THAILAND Law and Practice Contributed by: John Frangos, Nuanchun Somboonvinij, Santhapat Periera and Niti Muangkote, Tilleke & Gibbins
Thai law does not recognise the concept of a fleet lien. A third party can only have the right of retention over an asset that they possess. 3.3.2 Timeframe to Discharge a Lien or Mortgage The right of retention permits the lawful possessor of a property to retain the whole of the property until the debt or obligation in relation to the property pos - sessed is fully paid or performed. Thai law does not provide for the mortgaging of aircraft at present and so registration or perfection of a mortgage over an aircraft under Thai law may therefore not currently be achievable or practicable. 3.3.3 Register of Mortgages and Charges Thai law does not currently provide for the mortgaging of aircraft and accordingly, registration or perfection of a mortgage over an aircraft under Thai law may not currently be achievable or practicable. Subject to complying with the applicable laws, a security interest over an aircraft under, and according to, the Business Security Act BE 2558 could probably be created and recognised. 3.3.4 Statutory Rights of Detention or Non- Consensual Preferential Liens See 3.3.1 Third-Party Liens . 3.3.5 Verification of an Aircraft’s Freedom From Encumbrances An aircraft cannot be mortgaged or pledged under Thai law at present. However, an aircraft can be regis - tered as a business security under the Business Secu - rity Act BE 2558. In this event, a purchaser can verify the business security with the Department of Business Development. 3.4 Enforcement 3.4.1 Differences Between Enforcing Security Assignments, Loans and Guarantees The concept of security assignment is not recognised under Thai law. However, assignment of an account receivable in project finance may be considered a novation and applicable under Thai law, if a written assignment agreement is made between an assignor and assignee with consent from, or notification, to a debtor.
Enforcement can only be made through a court. How - ever, unlike enforcing a loan, the right to enforce a guarantee is subject to particular requirements under the CCC, such as: • the timing of the demand notice; • the duration of the debt; • the maximum amount secured; and • so on. In order for the guarantee agreement to be enforce - able, it must also be made in writing and be signed by the guarantor. Particular specific incidents may result in a guarantee being discharged, such as the creditor granting the debtor an extension of time for payment. 3.4.2 Security Trustees’ Enforcement of Their Rights As the concept of a security trustee is not recognised under Thai law, enforcement of the rights under the security assignment requires litigation in the Thai courts. 3.4.3 Application of Foreign Laws Whenever the governing law is foreign law, the foreign law can apply in so far as it is not contrary to public order in Thailand or public policy. If the Thai court establishes that foreign law applies, the party rely - ing on the foreign law has to prove the foreign law is applicable to the satisfaction of the Thai court. If they do not, Thai law will apply. There has been no instance of the Thai court dismiss - ing a case based on a choice of forum clause desig - nating a foreign court. Indeed, case precedents show that the Thai court has discretion to exercise jurisdic - tion contrary to the clause when the Thai court has jurisdiction over the dispute. 3.4.4 Recognition and Enforcement of Foreign Judgments and Arbitral Awards Thailand is not a party to any conventions on enforc - ing foreign judgments. Thai courts do not enforce for - eign judgments but will accept foreign judgments as evidence in a new trial. Even if the foreign judgment is based on the merits, the claimant must present all the key witnesses and testimony in the new trial before the Thai court.
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