Civil Litigation in Thailand
Litigation is usually the last resort in resolving disputes. Most parties to a dispute try to avoid litigation altogether, fearing that seeking recourse with the courts or arbitration will lead to a disruption in commercial relationships, result in increased legal expenses, and generally lengthen the period in which the dispute remains unresolved. While some of these concerns may indeed be legitimate, sometimes litigation is the only means for a party to obtain relief. For parties contemplating such recourse, it is reassuring to know that the Thai court system is generally an accessible, unbiased, and balanced vehicle for the resolution of disputes.
Civil Litigation in Thailand aims to introduce some of the fundamentals of Thai civil court procedures and practices. While it is not an in-depth study, this brief guide covers the main issues concerning civil litigation in Thailand as either a plaintiff or a defendant.
Overview of Litigation in Thailand
In deciding whether to litigate, parties need to consider factors such as the timing and expected duration of litigation, the costs, ability to enforce any judgment, and other circumstances.
Courts in Thailand. The Thai judiciary has a three-tier system, with the courts of first instance at the bottom, followed by the Courts of Appeal and the Supreme Court (a.k.a. Dika), which is the final appellate court. The courts of first instance consist of the Civil Courts, the Criminal Courts, and specialized courts. Thailand's specialized courts include the Administrative Courts, the Bankruptcy Court, the Labor Court, the Juvenile and Family Court, the Tax and Duty Court, and the Intellectual Property and International Trade Court (IP&IT Court). Appendix A illustrates the Thai court system in more detail.
Except for the specialized courts mentioned below, a complaint (plaint) may be generally presented to the court in whose judicial territory the defendant is domiciled or to the court in whose judicial territory the claim arose, regardless of the defendant's domicile. A complaint connected with immovable property must be presented to the court in whose judicial territory the property is situated, regardless of whether the defendant is domiciled in Thailand.
Khwaeng and Changwat Courts. There are two types of civil courts of first instance in Thailand, with general civil jurisdiction and different jurisdictional limits. The khwaeng (district) courts are authorized to handle civil disputes when the amount in controversy is up to THB 300,000 (approx. USD 8,000). The changwat (province) courts have unlimited jurisdiction and handle all matters above THB 300,000. Many district courts in the Greater Bangkok area have been elevated to provincial court status.
Bankruptcy Court. This court, which has jurisdiction over all provinces in the country, handles matters related to two bankruptcy-related legal mechanisms: rehabilitation and liquidation.
The first mechanism, rehabilitation, provides creditors with an enhanced opportunity to recover debts through litigation. The process begins with a creditor or debtor filing a petition for rehabilitation of the debtor's business. This provides a means by which a viable debtor business may continue operations, thereby increasing the likelihood of recovery for the creditor.
Liquidation, on the other hand, is a preferred option when the debtor's business is not viable or if the court refuses to grant a petition for rehabilitation.
Appeals of Bankruptcy Court judgments are made to the Court of Appeal for Specialized Cases.
Intellectual Property & International Trade Court. The IP&IT Court hears specialized disputes involving international trade transactions and those involving litigants' intellectual property rights. The panel of judges generally has extensive experience with international trade and intellectual property disputes, and there is usually at least one panel judge with experience in the nature of the contested action. Additionally, the IP&IT Court handles disputes related to arbitration that are within the IP&IT Court's jurisdiction.
Appeals of IP&IT Court judgments are made to the Court of Appeal for Specialized Cases.
Juvenile and Family Courts. These specialized courts adjudicate matters such as divorce, custody claims, and disputes involving minors. Two career judges and two associate judges, at least one of whom must be a woman, adjudicate claims before the court.
The Juvenile and Family Courts generally encourage negotiated settlement of disputes rather than fully contested proceedings. Appeals of Juvenile and Family Court judgments or orders are made to the Courts of Appeal.
Labor Courts. These specialized courts were set up to adjudicate employee-employer disputes, such as those involving employee claims of unfair treatment, wrongful termination, and failure to pay wages and compensation under Thai law. Claims may also be brought by employers against employees. The Labor Courts generally comprise a panel of judges with experience in labor disputes. The Labor Courts generally encourage settlement of disputes without a full trial on the merits of the allegations. Appeals of Labor Court judgments are made directly to the Court of Appeal for Specialized Cases.
Administrative Courts. The Administrative Courts adjudicate claims under administrative contracts as well as administrative disputes between the private sector and state agencies. The disputes often concern accusations of the abuse of power by state agencies and/or their employees. The Administrative Courts were created by the 1999 Act for the Establishment of and Procedures for Administrative Court, and there are two levels: the Administrative Court of First Instance and the Supreme Administrative Court.
Length of Trials. Unless settled by compromise, civil litigation typically lasts between 12 and 18 months, counting from initiation of an action until a judgment by the court of first instance. Cases in the Courts of Appeal usually take an additional 18–24 months, with a similar period for appeals to the Supreme Court.
