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Economics

Thailand needs better arbitration

Enforcement can take three to five years
8/06/2012 
Dennis O'Reilly & Soonya Vanichkorn

To facilitate greater foreign investment, Thailand needs to develop its arbitration process and reduce barriers to arbitration to allow for flexible and faster dispute settlement, says the International Chamber of Commerce (ICC), a global business organisation.

Arbitration is a private dispute resolution process conducted outside domestic court systems.

Proponents argue it allows investors to better manage risk by assuring them that in the event of a dispute their contracts will be respected.

The International Court of Arbitration, an arm of the ICC, is an institution that settles disputes among international and domestic businesses.

Jason Fry, secretary general of ICC's Court of Arbitration, said there are several barriers in Thailand that make it more difficult for international investors to settle commercial disputes with Thai businesses.

He said the lack of work permits for foreign lawyers makes it very difficult for foreign firms to bring their own legal representation to act in a case.

The lack of work permits for foreign lawyers increases costs for companies. They have to hire Thai counsel and learn the Thai legal system, he said.

"It's a bit like football and everyone wants to play on their home ground. Arbitration is really that neutral ground," said Victor Smith, chairman of the commission on arbitration for ICC Thailand.

Mr Smith said it would be a step forward if the government addresses this issue, particularly with the Asean Economic Community set for 2015.

Granting short-term work permits or business visas for foreign lawyers is an option, he said.

Mr Fry said another barrier is that arbitration awards are very slow to be enforced in the country.

"Despite the fact that arbitration processes tends to be quicker than normal litigation through courts, the actual enforcement of judgements is very slow," he said.

It generally takes a year to enforce arbitration awards, but in Thailand the process can take 3-5 years.

This lengthy process translates into higher premiums in contracts, which is inefficient.

Mr Smith said to enhance the culture of arbitration, there needs to be support from the judiciary, but the process in Thailand appears to be slow in comparison with other jurisdictions.

This is despite the fact that Thailand was one of the first countries to sign the New York Convention that promotes the use of arbitration awards.

He said it would be useful if the Thai judiciary established a section that would deal with arbitration on its own.

Four to six arbitration cases take place each year in Thailand, most of which involve disputes between non-governmental parties.

Countries that wish to encourage foreign direct investment have a culture that favours international arbitration," said Mr Fry, adding that Brazil has been trying to enhance arbitration practices by changing domestic judicial structures.

Thailand has a geographical advantage and could become a hub for arbitration, he said.

Arbitration in Thailand would reduce the cost of conducting business, increase economic activity, and allow for the settling of commercial disputes without having to go through the burdened court system.

Places like Hong Kong and Singapore, Asian jurisdictions with well-developed arbitration legislation, benefit greatly, as it is a more efficient, cost-effective process, said Mr Fry.

"Countries that encourage arbitration in terms of settling disputes have a higher GDP," he argued.

(Source: Bangkok Post, Economics, Thailand needs better arbitration, Enforcement can take three to five years, 8/06/2012, Dennis O'Reilly & Soonya Vanichkorn, link) 

Arbitration Vocabulary

arbitration - the judging and settling of a dispute or disagreement outside of the court system by a neutral party (not involved in dispute), quicker and for lower cost (See Wikipedia)

Thailand needs better arbitration

International Chamber of Commerce (ICC) - a very large business networking organization including "hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise," the organization monitors national and regional business priorities, experts then craft an ICC stance on specific business issues, "the UN, the World Trade Organization, and many other intergovernmental bodies, both international and regional, are kept in touch with the views of international business through ICC" (See Wikipedia and website)

