ReSolution Issue 16, February 2018 | Page 20

- Thailand -

Proposed Amendments to the Thai Arbitration Act B.E. 2545 (2002)

VICTOR SMITH

Historically Thailand has not been perceived as being an “arbitration friendly” jurisdiction by foreign investors and those involved in arbitration proceedings. Two of the current significant obstacles to arbitration in Thailand are:
o Foreign arbitrators are required to obtain a work permit to sit as an arbitrator in arbitration proceedings in Thailand, and
o Parties can only appoint foreign counsel to represent them in arbitration proceedings under very limited circumstances (where they acting in defence of a case, where the governing law is not Thai law and where the award will not be required to be enforced in Thailand).
Both of the above obstacles often deter foreign parties from holding arbitration proceedings in Thailand and encourage them to include provisions in their contracts for arbitration proceedings to take place in other more “arbitration friendly” jurisdictions such as Singapore and Hong Kong.
The process for foreign arbitrators to obtain a Thai work permit is but both difficult and time consuming deterring many foreign arbitrators from accepting appointments to sit as an arbitrator in Thailand. The reluctance of foreign arbitrators to accept appointments in Thailand severely restricts the parties’ choice of arbitrator. The restriction on the choice of counsel by the parties goes against the consensual nature of arbitration and severely limits the freedom of choice for the parties to choose who they wish to represent them in arbitration proceedings.

The Thai government has taken on board that the arbitration environment in Thailand needs to be improved with a view to attracting greater foreign investment in Thailand and promoting Thailand as a regional center for international arbitration. With this in mind a draft Arbitration Act is currently under consideration and has been publically circulated. The full text of the draft Act is available on the Thai Arbitration Institute (TAI) website at www.tai-en.coj.go.th
The current Arbitration Act does not differentiate “domestic” and “international” arbitration. The main purpose of the draft Act is to differentiate “domestic” and “international” arbitration and make international arbitration in Thailand more convenient by:
o Allowing foreign arbitrators to sit as arbitrators in international arbitration proceedings without having to obtain a work permit, and
o Allowing parties to be represented by foreign counsel in international arbitrations.
Under the draft Act, subject to the law on foreign persons working in Thailand and law on immigration, in international arbitration cases a foreign arbitrator or foreign party representative is entitled to:
o Perform their duties under such regulations,
o Reside provisionally in Thailand, and
o Be permitted to work in the capacity of an expert according to his or her position in the arbitration proceedings.