Category: Litigation

Civil and Criminal Cases in Thailand

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Like all jurisdictions, Thailand distinguishes between civil and criminal cases to ensure justice is served and that the law is upheld. Knowing how these cases work in Thailand is essential for foreign businesses that may face alleged violations of the country’s laws.

In criminal cases, defendants are considered innocent until proven guilty. However, it can take a while for litigation to commence and witness hearings to be conducted.

Torts

Torts in Thailand are a broad category of cases that include any action or omission that violates a person’s rights, including physical health, privacy and property. They also can include negligence that injures a person’s reputation or credit, and defamation. Torts can be remedied by a lawsuit seeking damages and/or an injunction.

Court procedures in Thailand typically begin with the plaintiff filing a complaint. The court may then schedule proceedings to identify the issues and facilitate a compromise between the parties. In some cases, courts may require mediation, particularly in labor disputes in Thailand. In other cases, the judge will determine whether to order a witness hearing and/or a trial.

As a general rule, the burden of proof is higher in civil than criminal cases. In a criminal case, the plaintiff must prove guilt beyond a reasonable doubt, while in a civil case the plaintiff must provide evidence that the defendant’s conduct was unjust or unreasonable.

A prevailing party in a civil dispute can claim attorney’s fees. However, a client’s legal fees must be documented and supported by a bill from the lawyer to be awarded these damages. The prevailing party is not normally granted moral or punitive damages, unlike in many Western countries. In some cases, the court may award a lump sum of damages rather than an ongoing payment plan.

Contracts

A contract is a juristic act that creates mutual legal obligations. When a party breaches its contractual duties, it can be sued for civil damages. Breach of contracts can occur in many areas, including business and property disputes, employment actions, intellectual property conflicts, and divorces. Disputes can be resolved through various formal and informal processes. However, if all other measures have failed to resolve a dispute, filing a lawsuit may be necessary. Understanding how the Thai legal system works and available options for recourse is important for businesses looking to protect their interests in Thailand.

Civil lawsuits in Thailand typically begin with the plaintiff filing a complaint. The court will then schedule witness hearings where both parties present their evidence. Depending on the type of case, the court may also require participants to undergo mediation before proceeding to trial.

A successful civil case will often result in a monetary compensation for the complainant. This compensation is designed to restore the aggrieved party to the position they would have been in had the breach not occurred, and includes actual financial losses incurred. In addition, the court may award punitive damages to deter future similar breaches. These damages are referred to as stipulated or liquidated damages, and can be adjusted by the court if deemed unreasonable.

Property disputes

In Thailand, property disputes arise from a variety of situations. Some involve ownership of land or property rights, such as encroachment. This can occur when one person builds over another’s property boundary, invading their privacy or ruining their view. The law allows for a judge to determine the case based on evidence adduced by the plaintiff and defendant.

Courts typically encourage settlement through mediation, especially in labour disputes and general civil cases. However, in some circumstances, the courts may choose to conduct a preliminary or investigative hearing to examine the claim and decide whether it has merit. The court also imposes fines to penalise parties that violate the terms of a judgment or order.

The Thai judicial system does not utilise juries, and judges decide the outcome of a trial based on their judgement of the evidence presented by both parties. In cases where the plaintiff and the defendant are not satisfied with a judge’s verdict, they can file an appeal to the Court of Appeal or the Supreme Court.

In Thailand, a decision of a foreign court may be used as evidence in a trial if the judgment is authenticated by the relevant embassy or consulate and translated into Thai. The same goes for the decision of a domestic court, which can be used in a legal proceeding.

Defamation

Defamation is an offence under Section 423 of the Thai Penal Code, which defines defamation as “a statement made publicly that damages another’s reputation or credit in any way”. It can be a criminal or civil offence depending on the severity of the defamation. Defamation can be done through written or spoken words, and in addition to the penalties outlined in the Penal Code, offenders could be ordered to pay compensation to the victim.

In recent years, defamation cases have become commonplace in Thailand and have been used to target individuals who raise concerns about human rights violations, labour laws, corruption, or government or corporate failures. In fact, one company alone has been responsible for 39 cases, many of them concerning civil or criminal defamation, against a wide range of people including migrant workers, human rights defenders, journalists, and academics.

