Alternative Dispute Resolution Office:

Providing investors with internationally accepted arbitration and mediation options

Source: Thailand Board of Investment's Investment Review Publication

The BOI Investment Review is a monthly publication of the Thailand Board of Investment. and Runckel & Associates believe that much of this information needs wider dissemination.  We are therefore working with the BOI to help promote these useful articles and index them into categories that are easy to find.

  By Susan Crawford     

The Thai judiciary provides alternative dispute resolution (ADR) services, including arbitration and mediation, as out-of-court settlement options to firms of any size or nationality facing business and financial disputes. The availability of these ADR services, conducted according to international best practices, is an important benefit for foreign investors as it provides a globally accepted alternative to pursuing a case through an unfamiliar foreign legal system.

The ADR Office operates under the Court of Justice and administers both arbitration and mediation services. In arbitration, the disputing parties select an arbiter who will hear the case and render a legally-binding judgment. Mediation, on the other hand, involves a neutral mediator who helps the disputing parties to communicate and reach a mutually acceptable agreement. The parties may select the language to be used in the proceedings, with assistance available to foreigners for proceedings conducted in Thai.

Thailand’s arbitration law is based upon the United Nation’s Model Law on International Commercial Arbitration. This is important for instilling confidence in foreign investors as a judgment awarded in Thailand is enforceable in all other member countries and vice versa. It also enables parties to conduct arbitration in a location other than where the dispute originated. According to Judge Montri Sillapamahabundit, of the Office of the President of the Supreme Court, ADR mechanisms offer both domestic and international firms important advantages over a court procedure, including:

  • More control and convenience, as parties can choose the arbitrator / mediator and set the session times and dates
  • Time and cost savings
  • Closed sessions, preserving confidentiality
  • Less confrontation, providing a better chance for the parties to maintain a positive relationship

When drawing up contracts, an arbitration clause can be specified as a dispute resolution mechanism. A number of specialized institutions administer arbitration, such as the Securities and Exchange Commission and the Department of Intellectual Property. Judgments are enforced by a court which has subject matter and geographic jurisdiction over the case.

Once a lawsuit or arbitration case is filed, the ADR Office encourages the parties to first try mediation. Judge Montri said, “Parties in mediation can obtain the best solution for themselves. They can decide what they want or need and can create a tailor-made solution.” The Thai mediation system is based closely on those of the U.S. and Europe. The World Bank, the American Bankruptcy Institute, the Kenan Institute Asia and others have supported the development of mediation in Thailand. “Mediation is well-suited to Thailand because the infrastructure is already here, including trained mediators who abide by international codes of ethics and standards,” said George Kelakos, an attorney and vice president of the international board of directors of the American Bankruptcy Institute. According to Judge Montri, approximately 24% of all civil cases go to mediation and of these cases, approximately 60% are solved. Mediation is commonly used for business disputes related to financial matters, construction contracts and sales agreements.

“Mediation is very cost effective for small cases because court costs associated with a trial may be more expensive than the actual judgment,” said Judge Montri. Mediation services are funded by the Office of the Judiciary and are free, aside from out-of-pocket expenses such as copy or delivery charges, which are borne by the parties.

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