THAILAND Trends and Developments Contributed by: Pisut Attakamol, Wasin Lertwalaipong, Pumma Doungrutana and Kosit Prasitveroj, Baker McKenzie
These examples illustrate the tension between party autonomy and consumer protection in B2C arbitra - tion. In recent years, courts in many jurisdictions have increasingly ruled in favour of consumers, declaring arbitration clauses unenforceable on various legal grounds, varying from jurisdiction to jurisdiction. This judicial trend prompted many business operators to reconsider or revise the arbitration clauses in their terms of use. Thai law perspective The main arbitration legislation in Thailand is the Arbi - tration Act BE 2545 (2002) (AA), which is based on both the United Nations Convention on the Recogni - tion and Enforcement of Foreign Arbitral Awards 1958 (NYC) and the UNCITRAL Model Law on International Commercial Arbitration 1985 (UNCITRAL). Like other NYC and UNCITRAL jurisdictions, the AA does not specifically address whether an arbitration agreement in a B2C contract is enforceable, or to what extent. That said, Thailand has enacted several laws aimed at consumer protection. For the purpose of this chapter, two key statutes are highlighted. • The Unfair Contract Terms Act BE 2540 (1997) (UCTA) provides that a contract term in a B2C contract that imposes an unreasonably onerous burden on one party constitutes an unfair contract. Such a term is enforceable only to the extent that it is fair and reasonable in the circumstances. • The Consumer Case Procedure Act BE 2551 (2008) (CCPA) governs how B2C cases are to be con - ducted in court. The CCPA establishes a proce - dural framework that is particularly favourable to consumers. This raises the question: can an arbitration agree - ment in a B2C contract be considered an unfair contract term and thus unenforceable under the UCTA? Recently, the Supreme Court of Thailand (SC) answered yes. The SC addressed this issue for the first time in Deci - sion No 4183/2565 (2022) and Decision No 4184/2565 (2022). The facts in both cases are similar, and they are discussed together for ease of reference.
Decision No 4183/2565 (2022) and Decision No 4184/2565 (2022) A consumer (Mr A) filed a claim in court against a business operator (Company B), alleging breach of a condominium sale and purchase contract (the “sale contract”). The sale contract contained an arbitration clause stat - ing: “Parties agree that, if any dispute between them arises out of or in connection with this contract and cannot be resolved amicably, such dispute shall be resolved by arbitration under the Thai Arbitration Institute, Office of the Judiciary (‘TAI Rules’).” Accordingly, Company B sought to compel arbitration by requesting the court to dismiss Mr A’s claim under Section 14 paragraph 1 of the AA. Under Section 14 paragraph 1 of the AA, the court must be satisfied that the arbitration agreement is enforceable before referring the matter to arbitration. The provision reads: “In the case where an action in a matter which is the subject of an arbitration agreement is brought to the Court by one party without referring to the arbitral tri - bunal in accordance with an arbitration agreement, the others may submit, within the date for filing his or her statement or the period for filing his or her state - ment as prescribed by law, his or her request to dis - pose of the case and refer to arbitration to the com - petent Court. The Court shall, after making inquiries, dispose of the case, unless it appears that the arbi - tration agreement is void, inoperative, or incapable of being performed.” The lower courts reached different conclusions, prompting an appeal to the SC. The SC ultimately held that the arbitration clause in the sale contract was unenforceable. The SC began by emphasising the policy behind the CCPA: to ensure that consumer cases are adjudicat - ed efficiently, expeditiously and fairly. The SC noted that under the CCPA, the court plays an active role in proceedings, such as rectifying procedural irregulari -
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