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Intro: Welcome to Arbitral Insights, a podcast series brought to you by our International Arbitration Practice lawyers here at Reed Smith. I'm Peter Rosher, Global Head of Reed Smith's International Arbitration Practice. I hope you enjoy the industry commentary, insights, and anecdotes we share with you in the course of this series, wherever in the world you are. If you have any questions about any of the topics discussed, please do contact our speakers. And with that, Let's get started.

Joyce: Welcome to the latest episode of our Arbitral Insights podcast series. This is the fourth in a series of podcasts with DFDL, where we explore the arbitral landscape across South and Southeast Asia. Today, I have the pleasure of speaking with Noppadon Treephetcha, who goes by Ton. Ton is a partner at DFDL's Bangkok office, and he will be sharing some insights with us from Thailand, the land of smiles. Like me, Ton specializes in dispute resolution, covering litigation, arbitration, and mediation. His practice covers a wide spectrum of sectors, including labor and employment, anti-competition, data protection, corporate, and bankruptcy. Ton, hello, and welcome to our podcast. I'm really excited to learn more about the arbitration landscape in Thailand today.

Ton: Hello, Joyce, and hello everyone. This is Noppadon. You can call me Ton as Joyce's introduction. And I'm very excited to share my experience relating about the arbitration enforcement in Thailand.

Joyce: Perhaps you could start with a brief overview of how disputes are commonly resolved in Thailand. Is arbitration a popular way of resolving disputes?

Ton: In Thailand, dispute resolution mechanisms including litigation, arbitration, and mediation. Litigation remains the primary method, with cases handled by the specialized court, such as the civil court, the criminal court, the labor court, including the administrative courts. Arbitration is commonly used in commercial and international disputes and is governed by the Arbitration Act in Thailand, with the award enforceable under the New York Convention. For the mediation, both court annexed and private It is increasingly promoted for the civil and family matters under the Mediation Act. This mechanism provides parties with the option tailored to the nature of their dispute, offering varying degrees of formality, cost, and impossibility. So, for the arbitration, it will establish an increasingly popular method of the dispute resolution in Thailand, especially for the commercial and cross-border disputes. It is, however, less popular than the litigation.

Joyce: I see. Is Thailand's arbitration law based on the UNCITRAL model law? Also, would the same law apply to domestic and foreign or international arbitrations?

Ton: Thailand's arbitration laws are governed by the Arbitration Acts 2545, which is based on 1985 UNCITRAL Modern Laws. The same legal framework applied to both domestic and foreign arbitration.

Joyce: That's good to know. Ton, as you know, arbitration has several perceived advantages over litigation, including confidentiality and cross-border enforceability of awards. Based on your experience, why do Thai parties still prefer litigation over arbitration?

Ton: While arbitration offers a clear benefit, many Thai parties still prefer litigation for several reasons. The first, Thai courts are perceived as more compassionate and flexible, especially in a civil case. A just often encouraged to settlement and take a more approach which appeals to the party seeking resolution without escalating the conflict. So for the second reason, the court's consideration plays a role. Court fees in Thailand are relatively predictable and cut, whereas arbitration fees, especially under international institutions. Can be significantly higher and vary depending on the complexity of the value of the dispute. Additionally, in the arbitration parties are typically required to pay both the arbitration fee in the application procedure and subsequently the court fee when filing a petition for recognition and enforcement of the award in Thailand. This dual court structure is one of the reasons why many Thai parties still prefer litigation in Thai court, where only a single fee is applicable.

Joyce: That's fair enough. I think the important thing is to ensure that the agreed dispute resolution clause is fit for the party's specific circumstances, and this means that arbitration will not always be the most appropriate dispute resolution mechanism for a particular contract. With that said, tho Ton, have you observed any trends in the types of disputes which tend to be referred to arbitration?

Ton: Sectors such as construction, energy, infrastructure, and international trade tend to favor arbitration clauses. These industries often involve complex, high-value contracts, where neutrality, confidentiality, and enforceability are key concerns. For such contracts, parties are valuing being able to select decision makers who understand the nature of the underlying contract. Just in Thai court may not always have the necessary expertise or perspective.

Joyce: How interesting. So where parties choose to arbitrate, are there particular seats which Thai parties tend to prefer?