Offers of Compromise or Settlement. In Thailand, there is no such thing as an "offer without prejudice." Anything put in writing can be used against the offering party. Therefore, compromises, settlements, and offers to compromise or settle should not be made before consulting with legal counsel. Similarly, parties at trial or anticipating litigation should be circumspect in all communications with the opposing party.
Location of Assets. Before initiating litigation, plaintiffs should investigate the nature and extent of the defendant's assets in Thailand and abroad. A monetary judgment is of limited value if the defendant has little or no recoverable assets. Therefore, any information a claimant has on the opposing party should be assessed at the beginning of the case or as soon as possible.
Amount of Claims. Because of the substantial time and cost involved, it may not be worthwhile to pursue a civil suit in Thailand for claims under THB 400,000 (approx. USD 10,700). In some circumstances, however, the Thai Revenue Code rules require Thailand-based taxpayers to institute legal proceedings for much smaller sums before they can be written off as bad debts.
Language of Documents. All documents submitted to a Thai court must be in the Thai language. Foreign documents must be the originals or certified copies, and certain documents also need to be notarized and then authenticated by a Thai consul. Tilleke & Gibbins has a dedicated team of certified translators and can prepare all necessary translations.
In IP&IT Court cases, it may be possible to use English-language documents as evidence if agreed to by the litigating parties. However, such documents may not be used as evidence for material issues in the case.
Single and Multiple Claims. No distinction is made by the courts between single and multiple claims because the amount of work involved and the court procedures are essentially the same for each individual claim. Form-style pleadings are not accepted in Thai courts.
Court Costs. A plaintiff must pay a court filing fee when submitting a case. This is usually 2% of the claim amount, but will not exceed THB 200,000 per action for claims of up to THB 50 million. There is an additional 0.1% calculated on the amount of the claim exceeding the THB 50 million threshold. If the suit is successful, a portion of these advanced court costs is usually recoverable.
For enforcement of local arbitration awards, the court filing fee is 0.5% of the claim amount, with a maximum of THB 50,000 per action for claims of up to THB 50 million. There is an additional 0.1% calculated on the amount of the claim exceeding THB 50 million.
For enforcement of foreign arbitration awards, the court filing fee is 1% of the claim amount, with a maximum of THB 100,000 per action for claims of up to THB 50 million. There is an additional 0.1% calculated on the amount of the claim exceeding THB 50 million.
Additionally, nonresident plaintiffs may also be required to deposit security with the court to insure against a potential award of court costs in favor of the defendant.
Appeals. In civil cases, appeals must be filed within one month after the judgment is read. For example, if a judgment is rendered on February 14, 2022, then an appellant has until March 14, 2022, to file the appeal.
At each level of appeal, the appealing party must also deposit additional court costs of 2% of the judgment amount, with a maximum of THB 200,000 for claims of up to THB 50 million, and an additional 0.1% calculated on the amount of the claim exceeding THB 50 million. The appealing party may also be required to post an additional guarantee with the court to ensure its ability to cover judgment should its appeal be unsuccessful.
The Court of Appeals and Supreme Court are not trial courts, and, as a general rule, no new evidence may be introduced after the trial in the lower court has been completed. In fact, appeals at all levels are resolved through written pleadings and supporting documentation only. Oral testimony or argument is not permitted. The only scheduled hearing is for the reading of the appellate or Supreme Court judgment.
Power of Attorney. Clients must sign a power of attorney (court proxy) form to authorize one or more attorneys to act on behalf of a particular party to a suit.
Local Clients. If the client is a juristic person (e.g., a company), a person authorized to bind a local company or the branch manager of a Thailand-based foreign company must sign.
Typically, the court must be provided with the original or a certified true copy of the power of attorney authorizing a representative to initiate lawsuits in Thailand.
Overseas Clients. Powers of attorney executed outside of Thailand must be notarized and then authenticated before a Thai consul in order to be considered valid by Thai courts.
Conflicts of Law. Thailand's Conflicts of Law Act B.E. 2481 (1938) (CLA) provides a common law approach to conflicts of law in Thailand's civil law system. The act provides a comprehensive solution to conflicts of law in a manner consistent with the structure of the Civil and Commercial Code. It also provides guidelines for courts in their application of foreign laws.
Choice of Law/Forum. Choice of law provisions and agreements are generally valid and binding under the Thai legal system unless they are contrary to Thai statutes or another expression of public policy. The CLA provides that the choice of which law applies to the essential elements or effects of a contract depends on the intention of the parties. If intent, either express or implied, cannot be ascertained, then the applicable law is either (1) the law common to the parties when they are of the same nationality, or (2) the law of the place where the contract was made. When the contract is made between persons at a distance, the place where the contract is deemed to have been made is the place where notice of acceptance reaches the offeror. If this place cannot be determined, then the law of the place of performance will govern.
In summary, parties to a contract who litigate a dispute arising under the terms of the contract must be aware that choice-of-law provisions in a contract that a properly executed will be enforced. In the absence of a choice of law in the contract, the parties should be aware that there might be uncertainty as to the governing law of the contract in light of the aforementioned criteria.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