International Court of Arbitration - the part of the ICC that does arbitration (See Wikipedia and website)

enforcement (noun) - making sure a law or ruling is obeyed and punishing people if it is not obeyed  การบังคับใช้กฎหมาย

enforcement can take three to five years

facilitate - help, make it easier for project to achieve goals ทำให้ง่าย to make it possible or easier for something to happen ทำให้สะดวกขึ้น

investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
foreign investment

process - a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ
arbitration process

barrier - anything that prevents people from doing something or understanding each other อุปสรรค
reduce barriers

reduce barriers to arbitration

flexible

dispute - a fight, conflict; argument; a serious disagreement การโต้เถียง, ความขัดแย้งข้อพิพาท ข้อพิพาท

settle (verb) - to reach a decision or an agreement about something, or to end a disagreement แก้ปัญหา
settle dispute

settlement (noun) - the process of negotiating to reach an agreement; 2. the agreement made after negotiating and arbitration
dispute settlement

negotiation - formal discussions between two sides who disagree in order to reach an agreement (See Wikipedia)

commercial - for business purposes
settle commercial disputes

private dispute - a dispute involving only people and companies (not the government or criminal issues)
resolution - solving a problem
private dispute resolution

global - throughout the world ทั่วโลก
global business organization

conducted - do some activity (go through the steps involved in doing some activity)

domestic - within the country  ภายในประเทศ
domestic court systems

To facilitate greater foreign investment, Thailand needs to develop its arbitration process and reduce barriers to arbitration to allow for flexible and faster dispute settlement, says the International Chamber of Commerce (ICC), a global business organisation. Arbitration is a private dispute resolution process conducted outside domestic court systems.

proponent - someone who publicly supports an idea, policy or plan

risk - danger, how likely or possible it is for a bad event that causes harm and damage ความเสี่ยง
better manage risk

assuring - making sure or making certain that something exists or happens

contract - a formal agreement either in writing or spoken words (oral contract) (See Wikipedia)
respect contract - do what you promised to do in the contract
contracts will be respected

Proponents argue it allows investors to better manage risk by assuring them that in the event of a dispute their contracts will be respected.

arm - part of a large company or organization หน่วยงาน ส่วนหนึ่งของ
an arm of the ICC

institution - a large organization 
an institution that settles disputes

international - ระหว่างประเทศ between countries
international businesses

The International Court of Arbitration, an arm of the ICC, is an institution that settles disputes among international and domestic businesses. Jason Fry, secretary general of ICC's Court of Arbitration, said there are several barriers in Thailand that make it more difficult for international investors to settle commercial disputes with Thai businesses.

permit - a document that gives someone permission to do some activity
work permit - the document that gives a foreign worker official government permission to work inside the country

lack - does not have ขาดแคลน
lack of work permits

legal representation - a lawyer to help you in a legal case
legal counsel - a lawyer
Thai counsel

neutral - not on either side of a disagreement, in the middle
neutral ground

commission - a group of people who have been formally chosen to discover information about a problem or examine the reasons why the problem exists คณะกรรมการ, คณะกรรมาธิการ

He said the lack of work permits for foreign lawyers makes it very difficult for foreign firms to bring their own legal representation to act in a case. The lack of work permits for foreign lawyers increases costs for companies. They have to hire Thai counsel and learn the Thai legal system, he said. "It's a bit like football and everyone wants to play on their home ground. Arbitration is really that neutral ground," said Victor Smith, chairman of the commission on arbitration for ICC Thailand.

step forward - make progress, improve the situation

issue - a problem that needs to be considered; a subject that people discuss or argue about ประเด็น
address issue

grant - give  
grant permit - give a document that gives permission to do something

option - a choice; something that you can choose in a particular situation ทางเลือก ตัวเลือก
business visas are an option

Mr Smith said it would be a step forward if the government addresses this issue, particularly with the Asean Economic Community set for 2015. Granting short-term work permits or business visas for foreign lawyers is an option, he said.  Mr Fry said another barrier is that arbitration awards are very slow to be enforced in the country.

litigation - the use of the legal system to settle a disagreement การฟ้องร้อง ดำเนินคดี
judgement - the amount of money that a law court says one side has to pay the other side for damage done (See Wikipedia)

actual - real; existing in fact จริง

enforcement (noun) - making sure a law or ruling is obeyed and punishing people if it is not obeyed  การบังคับใช้กฎหมาย
enforcement of judgements

arbitration award - the result of arbitration which can be one side giving money to the other side to pay for damage done or no money changing hands because no damage was done (See Wikipedia)

enforce (verb)
enforce arbitration awards

higher premiums on contracts - meaning: Thai companies on average have to pay more in the contracts they enter into with foreign companies

translates into - leads to, has the effect of, causes
translates into higher premiums on contracts

inefficient - not efficient (could produce more from the resources it has)