Ton: While Thailand is often select as the arbitral seat, the choice ultimately depends on the nature of the dispute. In case involving parties of the different nationalities, it is common for them to agree on a nature arbitral seat located outside the domicile of either parties. Singapore and Hong Kong are frequently choosing. in such scenarios due to their will established legal framework, notoriety, and procedural efficiency.

Joyce: From my perspective, I'm certainly happy to hear that Singapore is on the list of preferred seats. However, for the benefit of our listeners who are thinking of investing into Thailand or doing business with Thai counterparties, could you explain the advantages of agreeing to seat any potential arbitrations in Thailand?

Ton: Thailand offers a cost-effective, neutral, and legally supportive environment for arbitrations. Proceedings can be conducted in English, and awards are enforceable internationally under the New York Convention. Thailand is also a cheaper alternative to Singapore. It is also easier to enforce a domestic Thai award than a foreign award. No need to neutralize and legalize domestic award, which can be time-consuming.

Joyce: I see. Turning now to arbitral institutions, which arbitral institutions do Thai parties tend to nominate in their arbitration clauses?

Ton: The Thailand Arbitration Centre that we call THAC and Thai Arbitration Institutes that we call TNI. Both are popular. TSAC is a private institution and is known for its modern facility and international orientations, while TAI has a long-standing credibility and government backings. Both TSAC and TAI have a very similar rules. However, from my experience, parties tend to prefer TSAC over TAI, even though TAI is cheaper. This preference is offence due to TSAC's strong international engagement, including partnership with foreign arbitral bodies, and its hosting off-events like Thailand ADR Week, which enhances its visibility and reputation in international arbitration circles.

Joyce: How about ad-hoc arbitrations? Are these popular in Thailand?

Ton: For the ad-hoc arbitrations, parties in Thailand generally prefer institutional arbitration, as it offers structural rules, administrative support, and more predictabilities. Ad-hoc arbitration is sometimes used, especially in case of a lower-value dispute or when the party wants more possibilities.

Joyce: Personally, I think that administered arbitrations tend to be better run than ad-hoc arbitrations. There is so much advantage in having institutional oversight over the conduct of the arbitration. And if the institution is doing a good job, parties may not even remember that they are there. So this leads nicely on to my next topic, which is the role of the Thai courts. Would you say that the Thai courts are generally pro-arbitration?

Ton: Yes, I would say so. Thai courts have actually become increasingly supportive of arbitration. Especially in the business disputes and are closely aligned with international standards. However, they may refuse enforcement if the award goes against Thailand's public order of good morals or if there were non-compliance with procedural issues under the arbitration process. To give you an example, Compound interest is prohibited under Thai law, legalist of the governing law of the contract. If an award ordered a party to pay compoundable interest, the Thai court will refuse to enforce the portion of the award, awarding compound interest.

Joyce: It's great to hear that the Thai courts are so supportive of arbitration. Do the courts themselves have the power to issue measures such as injunctions or asset preservation orders in support of domestic or foreign arbitrations?

Ton: Yes, under Thailand Arbitration Act, a party's arbitration case can request the court to issue temporary protective measures before or during the arbitration process. However, if the court claims the request and the arbitration case has not yet been initiated, the party must begin the arbitration case within 30 days. Or within the time set by the court. If they don’t, the court order will automatically be cancelled. The above requirements shall be applied, both domestic and foreign arbitrations.

Joyce: I see. So what about interim orders or awards issued by tribunals? Would the Thai court enforce such orders and awards?

Ton: No. Only Thai court can grant protective measures against the person or asset in Thailand. The position in the same for domestic and foreign arbitrations.

Joyce: That's helpful to know. This is a great illustration of why it's important to work closely with local counsel like yourself, Ton, throughout the arbitral process. Otherwise, we risk wasting precious time and costs in trying to do the impossible. Let's move on now to the topic of enforcement. Starting with an easy question for you. How long does it typically take to recognize and enforce both domestic and foreign awards in Thailand?

Ton: As I mentioned earlier, there is no need for domestic award to be notarized and legalized. Enforcement itself usually takes around 6 to 12 months, but appeals can extend it to be one or two years. Foreign awards must be notarized by a notary public and legalized by a Thai embassy. A Thai translation of the award and the application agreement must also be prepared. Once these documents are in order, the enforcing party can apply for the award to be recognized in Thailand. This process normally takes around 6 to 12 months. Once recognized, the enforcement process is the same as for domestic award. I would also mention that any applications to enforce domestic or foreign awards in Thailand must be made within three years from publication of the award. After that, a thamba would apply.