For example, a pineapple processing company was involved in a long-running legal battle with British labour activist Andy Hall after he exposed the mistreatment of the company’s workers. He faced repeated charges – sometimes guilty, and sometimes not – for over seven years until he decided to leave Thailand because the endless court appearances were too stressful.

The defamation laws in Thailand are strict and can have serious consequences for foreigners living or working in the country. It’s essential to be aware of the laws and the cultural norms before launching into any public comments. It’s also worth looking for a lawyer who has experience in out-of-court mediation to help you avoid lengthy legal proceedings.

Dispute Resolution in Thailand

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While Thailand is not considered to be a litigious society, many disputes still end up in Thai courts. To unclog court dockets, the Thai government has implemented policy initiatives to encourage the use of alternative dispute resolution methods.

In a mediation, parties select an arbitrator or panel who reviews evidence and arguments to make a binding decision. This provides a more predictable and quicker route to resolution than litigation.

The Judicial System

The judicial system in Thailand is adversarial with the courts handling both civil and criminal cases. There are three tiers of courts in Thailand: Courts of First Instance, the Courts of Appeal and the Supreme Court.

In the case of a criminal matter, the presiding judge has sole discretion to decide guilt or innocence as well as impose a sentence on the defendant. The jury system does not exist in Thailand. The courts in Thailand are mandated to operate impartially and there are many laws in place that protect judicial independence. Judges are not permitted to have vested interests in a case and are also subject to a code of ethics governing their conduct with disciplinary proceedings if they breach this code.

Court proceedings are conducted in the Thai language and witnesses must attend to affirm their testimony as well as be cross-examined. In some proceedings, the judge will actively participate in examining witnesses to ensure impartiality.

Generally, hearings are scheduled in a series of consecutive days and will continue until all evidence has been heard by the court. Alternatively, the judge can use an e-Hearing system which allows witness examinations to be conducted via video and audio recording systems.

In class action proceedings, the court will utilize an inquisitorial system which allows the court to search for additional facts. The court will render a decision at the end of the case and will issue a judgment setting out its findings.

Pre-Action Protocols

The general organisation of Thailand’s courts is adversarial. However, some courts, such as the Administrative Court, Labor Court, Constitutional Court, and Criminal Court for cases involving corruption and misconduct, operate under an inquisitorial system. This means that the courts can order investigations and gather evidence in a non-adversarial manner.

The courts’ jurisdiction in civil matters is determined by applying the principle of actor sequitur forum rei. This means that a claimant can only commence proceedings in the defendant’s court where: (i) the cause of action arose in the jurisdiction of the defendant’s forum; and/or (ii) the defendant is domiciled in the jurisdiction of the defendant’s forum.

Litigants can seek interim relief by filing a petition with the court. The court will examine the request and determine whether it is appropriate to grant such relief. Interim relief can include ordering a freeze on assets or orders to seize property. The court will also consider whether it is appropriate to grant security for costs.

The courts’ powers to render rulings on: (i) damages according to the circumstances and gravity of the breach; (ii) default interest as accrued from the date of committing the wrongful act or due date of the debt; (iii) litigation costs including witness fees, lawyer’s fees and other costs payable by law; (v) specific performance; and/or (vi) injunctions on actions are extensive.

Mediation

Achieving a satisfactory resolution to disputes can take time and money. It is also important to preserve relationships, and mediation is often a better solution than lengthy litigation, especially where it does not involve adversarial proceedings.

As such, it is a key tool in our ADR toolbox, and is particularly effective for Thailand dispute resolution with clients in the commercial, energy, construction, insurance, hotels, real estate, telecommunications, media technology and other sectors where relations can become complex. At DFDL, our team has extensive experience in advising and conducting mediations in the context of disputes across all these industries.

Both out-of-court and court-annexed mediation is available in Thailand. The courts, embracing the culture of the wider Thai society, strongly encourage mediation. Judges often order that the parties to a case attend court-annexed mediation before commencing a full hearing of the matter and they also frequently facilitate conciliation between disputing parties.

