THAILAND Law and Practice Contributed by: Jessada Sawatdipong, Sarunporn Chaianant, Supawich Nimmansomboon and Supawin Pongthananikorn, Chandler Mori Hamada
asset; in this case, an out-of-court public auction may be conducted. For enforcement of a pledge, the pledgee may enforce the pledged property by a public auction without court procedures. The foreclosure of secured assets is a viable option; however, it is uncommon in practice due to the requirement that the debtor have outstanding interest payments for at least five years and that the value of the secured asset not exceed the outstanding unpaid debt. If there is an agreement in advance allowing the lender to dispose of secured assets contrary to the foregoing, such as a private execution agreement, the agreement is invalid. Under a BSA, there are also special provisions for the enforcement of deposit claims and security over the whole business. Whenever the security receiver of a deposit claim is a financial institution, the enforcement procedures can be carried out immediately through direct settlement for those deposits, followed by a subsequent notice (without obtaining consent) to the security provider. For the whole business collateral, a third-party security enforcer appointed in advance by the parties will be responsible for enforcing and disposing of the whole business. 6.2 Foreign Law and Jurisdiction The choice of foreign law agreed upon by the parties as the governing law of the loan will be recognised and applied by Thai courts, but only to the extent that such law is proven to the satisfaction of a Thai court (satisfaction is within the discretion of the court) and is not considered contrary to Thailand’s public order or good morals by the court. The scope of a court’s discretion on public order or good morals has not yet been definitively established. A provision that allows the courts of a foreign jurisdic- tion to have exclusive jurisdiction to settle any dispute may not be enforceable in Thailand. However, Thai law is silent on the effect of irrevocable submission to the jurisdiction of a foreign court, waivers concerning objection to venue or the appointment of agents for service of process for the purposes of proceedings before such courts. There is no precedent case under
Thai law ruling such submission, waiver or appoint- ment invalid. An express waiver of sovereign immunity made in writ-
ing may be effective in Thailand. 6.3 Foreign Court Judgments
A judgment of a foreign court will not be enforced by the Thai courts but may, at the sole discretion of the Thai courts, be admissible as evidence in an action in the Thai courts. An award rendered by an arbitral tribunal is recog- nised and enforceable in a Thai court under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Thai Arbitration Act B.E. 2545 (2002). Arbitral awards are enforced by Thai courts upon due application of a party seek- ing to enforce the award. Generally, Thai courts will not re-examine the merits of the dispute since they have already been examined and decided on by the arbitration tribunal. However, a Thai court may refuse to recognise and enforce an arbitral award based on several grounds, as prescribed in Section 40 of the Thai Arbitration Act (eg, if the court views that the arbitral award is contrary to Thai law, public order or good morals). 6.4 A Foreign Lender’s Ability to Enforce Its Rights Due to Thai laws generally prohibiting foreigners from owning title to land, there are very few exceptions where foreign lenders can enforce security over land by foreclosure. However, there are no restrictions that could affect a foreign lender’s ability to enforce its rights under a loan or security agreement.
7. Bankruptcy and Insolvency 7.1 Impact of Insolvency Processes Bankruptcy Proceedings
Under bankruptcy proceedings, upon a receivership order, an unsecured creditor will be prohibited from enforcing any of its rights in respect of claims against an insolvent debtor outside of the insolvency proceed- ings and shall submit an application for repayment in order to be repaid.
630 CHAMBERS.COM
Powered by FlippingBook