APRAG Conferences Session 4 Thailand: A future regional hub for mediation.
From the perspectives of the speakers, Thailand is quite supportive of alternative dispute resolution. This can be clearly seen from international laws that Thailand has signed as a member, even internal laws.
(1) International Law: There are two related conventions: the Convention on the adoption and enforcement of 1958 Foreign Arbitration Award or the New York Convention (which Thailand signed in 1959), which is binding upon the Member States to enact internal laws to implement international laws; and the other one is the Convention on the Settlement of Investment Disputes Between the State and Nationals of Other States, 1965 (Thailand signed in In 1958, it was not ratified yet).
(2) Internal law of Thailand: For arbitration, three related laws had been enacted, namely the Arbitration Act, B.E. 2530 (1987), which was repealed afterward, and the Arbitration Act B.E. 2545 was enacted and in force until the present time. Later, it was amended to the Arbitration Act (No. 2) B.E. 2562 (2019). For mediation of disputes, relevant internal laws are also applicable as part of the Code of Civil Procedure, Code of Criminal Procedure, and the Civil and Commercial Code (certified mediation for both civil and criminal cases, but shall be in accordance with the conditions stipulated by law) and the Mediation Act B.E. 2562 (2019)
Besides the matter of the law, Thailand also has agencies that provide and promotes alternative dispute resolution services such as the Office of the Arbitration Council, the Chamber of Commerce of Thailand; the Thai Arbitration Institute, the Office of the Judiciary; and the Thai Arbitration Institute, Ministry of Justice.
Concerns and factors in litigation or arbitration to settle disputes include expenses since usually a cost of litigation in Thailand is much less than that of arbitration proceedings; transparency of an arbitral tribunal, public understanding, which are often considered in the event that it is a matter of public interest or an investment dispute which may make it harder for the public to understand why an alternative dispute resolution process is recommended; and, in terms of parties, arbitration agreements may be removed from settlement terms as they assume that they have to go to court and in the event that the other party fails to comply with an award, or parties may consider a cost to be exorbitant and thus agree by not participating in the process.
Thailand’s Perspective on Mediation/Conciliation: the Singapore Convention is quite necessary since it provides a mechanism for recognition and enforcement of foreign conciliation agreements, which is a similar mechanism to recognition and enforcement of arbitral awards based on the New York Convention.
In addition, conciliation can be a complement to matters which the arbitration process is unable to conduct due to its lower cost and time saving because there is no hearing process, no evidence gathering, and no full arbitral awards as cases with the arbitral. In addition, arbitration is quite more confidential, which may be suitable for cases that are highly relevant to the public interest or politically fragile, As a result, the relationship between the parties can be maintained, and when neither party loses and wins, an outcome will be beneficial for all parties, or a win-win situation with a more flexible process. The past statistical data shows that conciliation may also play a role or become more interested in settlement of relatively wealthy disputes in Thailand; for example, the average annual arbitration case was estimated at 120 cases, and in 2010-2019, international arbitration cases ranged from 300,000 USD to 870 million USD. Thailand will operate the Eastern Special Development Zone Project, which attracts more foreign investors and also lead to disputes arising from investment. In addition, Thailand has signed 35 agreements to promote and protect investments and 12 free trade agreements, causing an increase in foreign investment and leading to an even greater volume of disputes.
The Singapore Convention on Investment Disputes Between the State and Nationals of Other States, as in the Singapore Convention, Article 1 states the scope of the Convention to be applicable only to settle disputes for commercial disputes. However, it does not provide a clear definition of a commercial dispute. In an international academic view, it should be construed widely and included in investment disputes.
Investment disputes can be varied in terms of contents of cases, the level of the conflict, and the extent of commercial interests. There may be disputes in some cases more appropriate to use a conciliation process than in arbitration from factors of maintaining a commercial relationship, duration, agreement of parties, or in the case to avoid obstacles arising from arbitration proceedings.
