THAILAND Law and Practice Contributed by: Tirayu Songdacha, Nutchaya Khayan, Piyachat Suwanwihok and Lalita Sriboonruang, MSC International Law Office
Alternative Dispute Resolution (ADR) Procedures Thailand does not have a statutory requirement man - dating ADR before commencing court proceedings or arbitration, and there is no legal requirement to medi - ate prior to arbitration. However, Thai law encourages mediation, and government agencies actively pro - mote its adoption to achieve more efficient dispute resolution. International Treaties Regarding Dispute Resolution Thailand is a signatory to the New York Convention (1958), which allows for the recognition and enforce - ment of foreign arbitral awards. Thailand is also party to multiple bilateral investment treaties (BITs), free trade agreements (FTAs), and ASEAN dispute settle - ment mechanisms, many of which provide for arbitra - tion in investor–state disputes. Enforcement of Foreign Judgments or Arbitral Awards Foreign court judgments are not directly enforce - able in Thailand; they may only be introduced as evi - dence in fresh legal proceedings before a Thai court. By contrast, foreign arbitral awards are recognised and enforceable under the New York Convention and the Thai Arbitration Act B.E. 2545 (2002). To enforce an arbitral award, an application must be filed within three years of the award becoming binding, accom - panied by certified copies of the award and arbitra - tion agreement with Thai translations. The applicant must also show that no statutory grounds for refusal exist, such as an invalid arbitration agreement, lack of proper notice, excess of scope, procedural defects, or violation of Thai public policy.
The appointment and removal of directors must com - ply with the CCC unless otherwise provided under sector-specific laws, the AOA, or the JV agreement. Under the CCC, weighted voting rights may be applied by granting the chairperson of the board a casting vote in the event of a tie. However, JV participants are free to agree otherwise by expressly providing dif - ferent voting arrangements in the JV agreement and AOA. 7.2 Duties and Functions of JV Boards and Directors In the case of an IJV, the board of directors has the power and duty to manage the company in accord - ance with its stated objectives, its AOA, and the reso - lutions of the shareholders’ meeting. Where a director also holds a position or owes duties to the JV participant that appointed them, Thai law requires the director to act in the best interests of the company rather than in the interests of the appoint - ing shareholder. In situations of conflict, the director’s fiduciary duty to the company takes precedence, and decisions must be made in good faith, with care and loyalty to the JV entity. Under the CCC, the board may delegate certain func - tions to individual directors or subcommittees. How - ever, court precedents have clarified that attendance at board meetings is a personal duty of each director and cannot be delegated or performed by another person on the director’s behalf. Regarding reporting obligations, under the CCC the board must prepare and present the financial state - ments at the shareholders’ meeting. For UJVs, the duties of the board and the reporting requirements to the participants should be clearly set out in the joint-venture agreement, which is normally modelled on or reflects the principles under the CCC. 7.3 Conflicts of Interest Under the CCC, directors are prohibited from engag - ing in any business of the same nature as, and in com - petition with, the company’s business, unless such
7. The JV Board 7.1 Board Structure
The board structure is typically determined by the JV agreement and the company’s AOA. It is common for each JV participant to have the right to nominate directors in proportion to its shareholding or as oth - erwise agreed between the parties.
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