"Despite the fact that arbitration processes tends to be quicker than normal litigation through courts, the actual enforcement of judgements is very slow," he said. It generally takes a year to enforce arbitration awards, but in Thailand the process can take 3-5 years. This lengthy process translates into higher premiums in contracts, which is inefficient.

culture - all the activities, people and practices involved in arbitration is a certain place
culture of arbitration

enhance - to improve the quality, amount or strength of something ทำให้ดีเพิ่มขึ้น  ปรับปรุง
enhance the culture of arbitration

judiciary - the part of a country's government which is responsible for its legal system and which consists of all the judges in the country's courts of law คณะตุลาการ, คณะผู้พิพากษา
the Thai judiciary

support - help
support from the judiciary

jurisdiction - the area in which a legal system operates, in which certain courts have the power to make legal decisions (See Wikipedia)
 
convention - agreement

New York Convention - the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, "requires courts of contracting states to give effect to private agreements to arbitrate and to recognize and enforce arbitration awards made in other contracting states. Widely considered the foundational instrument for international arbitration, it applies to arbitrations which are not considered as domestic awards in the state where recognition and enforcement is sought. Though other international conventions apply to the cross-border enforcement of arbitration awards, the New York Convention is by far the most important" (See Wikipedia)

established - created

Mr Smith said to enhance the culture of arbitration, there needs to be support from the judiciary, but the process in Thailand appears to be slow in comparison with other jurisdictions. This is despite the fact that Thailand was one of the first countries to sign the New York Convention that promotes the use of arbitration awards.  He said it would be useful if the Thai judiciary established a section that would deal with arbitration on its own.

parties - people or companies entering into a business arrangement or deal
non-governmental parties - organizations or people involved in a business deal or legal case who are not part of the government

foreign direct investment (FDI) - "direct investment into production in a country by a company located in another country, either by buying a company in the country or by expanding operations of an existing business in the country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages in the country, special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds" (See Wikipedia)

encourage - cause someone to gain enthusiasm, motivation, and energy in what they are doing; make something more likely to happen  ปลุกใจ
encourage foreign direct investment

practices - ways of doing commonly repeated tasks
arbitration practices

changing domestic judicial structures

advantage - a condition giving a greater chance of success ความได้เปรียบ
geographical advantage - being located in a place that gives you a better chance of success

hub - the central or main part of something where there is most activity จุดศูนย์กลาง
hub for arbitration

Four to six arbitration cases take place each year in Thailand, most of which involve disputes between non-governmental parties. Countries that wish to encourage foreign direct investment have a culture that favours international arbitration," said Mr Fry, adding that Brazil has been trying to enhance arbitration practices by changing domestic judicial structures. Thailand has a geographical advantage and could become a hub for arbitration, he said.

burden - a difficult thing you must do; a difficult responsibility
burdened court system

legislation - a law or set of laws suggested by a government and made official by a parliament กฎหมาย, การออกกฎหมาย
well-developed arbitration legislation

benefit - to get help or an advantage from something ผลประโยชน์
benefit greatly

efficient - producing a lot using few resources; doing a task with no waste of time, money or energy
effective - works well, gets the job done; producing the result that was intended ได้ผลดี

a more efficient, cost-effective process

Arbitration in Thailand would reduce the cost of conducting business, increase economic activity, and allow for the settling of commercial disputes without having to go through the burdened court system. Places like Hong Kong and Singapore, Asian jurisdictions with well-developed arbitration legislation, benefit greatly, as it is a more efficient, cost-effective process, said Mr Fry. "Countries that encourage arbitration in terms of settling disputes have a higher GDP," he argued.