The conciliation process is unpopular in settlement of investment disputes between states and foreign investors since the conciliation process is based on a voluntary basis, lack of legal frameworks for enforcement of international compromise agreements, lack of the ultimacy, the challenge of a state in making a settlement agreement due to structural issues of public agencies as in a dispute. There are many public agencies involved, difficulty in obtaining budget approvals in the case of a voluntary settlement. However, recently, when the Singapore Convention has been made, it is deemed that the legal framework for enforcement is in accordance with a compromise agreement.
(2) Effects from the Singapore Convention on International Dispute Resolution Process
– Any articles in the Convention will further increase the confidence and trust of the conciliation process. The Convention is not limited to enforcement of the Member States only, but the UNCITRAL model law on the conciliation of international commercial disputes has been billed to develop in parallel with the Convention in order to make the laws a model for conciliation laws for other countries.
– On the other hand, there may be cases where parties intend to use the conciliation process in conjunction with the arbitration or a mixed alternative dispute resolution. In this Convention, there are restrictions on interpretation contained in Article 1 (1), in which the term commercial disputes are not clearly defined; therefore, interpretation problems may arise, and Article 1 (3) states that the Convention shall not apply to cases where a compromise agreement is approved by a court or made during a court hearing (prior to the court’s ruling) and a compromise agreement enforced as a court ruling or a compromise agreement that is made and enforced as an arbitral award.
– Effects on Arbitration: It may be more likely to apply for conciliation to resolve international commercial disputes instead of arbitration, or there may be more conciliation during the arbitration process.
Examples of disputes indicating that conciliation may be conducted before or during the arbitration process
(1) Cases between the Republic of South Korea and the United States
The content of the dispute is based on the laws of the Republic of Korea for a trial, and the arbitration proceedings are held in Tokyo and shall be conducted by the ICC. During the arbitration proceedings, disputing parties agree to settle the dispute under the regulations of the Singapore Mediation Center in Tokyo, Japan, which initially results in failure to settle the dispute, but four to five months late, the parties were able to compromise and finally agree to a settlement without the arbitration process.
(2) Maritime dispute between the Republic of South Korea and the United States
The content of the dispute is based on the laws of England for a trial, and the arbitration proceedings are held in London, England, and shall be conducted by the LCIA, in which the case initiates with the arbitration proceedings, and evidence has been submitted to an arbitral tribunal for the second tie. Parties then made an attempt to settle the dispute and are able to agree to a settlement. Therefore, the arbitration proceedings are terminated.
(3) Recognition and enforcement of court rulings, arbitration awards, and settlement agreements made in foreign countries are related conventions as follows:
(1) Recognition and enforcement of foreign judgments: The Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matter establishes measures for recognition and enforcement of court judgments made in one of the other jurisdictions, which shall apply only to cases of courts of the Member States, which currently comprise 83 signatory countries of the Convention.
(2) Recognition and enforcement of a foreign arbitral award: Convention on the Recognition and Enforcement of Foreign Arbitral Award or the New York Convention. According to information in Currently, there are 163 signatory countries. The Convention is established to create international standards for arbitral awards in one country to be recognized and enforced by parties in another country.
(3) Recognition and enforcement of an international dispute resolution agreement: United Nations Convention on International Settlement Agreement resulting from mediation or the Singapore Convention.
(4) Background of the Singapore Convention
The United Nations established a commission, UNCITRAL WGII, to conduct studies, and billed the Singapore Convention between 2014-2018 and opened for the signing on August 7, 2019, in Singapore.
Whereas an effect of the Singapore Convention on cross-border or international commercial disputes includes determination of an efficient, effective and simple framework for the enforcement of commercial dispute resolution agreements, it is a process to elevate conciliation to be an alternative dispute resolution for international commercial disputes; to raise awareness of values of international commercial dispute conciliation, suitability for different countries despite different legal, social and economic systems; and to maintain economic relations between trade partners’ countries with a fair process and consideration of trade and investment.
On August 7, 2019, where the official signing ceremony of the New York Convention was held, there were a total of 46 signatory states, with five additional states at a later date.
In addition, the speakers noted that in Singapore Convention, the ASEAN countries were significantly involved from the process of drafting the provisions of the Convention, and it was a convention that is quite suitable for the Belt and Roads countries.