In case of disputes, there are three legislations that are usually referred to, the commercial code, the civil code and the bankruptcy law. These disputes are settled internally, decisions of foreign courts are never honored. Thailand courts handle all disputes including the enforcement of property or contract rights. It has been proven to be an effective system despite the relatively slow process.

 

Arbitration Act

Some companies establish their own arbitration agreements. That is legally allowed in Thailand. In fact, Thailand has been enforcing the Convention on the Settlement of Investment Disputes between States and Nationals of other States since 1985. In 2002, Thailand established its own Arbitration Act which follows the basic principles of the Unite National Commission on International Trade Law (UNCITRAL). The Arbitration Office of the Ministry of Justice is in-charge of the enforcement of the Arbitration Act.

 

The Bankruptcy Act

The Bankruptcy Act allow for the reorganization of loans as the first option instead of automatic liquidation of assets. Creditors have the option of extending their loans through insolvent firms without giving up the right to get reparation on future liquidation. Several other amendments were done on different years to implement the following:

 

  • increase minimum levels for bankruptcies of private individuals and corporation and to shrink the bankruptcy status from 10 years to three years
  • stricter rules on how debtors may come out of their status
  • limit the number of appeals against the execution of the bankruptcy to avoid frivolous appeal just to delay the declaration of bankruptcy
  • establish the Central Bankruptcy court for all metropolitan cases and the Regional Bankruptcy Court for all cases outside of the metropolitan area. The Bankruptcy Court also takes cases of all bankruptcy that has criminal issues
  • use of electronic communication equipment to hasten the exchange of information between courts