The Thai Arbitration Institute has revised and reissued its arbitration rules to take account of recent changes in Thai arbitration law. The new rules came into force on 2 May 2003. In a related development, the Office of Judicial Affairs has published English-language translations of the new rules, the Arbitration Act 2002 and the Code of Ethics for Arbitrators.
Thailand’s arbitration laws were comprehensively revised last year by a new Arbitration Act that came into force on 30 April 2002 to replace outdated legislation from 1987. The Arbitration Act 2002 is based substantially on the UNCITRAL Model Law, reflecting a general trend around Asia. The Act was well received in Thailand and beyond.1
Following the enactment of the new law it became clear that it was also necessary to review the arbitration rules of the Thai Arbitration Institute (TAI), one of the two main arbitration institutes in Thailand. The TAI’s rules had been in force since the institute was established in 1990 and they were not consistent in all respects with the new Model Law-based legislation. The TAI’s revised and updated rules came into effect on 2 May 2003.
Rule 5 sets out the TAI’s recommended arbitration clause as follows:
Any dispute controversy or claim arising out of or relating to this contract or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the Arbitration Rules of the Thai Arbitration Institute, Office of the Judiciary applicable at the time of submission of the dispute to arbitration and the conduct of the arbitration thereof shall be under the auspices of the Thai Arbitration Institute.
The reference in this model clause to the Office of the Judiciary reflects recent changes in responsibility for the TAI, which has been transferred from the Ministry of Justice to the Office of the Judiciary, a constitutionally independent secretariat. This was intended to emphasise the TAI’s independence from the Government. To avoid any possible confusion stemming from these changes, the new rules provide that any existing arbitration agreement which refers to arbitration under the rules of the TAI, Ministry of Justice (this was the wording of the TAI’s own former model clause) shall now be deemed to refer instead to the rules of the TAI, Office of the Judiciary. The new rules now apply to all arbitrations organised by the TAI except where the parties agree to use other rules with the consent of the Director of the Alternative Dispute Resolution Office (the ADRO is the section within the Office of the Judiciary that administers the TAI).
In many respects the new rules are similar to the old ones. Changes appear to have been limited to matters where developments in the law or arbitration practice necessitated refinement or revision. Some of the main features include:
TAI arbitration proceedings are initiated by sending a statement of claim in prescribed form to the TAI. The Director will review the claim to ensure that it complies with the formal requirements of the rules. If he considers that it does not conform, he may return it to the claimant for redrafting. Unlike the old rules, the new rules do not require the TAI to convene a preliminary meeting at which to explore the possibilities for settlement or conciliation.
Appointing the tribunal
The rules state that "the arbitral tribunal shall be composed of one or three members", and the Act provides for a sole arbitrator in default of agreement. A sole arbitrator will be appointed by a list system, with the parties and the TAI each nominating three names and the parties then ranking those nine names in order of preference. Where there is a three-member tribunal, each party will nominate one arbitrator and the two nominated arbitrators will choose the third to act as Chairman. In all cases where the agreed procedures fail for any reason, the ultimate appointing authority is the Thai court.
Challenging the tribunal
TAI rules follow UNCITRAL rules in providing for a right to challenge arbitrators if circumstances exist that give rise to justifiable doubts as to the impartiality or independence of the arbitrator. There is a 15-day time limit on the right of challenge. The tribunal itself will consider any challenges, with a right of recourse to the Thai court if the challenge is unsuccessful.
As with the Model Law and UNCITRAL Rules, the Thai Arbitration Act and TAI rules do not contain detailed procedural requirements, instead giving the tribunal wide discretion to decide how to proceed. One unusual feature worth mentioning is the express requirement that "The tribunal shall note down the testimony of the witnesses and read it to the witnesses. Thereafter, the witnesses shall sign the memorandum. The signed memorandum shall be kept in the dossier of the case."
Neither the rules nor the Act allow the tribunal to order interim measures of protection. These must be sought from the Thai court.
The rules require the award to be made within 180 days of the appointment of the last arbitrator. There is no express provision for extension of this period but, in practice, this requirement (which also appeared in the old rules) is usually varied by agreement in the arbitrators’ terms of reference. That aside, TAI rules generally follow UNCITRAL rules with regard to making the award and in relation to subsequent requests for interpretation, correction and addition.
Rule 36 provides that "costs and expenses … as well as arbitrator’s fees but not including attorney’s fees and expenses shall be specified by the arbitral tribunal in its award". Thai law does not generally recognise a right to recover legal costs, and so parties wishing to recover legal fees should include an express provision to that effect in their arbitration agreement, by way of variation to the rules.
Crucially, the TAI’s arbitration rules must be read in conjunction with the Arbitration Act 2002. Otherwise, a comparison with, for example, the UNCITRAL Arbitration rules will suggest that the TAI has left several gaps, whereas in fact the relevant issues are usually covered satisfactorily in the statute. For example, the TAI rules do not contain provisions addressing the date of commencement of the arbitration, the place of arbitration or challenges to the jurisdiction of the arbitrators. These issues are covered instead in sections 24, 26 and 27 of the Act.
The TAI’s new rules are welcome. They are another indication of the progressive developments in Thai arbitration law and practice in recent years. Further evidence may be found in the TAI’s Code of Ethics for Arbitrators, which now applies formally to all arbitrators acting under TAI rules and requires, for example, that arbitrators must disclose any direct or indirect financial or personal interests in the outcome of the arbitration, and any existing or past financial, business, occupational, family or social relationships between on the one hand, the arbitrator, his family, his employers or business partners and, on the other hand, any party, attorney or witness in the case, insofar as those relationships are likely to affect the arbitrator’s independence or impartiality. The Code is designed to ensure that arbitrators conduct themselves and the TAI’s proceedings according to high ethical standards.
Finally, the ADRO has recently published its own English-language translations of the Arbitration Act 2002, the new TAI rules and the TAI’s Code of Ethics. In relation to the Act, there have until now been several unofficial translations by various law firms in Bangkok, with a number of potentially significant differences between them. The ADRO’s versions are now likely to become the de facto ‘official’ translations, although it must be said that there are still some uncertainties in some of the language. The original Thai-language versions remain the only authoritative and truly official texts.
1 For an overview seewww.herbertsmith.com/publications/publications.asp?id=97
By Alastair Henderson