Businesses can get entangled in disputes that require resolution through the Thai legal system. Disputes come in different forms, such as debt collection or unpaid invoices that result in commercial disputes; disagreements between shareholders leading to shareholder disputes; and consumer disputes.

Dispute resolution options in Thailand provide an accessible and unbiased mechanism for settling disputes. These include conciliation, arbitration and litigation through the courts.

Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) is a mechanism for resolving disputes outside the traditional judicial system. ADR includes a variety of mechanisms, including mediation, arbitration, and conciliation. Thailand has a strong legal framework for ADR and is a member of several international agreements that help bolster its credibility as an ADR center.

ADR has been a powerful tool for reducing the backlog of cases in Thai courts, where cases can be litigated for years before they are finally disposed of. Judges have the option to refer cases for conciliation during a trial or at any time after the court has rendered a judgment. A judge may also appoint a conciliator to convene a conciliation session with the parties.

The key to a successful Thailand dispute resolution process is finding a venue that provides a comfortable and private setting for all involved parties. The location should be easily accessible and close to public transportation or major thoroughfares. Ideally, the location should be able to provide a space where parties can meet with their attorneys without disrupting their schedules or interrupting their business operations.

Moreover, the location should have sufficient parking to accommodate all parties’ vehicles. This is especially important if the proceedings will take place over multiple days and evenings. In addition, the facility should be well-equipped with modern facilities and equipment.

Litigation

Litigation is the most traditional means of dispute resolution in Thailand. It involves a formal process in which both sides present their cases to a judge or jury, and the court makes a final decision based on the evidence presented.

Whether your business faces a dispute with an employee, a regulatory matter or a legal battle with another company, it’s important to understand how the litigation process works in Thailand. An attorney can provide tailored legal advice, advocate for your best interests and guide you through the complexities of the Thai legal system.

Litigation proceedings are typically complex and time-consuming. The courts are overwhelmed by a high volume of cases, and it can take years to reach a conclusion. Moreover, litigants must bear substantial legal costs, and the court can make nominal costs orders that only result in a fraction of actual costs being recovered.

In some industries, such as banking, finance and technology, arbitration has become a preferred mode of dispute resolution because it is cost-efficient and faster than litigation. However, commercial disputes still frequently arise before the Thai courts. Additionally, employers with international businesses face labour-related issues that require careful consideration of foreign employment laws and compliance concerns alongside local cultural considerations. This can result in a significant amount of legal expense and risk to the business.

Conciliation

While litigation is the traditional form of dispute resolution in Thailand, it typically takes a long time and can be generally intimidating and hostile. This is why it might be beneficial for parties to opt for an alternative dispute resolution method like conciliation instead.

Under the Civil Procedure Code (“CPC”), conciliation is provided as an option for settlement of disputes in certain cases such as labour disputes and general civil litigation. It is also possible for a judge to require the parties to participate in an in-court conciliation before proceeding with trial.

Conciliation is not a binding dispute resolution process in Thailand and cannot be enforced as an award, but it is often seen as a quicker and more cost effective way to resolve a dispute. It is also an effective way for companies to preserve their business relations and avoid the potential for a costly legal battle.

In a conciliation process, the disputing parties meet with a neutral person known as a conciliator to discuss their dispute and attempt to reach an acceptable solution. The conciliator is not required to provide an impartial judgment and will only consider what the most likely outcome would be if the case were tried in court. The conciliation process will usually include witness hearings and a final judgment hearing, though some cases may be settled without a trial taking place.

Arbitration

Increasingly, foreign claimants and defendants are selecting arbitration as a means of dispute resolution in Thailand to reduce the risks associated with traditional court proceedings. This is particularly evident in the oil & gas and infrastructure sectors, where the choice of arbitration may be dictated by contract or the requirements of local law.

Litigation before Thai courts is still common, with cases often taking years to resolve and significant costs involved for both parties. In an effort to streamline the judicial process and reduce its backlog, the courts have adopted mediation as part of their procedures.

During proceedings, the court will usually arrange meetings with disputing parties to set the schedule of the case, decide on evidence and procedure matters and officially designate a tribunal. In cases involving multiple claims, the court may also, at the request of either the plaintiff or the respondent, order the claims to be tried separately.

Arbitration hearings take place in a private setting, and all information, evidences, statements and arguments are kept confidential. This is a major advantage of the arbitration process, particularly for public figures or businesses that wish to maintain their reputation. It is also possible for parties to choose an arbitrator that is specialised in their subject matter, which can be helpful to speed up proceedings and provide a more thorough and accurate decision.