A. Legislation, Trends and Tendencies
International arbitration in Thailand continues to be governed by the Thai Arbitration Act B.E. 2545 (2002), to which no legislative amendment has been made since the time of its enactment.
A.2 Trends and Tendencies
In addition to the Thai Arbitration Institute (TAI) under the Office of the Judiciary and the Office of Arbitration Tribunal established by the Board of Trade of Thailand, in 2015 the Thailand Arbitration Center (THAC) was established, pursuant to the Act on Arbitration Center (2007), in order to support and promote international arbitration, with the aim of providing an arbitration center in Thailand that meets international standards and can serve as the center of arbitration in the ASEAN countries.
It is difficult to track the practical implementation of the Thai Arbitration Act in Thailand, as the vast majority of cases remain confidential and institutions administering arbitrations in Thailand do not publish case records. Although a limited number of cases become a matter of public record when their enforcement is challenged in Thai courts, in 2015, there were no notable cases that became a matter of public record.
C. Costs in International Arbitration
C.1 Allocation of Costs
Sections 46 and 47 of the Thai Arbitration Act provide the legal basis for the treatment of fees, expenses and remuneration in arbitration proceedings conducted in Thailand. Pursuant to Section 47 of the Act, an arbitration institute is entitled to prescribe fees, expenses and remuneration incidental to arbitral proceedings. Pursuant to Section 46, unless the parties agree otherwise, the fees and expenses incidental to the arbitral proceedings and the remuneration for arbitrators, excluding attorney’s fees and expenses, are to be as stipulated in the award of the arbitral tribunal.
In the event the fees, expenses or remuneration have not been fixed in an award, any party or the arbitral tribunal may petition a competent court for a ruling on the arbitration fees, expenses and remuneration for the arbitrator as it deems appropriate.
Costs do not always “follow the event,” and tribunals exercise discretion when allocating costs. However, customarily, the winning party will be awarded the costs it has incurred. Where the winning party has only partially won its case, the tribunal may award costs on a pro rata basis.
It is noteworthy that an arbitral tribunal is not entitled under the Act to award attorney’s fees, unless otherwise agreed by the parties. Even where the parties do have in place such an agreement, the rules of the relevant arbitration institute may speak to this issue. For instance, the Arbitration Rules of the TAI do not permit an arbitral tribunal to award attorney’s fees and expenses.
C.2 Security for Costs
Under Section 16 of the Thai Arbitration Act, a party may submit a motion requesting the court to issue an order imposing an interim measure in order to protect its interest before or during the arbitration process. If the court decides that, had such proceedings been conducted in court, the court would have been able to issue the order, the court may grant the request. If the order for an interim measure is issued by the court, the party filing the motion must start the arbitral proceedings within 30 days from the date of the court order or within the period of time designated by the court, failing which the court order is deemed to be cancelled.
Pursuant to Section 253 of the Thai Civil Procedure Code, if a plaintiff is not domiciled or his or her business office is not situated in Thailand and the plaintiff does not have property liable to execution within Thailand, or there is strong reason to believe that the plaintiff will evade the payment of cost and expenses if he or she loses the case, the defendant may, at any time before judgment, apply to the court for an order directing the plaintiff to deposit money as security for the payment of costs and expenses for which the plaintiff will be liable if he or she loses the case. This rule is also applicable at the appellate stages.
Taking Section 16 of the Act in conjunction with Section 253 of the Thai Civil Procedure Code, in certain circumstances, a respondent may request the court to issue an order requiring the claimant to provide security for costs at the outset of or during an arbitral proceeding.
C.3 Recovery of Costs
As described in C.1, unless otherwise agreed by the parties, there are restrictions on an arbitral tribunal’s right to award attorney’s fees and expenses under the Thai Arbitration Act.
Aside from attorney’s fees and expenses, the tribunal will apportion costs (e.g., administrative secretariat fees, fees to subpoena witnesses, audio recordings and transcripts) and the arbitrator’s fees between the parties, in the tribunal’s sole discretion. The arbitral tribunal also has discretion to award other forms of costs, such as witnesses’ travelling expenses. Parties seeking recovery of costs are expected to furnish evidence of those costs, such as invoices and receipts.
- Chirachai Okanurak is the Co-Head of the Dispute Resolution Practice Group in Baker & McKenzie’s Bangkok office and is a highly regarded practitioner in the field of arbitration who has accumulated vast experience working in the areas of civil claims, corporate compliance, insurance, construction disputes, bankruptcy and debt restructuring.
- Pisut Attakamol is a partner in the Dispute Resolution Practice Group in Baker & McKenzie’s Bangkok office specializing in arbitration. He has expertise in various types of complex commercial disputes, corporate litigation, telecommunications law and regulations, litigation in the Administrative Court, employment protection law and employment disputes.
- Timothy Breier is a partner in the Dispute Resolution Practice Group in Baker & McKenzie’s Bangkok office who works on a variety of projects and cases for international clients, primarily involving international arbitration, compliance and anti-corruption, construction matters, bankruptcy and contractual disputes.