Trade Disputes in Thailand

Trade disputes are a common occurrence and can have far reaching effects. As such, they should be resolved in a timely and cost effective manner.

Chandler MHM Limited advises on all aspects of dispute resolution in Thailand including arbitration, litigation and alternative dispute settlement proceedings. The team has experience in defending international traders in trade remedy procedures such as anti-dumping and countervailing duties.

Dispute Settlement

In the civil justice system, damages awarded in a trade dispute are based on the amount of the loss and the extent to which it was caused. The court also takes into account the complexity of the case, the time taken to resolve it and other factors. Lawyers fees are recoverable in accordance with the rules and regulations of the civil court.

Entities in the banking and finance industries are exposed to a range of disputes including foreign currency transactions, derivative agreements, asset management and intellectual property issues. The complex nature of these sectors demands specialised expertise and cost-effective dispute resolution mechanisms.

Thailand is a member of the WTO and is committed to following its rules and the multilateral dispute settlement mechanism. This approach, together with its efforts to engage in bilateral discussions and seeking out win-win solutions, helps ensure that Thailand’s trading environment remains stable and prosperous. Disputes that cannot be settled through negotiations may be subject to a mediated agreement or arbitration.

Bilateral Negotiations

The EFTA States and Thailand are engaged in bilateral trade negotiations towards an ambitious free trade agreement. The first round of negotiations took place in Borgarnes, Iceland in October 2022. The most recent round of the negotiation process was held from 6 to 9 November 2023 in Geneva.

EFTA countries are major traders with Thailand, with total merchandise exports to Thailand in 2021 of EUR 2.1 billion and imports from Thailand of EUR 1.2 billion. Trade in pharmaceuticals, clocks and watches and fish products is particularly significant.

The U.S. government seeks to promote economic development in Thailand by encouraging investment and trade, strengthening regional security and cooperation, and addressing human rights challenges. In particular, the United States focuses on reforms of Thai economic policies that increase competitiveness and reduce barriers to international investment and trade in services such as financial, telecommunications, and professional services. These efforts are often informed by the need to improve protection of intellectual property rights.

Appellate Body

The Appellate Body is an independent body that consists of 20 members. The members are required to be persons of recognized authority and have demonstrated expertise in law, international trade and the subject-matter of the covered agreements generally. They are not to be affiliated with any government, and their membership is designed to be broadly representative of the WTO Membership. The Appellate Body is headed by a Chairman, elected among its Members.

In DS371, the Philippines challenged Thailand’s customs and fiscal measures on cigarettes, alleging that these violated the two core national treatment disciplines of GATT Article III. The DSB found in favour of the Philippines and established a panel to examine the dispute.

After the panel report and Appellate Body report were adopted, Thailand requested a reasonable time period to implement the recommendations and rulings of the DSB. The DSB agreed and set 15 October 2012 as the expiry date of this period. In the meantime, bilateral discussions continued as a stopgap measure.

Arbitration

Thailand participates in trade-related dispute settlement mechanisms, both bilateral and multilateral. These are designed to address conflicts, including those over tariffs and quotas, which may damage domestic industry or unfairly disadvantage local competitors. Timely resolution of disputes reduces uncertainty, allowing for economic stability and investor confidence. It also promotes compliance with international trade agreements, which help to prevent unfair practices from impacting global trade and market access.

Arbitration in Thailand is governed by the 2002 Arbitration Act and the rules of the two main arbitration institutes, TAI and THAC. The courts can also intervene in the course of an arbitration, for example in relation to questions of jurisdiction or summoning witnesses or disclosure of documents.

The prevailing party is generally awarded lawyers’ fees. However, it should be noted that the Thai legal system views a award of fees as a cost rather than damage, and therefore it is unlikely to be fully recoverable in practice.

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