Thailand

Mediation and settlement prior to filing suit

Introduction

Civil litigation in Thailand is known for being a time consuming and frustrating process. As a result, a focus of governmental authorities has been on developing alternative dispute resolution (“ADR”) processes much to the relief of business operators. The focus for the development of a robust ADR system has been in developing regulations related to arbitration proceedings in line with international standards. On September 8, 2020, the Thai authorities published amendments to the Thai Civil Procedure Code(the “Amendments”) in the Government Gazette which add court supervised pre-filing mediation options to the ADR choices available in Thailand.

The purpose of the Amendments is to expedite the dispute resolution process, and provide business operators and individuals with an attractive, cheaper and binding alternative to private mediation procedures, old court supervised mediation, arbitration or traditional civil suits. The Amendments will become effective on 7 November 2020 and can be read in full in the Act Amending the Civil Procedure Code (No. 32) B.E. 2563 (2020).

This briefing will discuss the key aspects of the Amendmentsthat are relevant to business operators in Thailand. Procedural changes in the Amendment

Court supervised mediation is not a new concept in Thailand. The key changes contained in the Amendment include an important procedural change. Under the old Civil Procedure Code, court supervised, or court ordered mediation was an option. However, the option of court supervised mediation could only occur after a complaint was filed with the court. In addition, this option was offered during the pretrial stages of the civil litigation, which may be months after the complaint and defenses are filed.

The Amendments allows potential litigants to a dispute to motion for pre-filing court supervised mediation to the relevant court without filing an official complaint. The court has discretion in accepting the motion, and both parties must show their willingness to engage in mediation. If the motion is accepted, and both parties to a dispute agree to mediate, the court will appoint a mediator.

If a settlement is reached through this process, the parties to the dispute then must propose the settlement to the court for its examination, approval and enter into a written agreement detailing the settlement terms. If the settlement terms are approved, the parties can request that the court issue a judgment in accordance with the settlement terms. The parties must demonstrate a ‘necessity’ for a judgement, and it is at the court’s discretion as to whether such judgement will be issued.

Benefits to pre-filing mediation under the Amendments

Cost/Fees

In what will most likely be a very welcome aspect of the Amendments, there are no court fees for pre-filing mediations. Legal fees (if any) and other expenses may also be reduced.

Timing

The option of pre-filing mediation is expected to be much faster than court supervised mediation which was available prior to the Amendments. As there is no need to initiate a lawsuit, mediation under the Amendment can be started once the court approves the motion requesting court supervised mediation. This avoids what can be a very time-consuming process of initiating a lawsuit (i.e. filing a complaint, defense, notices, motions etc.).

Enforcement of judgements

Once the parties to a dispute settle through the new court supervised, pre-filing mediation system, the settlement may be endorsed via a court judgement. Court judgements, under the Amendments are final and binding, which means that the terms can be enforced by a party to the settlement through the legal execution process.

Maintenance of amicable business relationships

Although not included in the Amendments, an unintended benefit of the new mediation option may be the preservation of amicable business relationships. Civil litigation is often contentious, and there are aspects of the process that will inevitably require disclosure of information that can have a lasting impact on business relationships between the parties to a dispute. The ability to enter into a less contentious process with the aim to amicably settle a dispute can potentially preserve these business relationships.

Conclusion

The Amendment is another step in developing a robust, trusted and convenient ADR system in Thailand. The new mediation process is expected to save time, money and resources that would otherwise be needed in lengthy traditional civil litigation. In addition, the Amendment allows for immediate enforcement of a settlement through a court issued judgement.

If you would like to discuss any of the legal implications of the matters discussed above, please contact the authors listed below:

Screen Shot 2020-11-04 at 14.35.35
Chatchai Inthasuwan
T +66-2-009-5000 Ext. 3401
chatchai.i@mhm-global.com
Screen Shot 2020-11-04 at 14.35.44
Jirayu Sanguankaew
T +66-2-009-5000 Ext. 3401
jirayu.s@mhm-global.com
Screen Shot 2020-11-04 at 14.35.54
Prachaya Boonchouychoo
T +66-2-009-5000 Ext. 3404
prachaya.b@mhm-global.com
Chandler MHM Limited
36th Floor, Sathorn Square Office Tower
98 North Sathorn Road Silom, Bangrak, Bangkok 10500
Thailand www.chandlermhm.com

This update is intended to highlight an overview of key issues for ease of understanding, and not for the provision of legal advice. If you have any questions about this publication, please contact your regular contact persons at Mori Hamada & Matsumoto or Chandler MHM Limited. If you should have any inquiries about the publications, or would like more information about Chandler MHM Limited, please contact bd@mhm-global.com.

