Dispute Resolution is playing an increasingly important role in Thailand. It offers greater flexibility, cost-effective measures and discretion compared to lengthy litigation held in court.
At Formichella & Sritawat, we are experienced in a range of dispute resolution methods including negotiation, mediation and arbitration. Each offers distinct approaches to resolve disputes effectively.
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) is a method of settling disputes outside the court. It offers a more flexible and cost-effective measure, and it provides a more discreet solution for both parties to the dispute. Moreover, it allows for more sector-specific expertise to be brought in, thus increasing predictability of the outcome and allowing parties to keep their dispute confidential.
ADR is becoming increasingly popular in Thailand, and it is being promoted through several initiatives by the government. These include a number of online platforms for filing claims and pleadings, as well as online case management. These initiatives are aimed at improving efficiency and reducing the backlog of cases in the judiciary system.
In addition, the Government has endorsed the Singapore Convention on Mediation and is in the process of ratifying it. This will position Thailand as a progressive leader in ADR in Asia, benefiting both its legal landscape and the regional economy.
LCS recommends that clients seek out ADR methods to resolve disputes in Thailand, including mediation and arbitration. In fact, LCS has extensive experience in advising clients on and implementing ADRs for disputes of all sizes and natures. We can help you understand your options, provide advice on the most suitable mechanism for your specific situation, and assist you in drafting arbitration and mediation clauses in business contracts.
Mediation
The mediation process is a voluntary and non-binding procedure, whereby a neutral third party facilitates discussions between disputing parties to reach an agreement. The process emphasizes collaboration, confidentiality, and flexibility, and is especially suited to commercial disputes. It also saves the court system time and money by reducing the burden on its docket.
Mediation is a legal option to resolve disputes in Thailand, and it is becoming more popular with businesses. It is a quicker and cheaper alternative to litigation, but it still requires a lot of time and effort to prepare a case.
In the past, courts in Thailand have only been able to mediate a dispute after parties had filed an action with the court. This meant that months might elapse before the dispute mediation hearing was scheduled.
However, as of late, the judiciary has been attempting to promote and support the mediation process by allowing dispute resolution centres to offer pre-litigation mediation, and the chief trial judge has the authority to mediate disputes at any point during the lawsuit process.
Moreover, it is now possible for parties to include arbitration clauses in contracts and the statutory rules stipulate that the viability of such clauses will be determined according to the Arbitration Act B.E. 2562 (2019). As a result, there has been a rise in arbitration cases.
Arbitration
Arbitration is a process where disputes are resolved by a panel of arbitrators. Disputes that are relatively low in value are usually heard by one arbitrator, while higher-value disputes are typically heard by three arbitrators. Arbitration is often faster and less expensive than obtaining a court judgment. Furthermore, arbitration proceedings are generally conducted in a private setting and can therefore be more confidential than a court proceeding. This can be especially beneficial to renowned public figures and businesses who may wish to protect their reputation or commercial interests.
In-court arbitration has traditionally not been a popular method of dispute resolution in Thailand, despite the fact that there are provisions for it in the Civil Procedure Code. In-court arbitration allows the award from an arbitration proceeding to be incorporated into the court’s judgment, making it immediately enforceable, but it also gives the courts a greater role in the proceedings than would otherwise be the case with out-of-court arbitration.
In addition, the pool of available Thai arbitrators is limited, and it is difficult to recruit foreign arbitrators. In order to address these issues, the THAC and TAI are working to increase the number of arbitration-related training events and to provide more incentives for arbitrators, including greater remunerations. The government is also considering the possibility of establishing specialised courts to hear applications related to arbitration, such as challenges to arbitrators and requests for interim measures.
Conciliation
In general, Thai courts encourage parties to resolve disputes outside the traditional judicial process. Arbitration, mediation and conciliation offer parties alternative methods to resolve disputes in a more informal, less adversarial way. It is also generally much quicker and more cost effective than the traditional route of obtaining a final judgment from the courts.
Court annexed conciliation is not mandatory in any civil case but where the presiding judge feels there is a reasonable chance of an amicable settlement between the parties he may order that conciliation proceedings be undertaken. This is particularly the case in cases involving family and labour disputes. The judges in these matters are more experienced at facilitating conciliation and they have the power to convene closed door conciliation sessions with the parties to attempt compromise.
The judge acts as conciliator but a specialist conciliator or a panel of experts can be called upon to assist where appropriate. The conciliation is conducted in a conference room not in the courtroom and it is kept confidential.
Private mediations are widely available in Thailand and parties can either designate their own mediator or have recourse to the courts list of court appointed mediators. Private mediators can be lawyers, former judges, prosecutors or entrepreneurs who have the ability to bring a wider range of industry specific expertise into the process.