Trade Disputes in Thailand

Common questions about Trade Disputes Litigation in Thailand

Can foreigners enter into contracts with Thai nationals?

Foreigners, both natural or legal entities (juristic persons) may enter into contracts and establish contractual relationships with Thai nationals. The place where the obligations of the contract are to be discharged may be the country of residence of any such foreigner, and the employees of the parties carrying out the obligations may be mainly non-Thais who do not reside in Thailand.

Are written contracts enforceable in Thailand?

Written contracts will generally be enforced in Thai courts using similar principles to those that exist in western countries.

Can any jurisdiction be used in a contract with Thai companies?

It is possible to include a term making specific reference to this in a contract, and it would most likely be enforceable, but the jurisdiction should be in some way connected with the subject matter of the agreement or with one of the parties. Terms specifying the use of foreign courts to resolve disputes may also be included and are usually enforceable, however, they are of little practical application since the judgements of foreign courts are not enforceable in Thailand. Note however that:

Foreign judgements may be used in evidence if a separate legal action is brought in Thailand
Foreign arbitration awards are enforceable

Is arbitration possible in Thailand?

Assuming both parties agree or there is a specific provision in the contract to the effect that any dispute must be referred to arbitration.

Who can bring a civil action for a trade dispute in a Thai court?

Any natural or juristic person may bring a civil action in Thailand, subject to statutes of limitations. Note that, assuming the applicant is a foreign national and not domiciled in Thailand, one or more of the following conditions must apply:

The subject matter of the action is located in Thailand
The potential defendant is domiciled in Thailand - i.e. is physically present in the Kingdom, or has done business or been represented there in the 2 years immediately before the action is commenced

Where are complaints for trade disputes initially filed in Thailand?

Dependent on the nature of the claim, generally, in writing to either:

The Court of First Instance within the jurisdiction of the defendant's residence, or the jurisdiction where the cause of action arose
The Central Intellectual Property and International Trade Court in Bangkok, if the applicant is a corporation or other legal entity registered or residing outside Thailand

What must be contained in the claim?

The nature of the claim must be clearly stated, as must the allegations that form the basis of the claim and the damages sought.

What is the fee payable for filing a civil claim?

For claims not exceeding 50 million baht, the court requires a fee of 2% of the estimated claim amount upon filing up to a maximum of 200,000 baht. The losing party is usually ordered by the court to pay this fee.

Are legal fees recoverable?

Lawyers' fees are normally awarded to the prevailing party but are usually not fully recoverable, since the Thai legal system views lawyers fees and other expenses incurred in enforcing a claim as not being damage arising directly from the breach or misconduct of the other party. The court also has discretion to designate the award of fees to either party, and will take into account factors such as the difficulty of the case, the time spent and the amount of work carried out in litigation. In the award of fees the court is also bound by the minimum and maximum rates prescribed in the Civil Procedure Code.

How long will litigation for a trade dispute usually take?

The length of time for a case to be resolved varies according to the complexity of the issue. Although it is technically feasible for a judgement to be rendered within six months of commencement of action, it is not uncommon for even relatively uncomplicated trials to last more than a year in Thailand. Generally, the first hearing will be held approximately three months after the action is brought and short hearings will be scheduled once or twice a month thereafter. It's worth noting that hearings of the Intellectual Property and International Trade Court are statutory and required to be held continuously. They are usually, therefore, resolved far more quickly. On average, most cases are concluded within a year.

Is it possible to appeal a judgement?

With the complete absence of juries in either criminal or civil cases in Thailand, appeals may be made on the basis of both fact and law. Appeals made to the Appeals Court (the first court of appeal), however, may only be made on issues of fact (as opposed to issues of law) if the amount in dispute is greater than 50,000 baht. Applicants may further appeal to the Supreme Court (the highest court of appeal), but only on questions of fact if the amount in dispute exceeds 200,000 baht. Appeals must be made within a month of judgement, unless the applicant can show reasonable grounds for an extension. Note that decisions by the Intellectual Property and International Trade Court (and other courts of special jurisdiction) may be appealed directly to the Supreme Court.

How long is an appeal likely to take?

Appeals in both the Appeals Court and the Supreme Court are likely to take up to 3 years in each court.

Can an applicant to appeal delay the execution of a judgement?

If a party to an appeal asks for a stay of execution, it will normally be granted if the applicant deposits sufficient security with the court. This will usually be the amount of the judgement plus an estimated amount of interest for the period of appeal.

How can judgements be enforced in the event of default?

An application is made to the court to appoint an execution officer who will gather details of the debtor's assets. Such assets can then be attached and liquidated to the extent they satisfy the judgement. It should be noted that the onus is on the creditor to locate these assets and, for this reason, an investigation of assets before the commencement of action is prudent.