Resort to court action is a legitimate approach to the resolution of controversies in both the public and business sectors. With the influx of joint public and private investments, new businesses, and private property purchases, Thailand has also seen the inevitable rise in the number of litigations. These controversies lead to the clogging of court dockets. Because of the heavier workload of the judiciary, the resolution of cases necessarily take longer to finish.
Same as in many countries, Thailand has encouraged the use of Alternative Dispute Resolution (ADR) in order to resolve controversies before the issue proper is formally heard by the court. In fact, Thailand has established an Alternative Dispute Resolution Office under the Office of the Judiciary to oversee the application of ADR in the country.
ADR is any kind of mechanism used for settling disputes rather than litigating a controversy in court. ADR is encouraged because the judiciary understands that the longer a dispute persists, the more damage it causes not only to the parties, but to the economy in general. It somewhat gives power to the parties in controversy to decide the fate of their dispute, rather than to have the courts adjudicate on their differences.
Arbitration and Mediation are two forms of Alternative Dispute Resolutions employed by the judiciary in order to ease the congestion in court dockets. Arbitration necessitates the selection of a third party (to be called the Arbiter) who will hear the controversy and render a legally-binding judgement. On the other hand, Mediation involves the assistance of an unbiased mediator who will help the parties reach a mutually-acceptable agreement.
Mediation is often resorted to in small claims cases where legal costs may be higher than the award. Mediation is funded by the Office of the Judiciary. The parties in mediation accrue minimal expenses.
The Mediator plays a vital role in the process. Not only does he keep the peace between the parties, he likewise assists the participants in designing a solution that would mutually benefit them.
An agreement is reached between parties after mediation. The agreement must specify all the terms and conditions which the parties must fulfill after the mediation is wrapped up. If a party fails to comply with the agreement, the other party may come to court for enforcement of the mediation agreement.
In contrast, Arbitration is employed in high-value business controversies. Unlike in mediation, parties in Arbitration would need to shoulder higher expenses such as the Arbiter’s fee and Institution fees.
Since 2002, Thailand has followed the UNCITRAL Model Law on International Commercial Arbitration for its own Arbitration mechanism. The country now adopts the same framework for domestic and international arbitration in order to avoid complications in interpretation and execution. The present Arbitration procedure in Thailand gives the parties the autonomy to frame proceedings which they would deem to be most efficient. It also ensures that parties will have reasonable opportunity to be heard of their claims and arguments.
Since 2000, foreigners may already serve as arbiters. Foreign lawyers may also represent their clients in Arbitral proceedings.
Arbitration has been increasingly drawing attention in Thailand. Aside from the business sector, some government entities have likewise used this mechanism to reduce the number of possible litigation in Thailand, like the Department of Insurance, the Department of Intellectual Property and the Security and Exchange Commission.
The Court is responsible for enforcing Arbitration Agreements in case such is afforded in the parties' contract. It has the duty to dispose of a filed case if it finds out that the agreed arbitration has not been availed of. The court may also appoint an arbiter in case the parties fail to agree on the appointment.
While arbitral agreements cannot be considered as legal precedents, the courts and the judicial system have undeniably regarded the importance of arbitration, as well as the essential role of arbitral tribunals.