “foreign-related” factors.
3.2) Foreign arbitration refers to a dispute handled by foreign arbitration institution.
Followings are reasons dispute parties go for arbitration:
1) The duration of the process
Any party can file an appeal if he doesn’t agree with a lower court’s decision, but the next petition is time-consuming. However, the arbitration process can be done quickly without complicated procedures (if settled within the arbitration).
2) The complexity of the case
An arbitrator chosen by the parties is often knowledgeable and well-versed in handling dispute, who possibly can understand the dispute and the evidence quickly. This can lead to a fast and fair arbitration. On the other hand, if a case is handled in court, the parties cannot choose a judge who is an expert of the case, which will require experts and witnesses to testify and making the trial more difficult and more time-consuming as everyone needs to listen carefully to what the expert’s witnesses have said.
3) Protect your reputation and privacy
In most cases, the judicial proceedings must be made openly, which means the public can attend court hearings and the mass media may easily access to the sources of the news. Subsequently, the news may adversely affect the business image and confidentiality of the trade secrets. However, the principle of the arbitral proceedings is keeping the case private, only the parties and involved people are eligible to be attended. It protects the reputation and business secrets of the parties.
4) Maintain the relationship between the parties
The action of filing a law suit is tightening the relationship and the parties feel hostile. It is also like a long-term war because the case can be appealed to higher court, which may negatively affect their business relationship. But the arbitration process is a dispute resolution that allows the parties to face and negotiate the issues in dispute directly. The atmosphere during negotiation is more friendly and there is no system for the parties to argue and win. Thus, it enables the parties to maintain the business relationship as most of them will continue to cooperate in the future.
Arbitration law and procedure regulated by the Thai Bond Market Association
When preceding an association's arbitration procedure, the Arbitration Law shall be adopted, which is Arbitration Act B.E. 2545, in accordance with the announcement of the board of the Thai Bond Market Association on Arbitration No. 2.
The Association's Arbitration Procedure
(1) People who have rights to propose
Such as members of association members and the parties.
(2) Disputes that can enter into arbitration agreement
It must be a dispute arising out of or in connection with a contract between members or a member and a client.
(3) How to file a dispute
Submit a Statement of Claim to the association in the specified form
(3.1) If the form is incomplete or unclear, the association will notify the petitioner to adjust it within 30 days from the date of receipt such notice.
(3.2) If the form doesn’t need amendment, the association will send a copy of request together with various documents and evidence to the other party to submit a Statement of Defense within 30 days from the date of receipt of a copy of the dispute proposal.
If one party wishes to have mediation by one of the association's arbitrators before starting the arbitration process, the association will ask the other dispute party whether to accept it within 15 days from the date of receiving the notice from the association.
If the parties do not accept within the requested time, the association will proceed with the arbitration procedures.
If the mediation is successful, a compromise agreement must be made and signed by
the parties. But if the mediation is not successful, the matter can be brought back to
(5) Appointment and Opposition to Arbitrators
(5.1)Appointment of arbitrator
There shall be 3 arbitrators to be the arbiter, containing one person selected by the Association's committee from the list of arbitrators, and two people appointed by the parties, who can be from the arbitrators list.
(5.2) Challenge of arbitrator
The parties may submit a letter of objection to the arbitration when there is reasonable doubt of justice within 15 days when knowing or should have known such situation. But the submission must be made before the date when the arbitrator closes the hearing.
The arbitral tribunal must complete the award within 180 days from the date of appointing the last arbitrator, unless he receives both parties’ agreement.
(7) The Arbitrator fees rate of the TAI
The parties pay as follows: 雙方支付的金額如下
(7.1) Fee at the rate of 1% of the disputed amount but not more than 10,000 baht.
(7.2)Arbitration compensation based on various rate according to the disputed amount as follows:
Not more than 500,000 baht, the rate is 2.5% but not less than 10,000 baht.
500,001 baht - 1,000,000 baht, the rate is 2.0% but not less than 12,500 baht.
1,000,001 baht - 5,000,000 baht, the rate is 1.5% but not less than 20,000 baht.
5,000,001 baht - 10,000,000 baht, rate 1.0% but not less than 75,000 baht.
10,000,001 baht - 50,000,000 baht, the rate is 0.5% but not less than 100,000 baht.
More than 50,000,000 baht, the rate is 250,000 baht.
In addition, in calculations, if calculated as a fraction, round up to the full amount.
The parties who go to arbitral tribunal shall place the security deposit, fee and compensation for the arbitrators in the amount determined by the board of directors within 15 days from the appointment of the chairman of the arbitral tribunal.
(9) Request for Termination of Arbitration
At any time from the date of submitting the dispute and before the arbitration award, a party or both parties may submit a request to terminate the arbitration process. The applicant has the duty to pay compensation and expenses incurred or in the case that the parties collectively petition, the person who is responsible for the payment of remuneration and expenses shall be determined.
(10) Enforcement of the arbitration award
The enforcement of an arbitration award doesn’t relate to arbitration organizations. It is necessary to use judicial process to request the court to perform the enforcement of the award. Usually, the court will inquire whether the judgment is made correctly and opportunity for objection is only on the grounds stipulated by law. If the court thinks that the grounds for objection is not convincible and the award is actually made, the judgment will remain the same without judging the content of the deciding matter.
Relevant laws 相關法令
- The Arbitration Act B.E. 2545佛曆2545年《泰國仲裁法》
- Code of Civil Procedure《泰國民事訴訟法》
- Announcement of the Board of Thai Bond Market Association on Arbitration
- Statement of Claim 起訴狀
- Letter appointing an agent to proceed with the consideration代理人委任狀
- Appointment of arbitrator 仲裁員委任狀
- Statement of Defense被告答辯狀
- Challenge of arbitrator 申請仲裁回避
- Contract or agreement for settlement of disputes by arbitration