Related Articles by Firm
Foreign Banks Allowed to Operate in Myanmar
After more than 50 years of banning, the Central Bank of Myanmar has issued the first final licenses allowing four foreign banks to operate in Myanmar.
Tanzanian Draft National Energy Policy of 2015
Highlights on the ongoing and upcoming industry developments with focus on the transition of the energy sector since the introduction of the Big Results Now! campaign
Mineral Rights Available in Tanzania
Overview of the mineral rights available in Tanzania, with specific focus on the various categories of mineral rights
The Legal Framework of the Aviation Sector in Tanzania
As attention turns to Tanzania’s trade and energy opportunities, the spotlight has fallen upon the nation’s infrastructure. This update focuses on the capabilities and issues of the Tanzanian aviation sector.
Oil price volatility - Offshore oil storage
Are there any legal concerns with tankers being used for floating storage?
Oil price volatility - risks and opportunities in 2015
While many companies can weather the oil price slide and volatility, some industry players face a real risk of insolvency.
India: Union Budget 2015
A bullet-point overview of changes in Direct Tax, Indirect Tax and Goods and Service Tax in India in light of Finance Minister Arun Jaitley’s first full-year Budget…
Prohibition against transfer of personal data outside Hong Kong
Section 33 of the Personal Data (Privacy) Ordinance (PDPO) prohibits the transfer of personal data to places outside Hong Kong, except in circumstances specified in the PDPO.
Security of payment under FIDIC contracts: more secure, for now
The High Court of Singapore recently handed down an important judgment in relation to the enforceability of Dispute Adjudication Board (DAB) decisions under the FIDIC forms of contract.
Insurance Laws (Amendment) Bill passed as Ordinance in India
The long-awaited Insurance Laws (Amendment) Bill has become a provisional law in India. The Bill amends the Insurance Act (1938), the General Insurance Business (Naturalisation) Act (1972), and the Insurance Regulatory and Development Act (1999).
SICC: now open for business
On Monday 5 January 2015, the Singapore International Commercial Court ("SICC") was officially opened...
Myanmar insurance update
Clyde & Co partner Michael Horn recently visited Myanmar's commercial capital Yangon and reports on the current state of the insurance market...
Launch of the online mining cadastre transactional portal
Plus, a summary of the key mineral rights available in Tanzania; and, a look at the manner in which mineral rights can be transferred.
Restrictions imposed on holders of mineral rights
This briefing looks at some of the restrictions imposed on holders of mineral rights in Tanzania by the Mining Act 2010
Draft local content policy for the oil & gas industry in Tanzania
The first draft of the long-awaited local content policy for the oil & gas industry in Tanzania has now been published by the Ministry of Energy and Minerals ...
Tanzania: Revocation of mining licences
The Tanzanian government recently announced the cancellation of a total of 174 mining licences. This mining update examines the key continuing obligations imposed by the Mining Act upon mining licence holders.
Mining Development Agreements
In this month’s mining briefing we look at Mining Development Agreements (MDAs) and the role that they play in the mining sector in Tanzania.
The Tanzanian railway system: current legal framework
The railway system of mainland Tanzania has a total track length of 3,676 kilometers (km) with two separate networks, run by two separate organisations ...
Related Articles
Data collection and early case assessment for investigations
Data collection and analysis for investigations is very different to collection for discovery or review. This article discusses the differences; how Early Case Assessment (ECA) can assist and the benefits of using review technology ...
Breakthroughs in Vietnam’s securities market
Since the first promulgation of the law on securities in 2006, Vietnam’s securities market has experienced dramatical growth (roughly twentyfold in market capitalisation) ...
The rooster is on the run
The pursuit of happiness has been an inalienable right, at least in the United States, since July 4, 1776 when it originated as an “unalienable” right in the Declaration of Independence ...
Related Articles by Jurisdiction
Thailand Update: Amendment to Work Permit Law
In response to criticism, the government decided to amend the Emergency Decree on Managing of Foreigners with relaxed penalties ...
Data Protection and Cyber Security Law in Thailand
It is perceived that Thailand does not have adequate protection covering this very fast developing environment ...
Latest Articles
Data Privacy in Malaysia
DFDL’s William Greenlee sets out the data protection regulatory framework in Malaysia and its recent developments ...
Cross-border transfer of personal financial information in China
Jingtian & Gongcheng partners Yuan Lizhi, Hu Ke and associate Wang Beining take us through the details of the regulatory framework ...
Amendments to three data privacy laws in Korea and the implications
By Kwang-Wook Lee, Helen H. Hwang, Chulgun Lim and Keun Woo Lee of Yoon & Yang ...