In addition, the Dispute Mediation Act 2562 (2019) has introduced an out-of-court mediation process for civil disputes with a value of not more than THB 5 million. If the dispute is resolved by mediation, an enforceable compromise agreement can be filed with the court. This enables parties to save time and money and avoid the long-term impact of litigation on their business relationship. In addition, the enforceable compromise agreement can also protect the rights and interests of disputing parties.

Arbitration

In Thailand, arbitration is one of the most common dispute resolution mechanisms in international commercial transactions. Arbitration is especially favored in the energy, mining and infrastructure sectors due to the preponderance of cross-border business. Arbitration proceedings are similar to litigation, with the disputing parties appointing an arbitrator or arbitration panel to hear evidence and make a decision, in accordance with rules agreed upon by the disputing parties.

While negotiation and mediation are often the preferred methods of alternative dispute resolution in the energy, mining and construction industries, most real estate and construction contracts in Thailand would contain a structured arbitration clause in case a conflict arises. The courts have not been a favored method of dispute resolution in these sectors in Thailand, and the courts are largely adversarial.

However, there are several hindrances to the adoption of arbitration in Thailand that need to be addressed. First, the legal profession and businesses need to be trained on what arbitration is, how to include an arbitration clause in a contract and the benefits of using an arbitration procedure.

Second, the Thai Arbitration Law has not been amended to align with international standards and best practices, which hinders efficiency in arbitration procedures. Third, there needs to be greater effort by the TAI and THAC to promote a culture of international arbitration in the country through training, seminars/webinars and activities with various industry sectors.

Trade Disputes in Thailand

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Trade Disputes in Thailand can arise from many causes, including differences in international and domestic trade agreements. Fortunately, there are a number of ways to resolve such disputes outside of the court system.

Depending on the type of case, courts may require mediation before witness hearings. This is the case for labor cases and some general civil cases.

Intellectual property laws

Businesses operating in Thailand face a variety of legal disputes, from contractual disagreements to intellectual property violations. Developing strategies for anticipating and addressing these disputes can help businesses avoid costly repercussions. Engaging experienced legal counsel familiar with Thai trade laws and international regulations is crucial. Including clear dispute resolution clauses in contracts is also advisable, and maintaining thorough documentation of commercial transactions, correspondence, and compliance can support claims or defenses if required.

Intellectual property (IP) disputes often involve allegations of infringement, such as trademarks, copyrights, and patents. IP protection can be enforced through civil and criminal proceedings.

The establishment of the Intellectual Property and International Trade Court demonstrates Thailand’s commitment to safeguarding intellectual property rights and promoting fair international trade practices. The specialized court has the authority to investigate and resolve disputes related to international trade. In addition, the court can impose fines and/or imprisonment.

Customs Act

The Customs Act governs all imports and exports in Thailand. It includes provisions for audits, investigations and the imposition of fines for offences such as non-compliance with customs procedures and false declarations. However, an offender can avoid a fine by demonstrating that the offence was not wilful or reckless.

The primary basis for calculating the value of imported goods in Thailand is their transaction value declared by the importer. This value may be adjusted by removing or adding certain elements, such as royalties and license fees. It is also possible to add design or development fees that are related to the goods.

In this dispute, the Philippines claimed that Thai Customs had violated their substantive and procedural obligations under Article X:3(a). They claimed that the practice of having government officials simultaneously serve on the board of TTM was inconsistent with their obligation to administer their customs laws in a reasonable and impartial manner.

Negotiation

Trade disputes are an inevitable part of global business, but they can be resolved with a structured legal framework. Negotiation, mediation, arbitration, and litigation are available methods of dispute resolution in Thailand. By prioritizing open communication and compliance with trade rules, businesses can prevent disputes from arising and maintain smooth trading relationships.

Disputes can arise from a variety of causes, including disagreements over contract terms, intellectual property rights, and tariffs. These conflicts are regulated by Thai laws and international trade agreements. Understanding the causes of trade disputes and their resolution mechanisms can help businesses avoid conflict and maintain a competitive edge in Thailand’s marketplace.

To resolve a dispute, parties must first negotiate. Generally, this process is conducted in the presence of a third party to ensure fair and impartial proceedings. In addition, both parties must understand the legal and cultural context of their dispute to achieve a satisfactory resolution. The services of a legal advisor can be invaluable in this regard.

