The use of guerrilla tactics in disputes in Thailand has long been a popular topic of discussion amongst regional arbitration practitioners in Southeast Asia, none more so than in connection with conducting an arbitration which has its seat in Thailand. In one notorious instance, now industry folklore, a recalcitrant domestic party deployed such tactics to disrupt a hearing in Thailand resulting in the attendance of immigration officals and the abrupt abandonment of the hearing. Such tactics are unfortunately relatively common in other forms of dispute resolution in Thailand.
Whilst attempts have been made to rehabilitate Thailand's image as a competitive hub for international arbitration by the government, for example the updating of the Thai Arbitration Institute's (TAI) arbitration rules in 2017 and the establishment of the Thailand Arbitration Centre (THAC) in 2015, and by the Courts with the enforcement of arbitral awards against Thai government entities, Thai immigration law has long restricted foreign representatives and arbitrators from freely acting in arbitration proceedings governed by Thai law and conducted in Thailand. In the past, foreign representatives and arbitrators were required to go through the onerous process of applying for a work permit. Such restrictions obviously affect disputing parties' freedom to select the most appropriate arbitrator or representative to adjudicate or represent them in that particular dispute, particularly where the substance of the dispute revolves around complex financial or engineering issues.
However, recently two separate legal developments in Thailand may go some way to improving such issues, at least in the context of an arbitration in Thailand.
On 14 April 2019, an amendment to the Thai Arbitration Act ("Amendment") came into law. The Amendment introduces provisions specifically allowing foreign representatives and arbitrators to act in "arbitrations conducted in Thailand by a Thai government agency" (understood, in practice, to be the TAI or the THAC).
Whilst the provisions of the Amendment are still subject to the laws on "working aliens", foreign representatives and arbitrators may now apply for a certificate from either the TAI or THAC for consideration by Thai immigration officials. Such certificates will be valid for the same estimated period of the arbitration proceedings and are renewable. On receipt of such a certificate and during its currency, subject to immigration law, a foreign arbitrator or representative will be permitted to reside in Thailand and entitled to perform their duties in Thailand and, according to the Amendment, will be issued a work permit.
As well as the Amendment, the Ministry of Commerce recently added "Alternative Dispute Resolution" to the industries considered to be targeted industries, the so-called "S curve industries". Foreigners working in any of targeted business may be eligible for a Smart Visa which is designed to attract highly skilled manpower and investors to help accelerate development. Benefits of the Smart Visa include: no work or re-entry permits being required, and the introduction of annual reporting requirements (rather than the usual quarterly). The Smart Visa also introduces entitlements to the visa holder's family to reside and work in Thailand (provided the work is not restricted to foreigners), and is renewable on a four-year basis.
Whilst these are positive developments, there remains many uncertainties as to how the draft regulations will be interpreted by officials in practice. For example, it is still not clear if the Alternative Dispute Resolution category for the Smart Visa only covers arbitration, or whether it will be expanded to include mediation. Likewise, it is uncertain whether other Thai government agencies which conduct arbitrations other than the TAI or THAC, such as the Office of the Insurance Commission, will be able to issue arbitrator's certificates under the Amendment. Nonetheless, it seems that tangible, positive efforts are being made to improve Thailand's image as a regional hub for arbitration, and a jurisdiction where foreign investments can be adequately protected in a domestic forum. The introduction of the Amendment and Smart Visa for Alternative Dispute Resolution should be welcomed as reducing the possibility of disruption of arbitration proceedings as a result of an issue which is, in almost every case, always irrelevant to the substance of the dispute in question.
Visit us at www.mayerbrown.com
Mayer Brown is a global legal services organization comprising legal practices that are separate entities (the Mayer Brown Practices). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; Mayer Brown JSM, a Hong Kong partnership, and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
© Copyright 2019. The Mayer Brown Practices. All rights reserved.
This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.