Joyce: Under the New York Convention, there are only limited grounds for parties to challenge the recognition and enforcement of foreign awards. What are common arguments used by parties to resist recognition and enforcement in Thailand?

Ton: Party tends to rely on two common grounds to resist enforcement of an award, which I believe mentioned earlier. The first is an argument that the award goes against Thailand's public order of good moral. For example, by awarding compound interest, although compound interest is prohibited under Thai law, the Thai court will only refuse to enforce the portion of the award, dealing with the compound interest. The second common ground is to non-compliance with the due process, dealing with arbitration. Such as where the respondent was not properly notified of the arbitration or given the opportunity to participate in the arbitration.

Joyce: Thank you. It was particularly interesting to hear your examples of cases which fall of public order or good morals. I think these are quite unique to Thailand and parties may not be aware of, for example, the prohibition of compound interest unless they obtain advice on Thai law as early as when they enter into the underlying contract. Do you have any other tips, Ton, to help parties and tribunals maximize their chances of a successful enforcement in Thailand?

Ton: As you mentioned, the groundwork for a successful enforcement starts during the contracting stage. Parties should ensure that the application clause is clear in writing and signed by both parties. An arbitration clause can also be valid if it is included in the written communications like letters, emails, or electronic exchanges that clearly shows both parties agree to the arbitration clause. Once a dispute arises, parties should secure any relevant evidence and consider if they need to obtain interim measures from a Thai court to protect assets or evidence. During the habitations, it is important to follow the proper procedurals and document everything. In particular, proper record should be kept regarding service and notifications of the application proceeding and applicable rules to the respondents. The respondents should also be given the opportunity to participate in the selection of the tribunals. Also, record should be kept of the communications informing the respondents of any hearings before tribunals. Also importantly is the transmission of the respondent of a copy of tribunal award. Whilst this measure may seem cumbersome, there are aims at pre-attempting any arguments during enforcement that due process was not followed. Finally, once the award is published, do act quickly to enforce the award. If it will take a while to enforce, then it is worth asking the Thai court for asset protection measure in the interim.

Joyce: As we wrap up this very informative session, I have just one more question for you, Ton. What do you see as the key emerging trends for arbitration in Thailand?

Ton: Arbitration in Thailand is going digital with virtual hearings, online document filing. We are also handling more international disputes, especially in the construction, energy techs, and techs. Especially THAC is planning to become a regional arbitration center offering modern system, multilingual support, and competitive fees. This also discussion on promoting foreign arbitrators to sit in Thai-based proceedings which may increase investor confidence. THAC may release the update rules aligned more closely with UNCITRAL and ICC practice, enhancing procedural efficiencies and transparency.

Joyce: That's all super exciting to hear. I mean, I strongly believe that it would be beneficial to have another reliable arbitration center in the region, and I'll be sure to keep an eye out for developments at the THAC. Ton, this has been such an interesting discussion with so many points to ponder on. What is the main takeaway which you want our listeners to remember from this podcast?

Ton: Thailand is emerging as a leading arbitration-friendly jurisdiction in the regions. With unmodernized legal frameworks, progressive institutions like THAC and a Thai court increasingly support arbitrations. Thailand offers a reliable and efficient environment for this peer resolution.

Joyce: That sounds fantastic. Ton, thank you for your time today. I look forward to following future developments in Thailand and continuing this discussion.

Ton: Thank you very much. I hope that we can make something in development in the future. Bye-bye.

Joyce: Bye.

Outro: Arbitral Insights is a Reed Smith production. Our producers are Ali McCardell and Shannon Ryan. For more information about Reed Smith's global international arbitration practice, email arbitralinsights@reedsmith.com. To learn about the Reed Smith Arbitration Pricing Calculator, a first of its kind mobile app that forecasts the cost of arbitration around the world, search Arbitration Pricing Calculator on reedsmith.com or download for free through the Apple and Google Play app stores. You can find our podcast on podcast streaming platforms, reedsmith.com, and our social media accounts at Reed Smith LLP.

Disclaimer: This podcast is provided for educational purposes. It does not constitute legal advice and is not intended to establish an attorney-client relationship, nor is it intended to suggest or establish standards of care applicable to particular lawyers in any given situation. Prior results do not guarantee a similar outcome. Any views, opinions, or comments made by any external guest speaker are not to be attributed to Reed Smith LLP or its individual lawyers.

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