Mediation

While disputes are an inevitable part of the business world, they can jeopardize your business and hinder progress toward success. However, you can avoid these disputes by negotiating a settlement through mediation. This process is a highly effective method of Thailand dispute resolution, as it allows the parties to discuss their issues and find solutions that are mutually acceptable. It also reduces costs and provides flexibility for both parties.

A professional mediator is impartial and promotes productive conversation between the parties. They are also trained to help the parties identify their cases’ strengths and weaknesses. They can even help the parties resolve their disputes outside of court.

Mediation can be initiated before filing a case or at any stage of litigation. It is available in most civil and commercial disputes and some criminal disputes involving compoundable offences. It also helps preserve relationships between the disputing parties.

Arbitration

Arbitration is a form of dispute resolution that takes place outside of the court system. The parties select an arbitrator or panel of arbitrators to review evidence and listen to arguments before making a binding decision called an “arbitral award.” Arbitration can be less expensive and quicker than litigation. It also offers more privacy than a court trial and can avoid public disclosure of sensitive information. It is a good idea to discuss and stipulate arbitration clauses during the drafting of contracts.

Common commercial disputes in Thailand include debt collection, intellectual property, shareholder disputes and consumer disputes. Having a basic understanding of the different types of commercial disputes and their resolution mechanisms will help businesses navigate the country’s unique legal framework. Additionally, it is helpful to have a lawyer experienced in Thai commercial law to protect the business’ interests and ensure compliance with local laws.

Litigation

The court system in Thailand is adversarial and based on the submission of evidence. Judges play a critical role in case management, and often question witnesses directly during trial hearings. In addition, the winning party is usually able to recover a significant portion of its legal fees. However, the amount recovered varies from case to case, and is based on the complexity or simplicity of the case and lawyer remuneration guidelines set out in the judicial system.

Businesses may be involved in disputes with trading partners due to a variety of factors. For example, disagreements over pricing or quality can result in trade disputes. Intellectual property infringement, such as piracy and counterfeiting, can also lead to a dispute. Other common disputes include shareholder conflicts and consumer complaints. Resolving trade disputes promptly helps maintain positive trading relationships and economic stability, and ensures fair competition and market access.

Labor Disputes in Thailand

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For businesses seeking longevity and success in Thailand, aligning with labor laws is a critical step. It ensures a legal work environment, minimizes disputes, and supports employee welfare.

Understanding the complex rules of labor law in Thailand is essential for employers seeking full compliance and employees looking to navigate the regulations. It is recommended to consult with a lawyer specialising in Thai labor law.

Negotiation

Labor disputes are a common occurrence in workplaces around the world, and Thailand is no exception. Disputes can arise from many different issues, including wage disagreements, working conditions, and termination procedures. Understanding the legal framework, types of disputes, and resolution mechanisms is vital for both employers and employees to ensure fair treatment.

One way to resolve a labor dispute is through negotiation. This method allows both parties to present their cases and provide evidence to a neutral party who can make a decision. It is also faster and less formal than legal proceedings. If the case cannot be resolved through negotiation, it can be referred to a labor dispute committee or the Ministry of Labor.

Lastly, the labor law of Thailand outlines a number of resolution procedures, including mediation and arbitration. The former involves a representative from the Department of Labor Protection and Welfare who can help both parties reach an agreement. The latter is a process in which both parties agree to submit their dispute to a third-party arbitrator who will make a binding decision.

To avoid labor disputes, both domestic and foreign businesses should familiarize themselves with the country’s labor laws. This includes a thorough understanding of wage regulations, working conditions, and termination procedures. In addition, they should have access to a network of resources and expert assistance to address any concerns. Non-compliance can not only result in fines, but it may also damage a company’s reputation and limit its growth potential.

Mediation

In Thailand, mediation involves a neutral third party who helps parties in the dispute reach a mutually acceptable solution to their conflict. The process is typically quicker and less expensive than litigation. The majority of disputes resolve through the mediation process. In cases where a settlement is not reached, the mediator can suggest that both parties submit to arbitration.

Wages and Benefits: Disagreements over salary increases, bonuses, and financial benefits are common causes of labor disputes in Thailand. Employees may seek higher compensation to keep pace with rising living costs, while employers may be unable to afford the additional wages. Working Conditions: Issues related to health and safety, excessive working hours, and inadequate facilities can also lead to disagreements between employees and employers.

