Thailand

Case updates

Chevron Arbitration

In 2020, Chevron resumed its USD2 Billion arbitration claim against Thailand in relation to a retroactive 2016 Thai law which requires gas field operators to pay for costs of decommissioning installed assets. The Arbitration proceedings were on hold for one year to permit Chevron to negotiate directly with the Energy Ministry.

Kingsgate Consolidated Limited Arbitration

Akara Resources PCL, the operator of a gold mine in Thailand filed a USD1 Billion claim against Thailand earlier this year in relation to a Governmental Order which suspended Akara Resources’ mining operations from 2017 onwards due to health and environmental concerns.

Other key developments

Amendments to Thai – Arbitration Law

Following on from the amendments made to the Arbitration Act in 2019, which amended the Act to become more foreign arbitrator friendly, the Thai Ministry of Labour has issued its Notification of the Ministry of Labor Re: Prescription of Works Prohibited to be Engaged by Aliens (Notification) on 1 April 2020.

The Notification permits foreigners to: (1) act as arbitrators; and (2) assist or act in place of others in relation to arbitration proceedings (i.e. act as defense counsel). This is in line with the recent amendment’s central purpose of promoting Thailand as a top tier dispute resolution destination for South East Asia.

The Ministry of Labour’s Notification is significant because it addresses the ambiguities which plague the practicalities of foreigners acting as arbitrators or counsel in arbitrations in Thailand. Historically, there have been tensions between Thailand’s Arbitration, Labour and Immigration laws which made the validity of foreigners taking on these roles dubious.

Class Action Arbitrations

In 2015, Thailand permitted class action litigation. Following on from this development, in early 2020, Thailand’s Office of the Judiciary passed a 2020 regulation (Regulation of the Office of the Judiciary Governing Arbitration, Arbitration Institute (No. 3) B.E. 2563) which now permits class action arbitrations. 

Each class wishing to commence a class action claim must comprise of at least three individuals who jointly submit their complaint to the Thai Arbitration Institute (TAI). While there are other arbitral institutions in Thailand such as the Thailand Arbitration Centre (THAC), at this time, only the TAI is permitted to handle class action arbitrations. Once a class is formed, it must then appoint a representative to handle the procedure and administration of the case itself.

Classes which have already been formed will not exclude others from joining the class. However, if an individual is unable to join a particular class for whatever reason, it does not mean that the individual may not form their own class and initiate arbitral proceedings against the defendant. Assuming that there are at least three individuals which form that class.

Class action arbitrations in Thailand are unlikely to instantaneously become a popular format of dispute resolution. This is evident from the experience of class action litigation, which, while being introduced six years ago, has not had a widespread uptake.

That said, class action arbitrations provide a whole host of attractive benefits for plaintiffs. For example, plaintiffs who band together will benefit from economies of scale, as all plaintiffs will share a representative as opposed to each individual plaintiff having to pay for their own legal counsel. This will also increase the number of potential plaintiffs as the cost of seeking recourse is no longer out of the hands of most plaintiffs. Furthermore, the formation of a class is likely to add more credibility and weight to allegations made against defendants.

Amendments to Tai and Thac rules

As a direct response to the pandemic and travel restrictions (domestic and international), Thailand’s two main arbitral institutions, the TAI and the THAC introduced rules which permitted virtual hearings and the establishment of online platforms in which alternative dispute resolution could take place.

Our review of these important updates can be read in our Asia Pacific Arbitration Virtual Hearings publication.