THAILAND Trends and Developments Contributed by: Pisut Attakamol, Wasin Lertwalaipong, Pumma Doungrutana and Kosit Prasitveroj, Baker McKenzie
the legal system or offends basic notions of fairness and justice. Examples cited by the Supreme Administrative Court included an arbitral award requiring the delivery of nar - cotic drugs or enforcing obligations procured through corruption. The Supreme Administrative Court also considered previous resolutions of the Supreme Administrative Court’s General Assembly issued in 2018, which had supported a broader scope of judicial review. However, the Supreme Administrative Court clarified that those resolutions do not constitute bind - ing legal guidance and therefore do not govern the interpretation of Section 40 paragraph 3 (2)(b) of the AA. Applying these principles, the Supreme Administra - tive Court held that the state entity’s arguments con - cerned only the interpretation of the sub-carrier lease contract and the parties’ respective rights and obliga - tions. These were purely contractual issues and did not involve public order. Accordingly, the Supreme Administrative Court concluded that the Central Administrative Court had erred in setting aside the arbitral award on the public order violation ground under Section 40 paragraph 3 (2)(b) of the AA. Areas of Continuing Uncertainty The test adopted in Supreme Administrative Court Decision No Or 73/2566 (2023) is relatively narrow. Indeed, the Supreme Administrative Court’s reasoning resembles approaches adopted in other jurisdictions such as Singapore. While the Administrative Court has generally fol - lowed this approach since 2023, a review of recently published decisions suggests that some uncertainty remains. In certain cases, the Administrative Court has continued to adopt a broader interpretation of public order under Section 40 paragraph 3 (2)(b) of the AA. In Central Administrative Court Decision No 2006/2567 (2024), a state entity engaged a private contractor to construct a reinforced-concrete elevated roadway. The contractor subsequently fell into delay, prompt - ing the state entity to impose daily liquidated damages (DLD). Approximately one year later, the state entity terminated the contract. In the ensuing arbitration,
the arbitral tribunal held that the state entity’s pro - longed inaction and silence caused time to become at large. Consequently, the state entity was not entitled to impose the DLD or terminate the contract on the basis of delay. The arbitral tribunal ordered the state entity to pay the outstanding construction price to the contractor. The state entity subsequently applied to set aside the arbitral award. The Central Administrative Court held that the DLD provisions served as an important mech - anism through which the state entity could sanction contractors whose conduct jeopardised the timely delivery of public services. On that basis, the Central Administrative Court considered the issues relating to the DLD and contract termination to be matters of public order under Section 40 paragraph 3 (2)(b) of the AA. The Central Administrative Court ultimately set aside the arbitral award after concluding that the arbi - tral tribunal had erred in finding that time had become at large. In Central Administrative Court Decision No 2038/2568 (2025), the dispute arose under a power purchase agreement (PPA). A private party failed to achieve the commercial operation date on time. In 2007, the state entity terminated the PPA and called on the rel - evant bank guarantee (BG). After several unsuccessful attempts to pursue its claims, the private party com - menced arbitration in 2017 seeking damages for the allegedly unlawful enforcement of the BG. The arbitral tribunal held that, although the claim had been com - menced outside the five-year limitation period under Section 51 of the ACPA, there was a necessary cause for admitting the claim pursuant to Section 52 of the ACPA. The arbitral tribunal ultimately awarded dam - ages in favour of the private party. The state entity subsequently applied to set aside the arbitral award. The Central Administrative Court held that the claim was time-barred under Section 51 of the ACPA and that no necessary cause existed under Section 52 of the ACPA to justify admitting the claim. On that basis, the Central Administrative Court set aside the arbitral award on the public order violation ground under Section 40 paragraph 3 (2)(b) of the AA. The decision confirms that issues relating to limitation periods under Section 51 of the ACPA, as well as the
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