Legal Awareness: Often, workers are not aware of their legal rights or the mechanisms available to resolve conflicts. This can hinder open discussions and slow down the process of dispute resolution. Cultural Factors: In Thai culture, there is a strong emphasis on maintaining harmony and avoiding confrontation. This can discourage employees from pursuing their grievances or participating in formal Thailand dispute resolution processes.

If negotiations and mediation are unsuccessful, the parties can escalate their dispute to the Labor Court. The court specializes in labor-related matters and provides an impartial and efficient dispute resolution process. The court can hear individual and collective disputes, as well as contract disputes and labor law violations. In addition, the court can order the parties to participate in mediation.

Arbitration

Disputes can occur in any workplace, and the best way to minimize them is by having proper legal frameworks and dispute resolution processes in place. Both employers and employees must understand the legal landscape in Thailand and be familiar with its dispute resolution mechanisms to avoid potential legal liabilities.

Ideally, both parties should try to resolve any disputes through negotiation and mediation. During this process, representatives from the Ministry of Labor may be involved to facilitate a mutual agreement between disputing parties. If this proves to be unsuccessful, the matter can be escalated to the Labor Courts or the Ministry of Labor to be adjudicated. These institutions are designed to handle employment-related cases in a more streamlined and expedited manner compared to general courts.

Both parties can also seek redress through arbitration, which is a less formal process than litigation. The arbitrator will listen to both sides of the story and make a ruling on the matter. If either party is not happy with the decision, they can file an appeal within seven days of receiving it.

Both parties must be aware that contingency fee agreements are generally prohibited in Thai law. While some rulings allow for this type of arrangement, the majority of the decisions discourage them. For this reason, it is recommended to consult with a lawyer specializing in labor laws to ensure that your company’s termination process adheres to local regulations.

Litigation

The legal system in Thailand has a structured set of labor laws that safeguard the rights and interests of both employers and employees, thus ensuring a balanced working environment. This framework also helps to prevent conflicts from escalating into disputes that may require legal proceedings.

The formal judicial process in the country begins with the filing of a complaint, whereby the plaintiff or defendant must submit evidence to support their case. The conciliation and trial phases follow, during which the court hears from witnesses and evaluates all relevant evidence to reach a final judgment.

Class action lawsuits are permissible in the country, allowing multiple parties who share similar facts and legal principles to pursue their claim together. In order to be certified, the class must consist of at least 20 persons who have suffered damages as a result of the same issue or act in question.

The complexities of labor law in Thailand can be overwhelming, and it is essential for both employees and employers to have access to resources and expert assistance. Maintaining open communication channels and using mediation as a tool to resolve conflict can help avoid disputes, while compliance with labor laws is crucial to upholding ethical workplace practices. Non-compliance can have significant reputational impacts for a business operating in the country, making it important to regularly consult with legal professionals to stay up to date on the latest developments.

Breach of Contract in Thailand

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Breach of contract is a common legal issue in Thailand, affecting both individuals and businesses across various sectors. Understanding the legal framework, types of breaches, remedies, and recent developments in Thai contract law is crucial for anyone involved in contractual agreements. This guide provides a comprehensive overview of breach of contract in Thailand, covering key aspects and implications for all parties involved.

Legal Framework for Breach of Contract in Thailand

1. Civil and Commercial Code (CCC)

The primary law governing contracts and breaches of contracts in Thailand is the Civil and Commercial Code (CCC). The CCC outlines the general principles of contract law, including formation, performance, and enforcement of contracts, as well as the consequences of breaches.

2. Contract Formation and Validity

For a contract to be valid under Thai law, it must involve an offer, acceptance, consideration (something of value exchanged), and mutual intent to be legally bound. Certain types of contracts must also be in writing and signed by the parties, such as real estate transactions and contracts that cannot be performed within one year.

Types of Breach of Contract

1. Material Breach

A material breach occurs when one party fails to perform a fundamental aspect of the contract, thereby defeating the purpose of the agreement. This type of breach often justifies the non-breaching party in terminating the contract and seeking damages.

2. Minor Breach

A minor breach, or partial breach, involves a failure to perform a small or non-essential part of the contract. While the non-breaching party may still be entitled to damages, the contract generally remains in force.

