The national Arbitration Act, which is modeled in part after the UNCITRAL Model Law, governs arbitration proceedings. The Thai Arbitration Institute and the Office of the Judiciary provide arbitration services.
The complainants were able to demonstrate that preferential tariffs had adversely affected their export performance vis-à-vis the European Community. They also argued that, while the preferential tariff may have been justified in the past, it no longer was.
Intellectual Property and International Trade Court
Thailand’s judicial system has several levels, including courts of first instance, the Court of Appeals, and the Supreme Court. Specialized appeals courts handle cases involving intellectual property, international trade, and other specialized fields. The Supreme Court can choose whether to take a case from the specialized appeals court, but it may decline to do so.
U.S. firms have reported problems with intellectual property rights enforcement, and the legal process can be lengthy and costly. The government has taken steps to address these issues.
In response to an OECD report in 2017, the Ministry of Finance (MOF) repealed the tax incentives granted to foreign investors who establish regional operating headquarters; international headquarters (including a treasury center); and international trading centers. MOF indicated the repeal was a necessary step to ensure Thailand does not be classified as having a “potentially harmful” incentive regime under the Forum on Harmful Tax Practices and Base Erosion and Profit Shifting (BEPS). MOF has also introduced new laws on transparency in government procurement and established a 15-member State Enterprises Policy Commission superboard to oversee reform of SOEs.
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) is an approach to dispute resolution that avoids litigation. ADR is a more flexible and cost effective process than going to court. ADR can also be less stressful than the typical court proceeding.
The judiciary encourages the use of ADR in order to ease a backlog of cases. A judge can refer a case to mediation or arbitration if it is deemed appropriate.
Mediation is a type of ADR in which parties are assisted by a neutral third party to help them resolve their disagreement. It is a common practice in Thailand and the rest of Asia.
The purpose of ADR is to reach a settlement that is acceptable to all parties. In some cases, a settlement is not possible, and the matter may go to trial. However, a pre-trial conference can be useful for helping the parties to work out an agreement. The meetings can take place over the phone or face to face.
Negotiation
Negotiation is an alternative dispute resolution technique that can provide a faster, less expensive and more collaborative solution than litigation. It can also reduce risk by ensuring that the terms of the agreement are understood by both parties.
However, negotiating a trade dispute in Thailand requires an understanding of the unique nuances in its business culture and etiquette. For instance, Thai negotiated agreements often incorporate cultural considerations, such as the manner in which one shows respect to another person.
The resumption of the EU-Thailand Free Trade Agreement (FTA) negotiations is a reflection of both countries’ commitment to promote innovation, intellectual property rights protection and fair international trade practices. The FTA will also provide a boost to both economies by increasing market access for European agricultural products and reducing Thailand’s high tariff rates on automotive products such as passenger cars, SUVs, motorcycles, completely knocked down (CKD) auto kits and fabrics. It will also promote a more robust and comprehensive rule-based global trading system and enhanced resilience for both economies.
Mediation
As a significant player in the global trade arena, Thailand must be mindful of protecting intellectual property rights and ensuring fair international trade practices. Establishing a specialized court to resolve disputes in these areas will promote investment and innovation, allowing businesses to develop and thrive in the global marketplace.
Unlike litigation, mediation is often more friendly and less hostile. This is because parties are willing to work mutually toward a resolution. Parties are also encouraged to negotiate on the basis of interests rather than positions, allowing them to explore more creative solutions that may benefit everyone involved.
The court may also encourage mediation before a case is filed, which can save time and resources. The process of mediation must also be tailored to the specific circumstances of the case. Taking into consideration logistical factors, such as travel arrangements and the amount of time required to fully prepare a case, can be beneficial in establishing the right mediation strategy for each individual dispute.
