Disagreements over trade policies, tariffs and quotas can lead to conflict. Other issues can include dumping, which occurs when one country exports goods below market price harming domestic producers in the importing country.
The timeframe for settling disputes through arbitration is not regulated, and on average out-of-court arbitrations take one year to reach a settlement. Arbitrators charge a fee for their services, typically on a contingency basis.
Negotiation
A commercial dispute can be a significant obstacle for business. Often, the most effective way to resolve disputes is through negotiations. This is particularly true in international trade where a variety of factors can lead to disagreements. However, disputes can also be resolved through arbitration or other forms of alternative dispute resolution. These methods are less costly and time-consuming than a traditional court trial.
Disputes between trading partners are common and can arise from many different issues, including differences in tariffs, quotas, market access, and competition policies. As a dynamic participant in global trade, Thailand is frequently subject to such disputes. Resolving these disputes quickly promotes economic stability, maintains positive trade relations, and ensures compliance with international agreements.
The most common methods of dispute resolution in Thailand include negotiation and mediation. These are popular modes of dispute resolution and feature in most standard arbitration clauses in commercial contracts. Aside from these, parties can choose to engage in arbitration that is uniquely tailored to their specific needs by selecting the arbitrators, institution, and venue.
Litigation is another option for resolving disputes in Thailand. Court trials are more expensive than other methods of dispute resolution, but they offer the advantage of setting legal precedents and establishing binding judgments that can be enforced by law. It is important to note that the use of litigation as a remedy can be damaging to relationships between disputing parties.
Arbitration
Arbitration is a form of dispute resolution that is conducted outside the court system. Parties in a dispute select an arbitrator or panel to hear their case, review evidence and arguments, and then make a binding decision called an “arbitral award.” Arbitration is generally faster and less expensive than litigation. It also allows parties to select an arbitrator with expertise in the subject matter of their dispute, ensuring that the arbitral award will be binding and enforceable.
Negotiations between Thai companies and foreign companies often require special skills. Having a strong relationship-oriented culture, Thai negotiators tend to focus on building trust and seeking win-win solutions. However, aggressive negotiation tactics (e.g., extreme openings or attempts to make the other party lose face) may backfire and damage the relationship.
It is important for international companies that trade in Thailand to have a robust dispute resolution process in place. While cross-border agreements typically name jurisdictions such as New York, England or Singapore as the litigation setting, this approach is impractical for disputes involving assets in Thailand, given that foreign judgments are not enforceable in Thailand.
In addition to arbitration, mediation and other forms of alternative dispute resolution are effective tools in resolving trade disputes in Thailand. Our lawyers can help you understand the nuances of these processes and recommend a strategy for your specific situation.
Mediation
Businesses can find themselves in a variety of trade disputes, from debt collection to intellectual property disputes. In these cases, parties can use mediation as a way to settle their differences. The mediator will ask each party what they disagree about in the dispute and find ways to resolve those issues. Using mediation can save time and money and prevent damaging relationships between the parties.
A large number of commercial disputes in Thailand are settled through negotiation or arbitration. These are popular methods of dispute resolution and frequently feature in arbitration clauses in contracts. These methods also allow parties to choose an arbitrator or panel whose expertise is relevant to their case, which can guarantee the quality of the resolution and speed up the process. Furthermore, arbitral awards are enforceable in Thailand.
However, it is important to understand the nuances of the Thai legal system before proceeding with an arbitration or mediation case. For example, a successful argument against the validity of an arbitration award may require an experienced local lawyer to prepare and present it in court.
It is also important to remember that Thailand has a strong relationship-oriented culture and that negotiations can be a powerful tool in resolving trade disputes. However, it is important to avoid aggressive tactics such as extreme openings or attempting to make the other party lose face, which can backfire and damage the relationship between the parties.
Courts
The judiciary in Thailand is a vital institution that safeguards intellectual property rights and resolves international trade disputes. Its specialized focus and expertise contribute to an environment that encourages innovation, protects creators, and facilitates business opportunities with international partners. It also acts as a deterrent against intellectual property infringement and unfair trade practices, thereby strengthening confidence in Thai business as a global trade partner. In addition, the courts provide a system of checks and balances to ensure that judges are held accountable for their actions.
Disputes between businesses and consumers may arise over the quality of products, the payment of debts, or allegations of misleading advertising. These disputes can be settled through a variety of mechanisms, including mediation or arbitration. In some cases, the courts may grant interim relief to either party. The conditions and criteria for requesting such measures are based on the type of dispute and its jurisdiction.
Out-of-court arbitration in Thailand is governed by the Arbitration Act of 2002, which was recently amended to include key principles and Thailand-specific additions. It allows the court to apply domestic laws and international trade law to international commercial transactions, for example INCOTERMs, UNCITRAL model laws on e-commerce, the law of sales, and the CISG. However, the court is not required to enforce an award if it considers that enforcement would be contrary to public order and good morals.