3. Anticipatory Breach

An anticipatory breach occurs when one party indicates, either explicitly or implicitly, that they will not perform their contractual obligations when due. The non-breaching party can treat this as an immediate breach and seek remedies without waiting for the actual failure to perform.

4. Actual Breach

An actual breach happens when one party fails to perform their contractual duties by the due date or performs them inadequately. This can lead to legal action for damages or specific performance.

Remedies for Breach of Contract

1. Damages

Damages are the most common remedy for breach of contract. They aim to compensate the non-breaching party for losses incurred due to the breach. There are several types of damages available under Thai law:

  • Compensatory Damages: These cover direct losses and costs incurred as a result of the breach.
  • Consequential Damages: These cover indirect and foreseeable losses, such as lost profits.
  • Liquidated Damages: Pre-determined amounts specified in the contract to be paid in case of a breach.

2. Specific Performance

Specific performance is an equitable remedy where the court orders the breaching party to perform their contractual obligations. This remedy is typically used when damages are inadequate to compensate for the breach, such as in unique goods or property transactions.

3. Rescission

Rescission allows the non-breaching party to terminate the contract and be restored to their original position before the contract was formed. This remedy is suitable when a breach is so severe that it undermines the entire agreement.

4. Reformation

Reformation involves modifying the contract to reflect the true intentions of the parties. This remedy is used when the original contract contains errors or ambiguities.

Process of Filing a Breach of Contract Claim

1. Negotiation and Mediation

Before pursuing legal action, parties often attempt to resolve the dispute through negotiation or mediation. Mediation is a voluntary process where a neutral third party helps facilitate a mutually acceptable resolution.

2. Filing a Lawsuit

If negotiation and mediation fail, the non-breaching party can file a lawsuit in a Thai court. The lawsuit must detail the contractual obligations, the nature of the breach, and the damages sought.

3. Court Proceedings

During court proceedings, both parties present evidence and arguments to support their positions. The court will examine the contract, the circumstances of the breach, and the applicable laws to determine liability and appropriate remedies.

4. Judgment and Enforcement

The court issues a judgment outlining the remedies awarded to the non-breaching party. If the breaching party fails to comply with the judgment, the non-breaching party can seek enforcement through legal channels.

Challenges and Considerations

1. Proving a Breach

One of the main challenges in breach of contract cases is proving that a breach occurred and that it caused measurable harm. This often requires detailed documentation and credible witness testimony.

2. Interpretation of Contract Terms

Disputes may arise over the interpretation of contract terms. Courts in Thailand apply principles of good faith and reasonableness when interpreting contracts, considering the intent of the parties and the context of the agreement.

3. Cultural and Business Practices

Cultural factors and local business practices can influence contract negotiations and the handling of breaches. Understanding these nuances is crucial for foreign businesses operating in Thailand.

4. Statute of Limitations

The statute of limitations for breach of contract claims in Thailand is generally 10 years for written contracts and 5 years for verbal contracts. It is important to file claims within these time limits to avoid losing the right to seek remedies.

Recent Developments and Reforms

1. Contract Law Reforms

Recent reforms in Thai contract law aim to enhance the clarity and fairness of contractual agreements. These reforms include updates to consumer protection laws and greater enforcement of contract terms.

2. Digital Contracts and E-commerce

The rise of digital contracts and e-commerce has led to new legal challenges and considerations. Thailand has been updating its legal framework to address issues related to electronic signatures, online transactions, and data privacy.

3. International Trade Agreements

Thailand’s participation in international trade agreements and regional economic partnerships has influenced contract law and Thailand dispute resolution practices. These agreements often include provisions for arbitration and cross-border enforcement of judgments.

Conclusion

Breach of contract in Thailand is a multifaceted legal issue that requires a thorough understanding of the legal framework, types of breaches, and available remedies. Whether dealing with material or minor breaches, parties must navigate the complexities of contract law to seek appropriate remedies. Recent developments in Thai law, including reforms and the rise of digital contracts, continue to shape the landscape of contractual agreements and dispute resolution. For businesses and individuals alike, being well-informed about these aspects is essential to protecting their rights and interests in contractual relationships.

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