Monthly Archives: January 2015

Commercial Contract Dispute Resolution in Thailand – THE THAI ARBITRATION INSTITUTE – Part 2: Costs, Fee & Who Pays

The Thai Arbitration Institute (TAI) — currently under the auspices of the Thai government’s judiciary — is the most commonly chosen institutional arbitration service provider by commercial parties to administer their contractual dispute arbitrations seated in Thailand. Unless the parties agree to deviate from the TAI Rules — and somewhat controversially — “with the consent of the Director of the Alternative Dispute Resolution Office”, the TAI Rules will apply to any arbitration proceeding under its administration. Part 2 of this article covers the Costs of the arbitration and the arbitrator’s Fee — and who pays them — in a TAI arbitration.

COSTS

The TAI’s current cost rates are as follows:

Types of Costs

Rate (Thai Baht)

A. Services provided by TAI

1. Refreshment and snacks

100/meal

2. Transcription of testimony (in Thai)

600/hour

3. Transcription of testimony (in English)

2,000/hour

4. Over-time remuneration for officials
4.1 business day after 16.30 hrs.
4.2 holiday with not less than 7 hours of work (not including 1-hour break)

In both cases, 210/hour/person but not exceeding 1,250/person

5. Remuneration for officials for working out- of-office during office hours

300/day/person

6. Arbitrator’s meal

Actual cost

7. Transportation and remuneration for witnesses summoned to testify or expert witnesses

As set by the arbitral tribunal

B. Other equipment used in the arbitral proceedings

8. Equipment for preparing case files – Folder
– Index
– Box file

200/folder 50/set 100/box file

9. Sound recording onto CD or DVD

50/CD or DVD

10. Video recoding onto DVD

200/DVD

11. Delivery of documents (each party is

Actual cost

responsible for its own documents delivery)

12. Other expenses relating to arbitral proceedings for example, transportation, accommodation, etc.

As set by the arbitral tribunal

13. Certified copy of the award and/or any rectifications thereof (excluding photocopy fee)

Certified copy of other case-related documents

100/copy 50/copy

14. Photocopy

2/page

15. Other office supplies (if any)

Actual cost

The parties must each pay an advance for costs and expenses to the TAI. The TAI will normally ask that the payment be made within 30 days from receipt of the payment notification from the TAI. The amount of advance payment may vary as it depends on the TAI’s discretion. The minimum amount is usually Thai Baht 15,000 each.

The Claimant must pay the first installment of its share of the advance Costs payment upon filing of the statement of claim. The first installment amount may vary pursuant to TAI’s discretion, for example:

  • Thai Baht 5,000 if the language of the proceedings is Thai and both parties reside in Thailand;
  • Thai Baht 10,000 if the language of the proceedings is Thai but either one or both parties reside outside Thailand (may be higher depending on the distance between the party’s residing country and Thailand);
  • Thai Baht 10,000 if the language of the proceedings is not Thai but both parties reside in Thailand; and
  • Thai Baht 20,000 if the language of the proceedings is not Thai and either one or both parties reside outside Thailand (may be higher depending on the distance between the party’s residing country and Thailand).

    When the arbitral proceedings end, the TAI will summarize costs and expenses and notify the arbitral tribunal in order to incorporate such in the award. If there is any balance, it will be returned to the relevant parties. If, however, the advance sum is not sufficient to cover all costs and expenses, the parties will be required to pay the shortfalls.

FEE

The current Fee for an arbitrator in a TAI arbitration are calculated as follows:

Disputed Amount (Thai Baht)

Sole arbitrator

No disputed amount

4,000/session

Not exceeding 2,000,000

30,000

2,000,0001 – 5,000,000

30,000 + 0.5% of amount exceeding 2 million

5,000,001 – 10,000,000

45,000 + 0.4% of amount exceeding 5 million

10,000,001 – 20,000,000

65,000 + 0.3% of amount exceeding 10 million

20,000,001 – 50,000,000

95,000 + 0.2% of amount exceeding 20 million

50,000,001 – 100,000,000

155,000 + 0.1% of amount exceeding 50 million

100,000,001 – 200,000,000

205,000 + 0.05% of amount exceeding 100 million

200,000,001 – 500,000,000

255,000 + 0.04% of amount exceeding 200 million

500,000,001 – 1,000,000,000

375,000 + 0.03% of amount exceeding 500 million

1,000,000,001 – 2,000,000,000

525,000 + 0.02% of amount exceeding 1,000 million

Exceeding 2,000,000,000

725,000 + 0.01% of amount exceeding 2,000 million

Disputed Amount (Thai Baht)

More than one arbitrator

No disputed amount

20,000/session

Not exceeding 2,000,000

60,000

2,000,0001 – 5,000,000

60,000 + 1% of amount exceeding 2 million

5,000,001 – 10,000,000

90,000 + 0.8% of amount exceeding 5 million

10,000,001 – 20,000,000

130,000 + 0.6% of amount exceeding 10 million

20,000,001 – 50,000,000

190,000 + 0.4% of amount exceeding 20 million

50,000,001 – 100,000,000

310,000 + 0.2% of amount exceeding 50 million

100,000,001 – 200,000,000

410,000 + 0.1% of amount exceeding 100 million

200,000,001 – 500,000,000

510,000 + 0.08% of amount exceeding 200 million

500,000,001 – 1,000,000,000

750,000 + 0.06% of amount exceeding 500 million

1,000,000,001 – 2,000,000,000

1,050,000 + 0.04% of amount exceeding 1,000 million

Exceeding 2,000,000,000

1,450,000 + 0.02% of amount exceeding 2,000 million

Although the arbitrator’s fee is set, the TAI may adjust the amount at its discretion. One of the reasons for an adjustment might be that the disputed amount in the statement of claim is considerably different than that in the counterclaim. The TAI may then have each party pay the arbitrator’s fee based on each party’s claim. The TAI may also increase a previously determined fee amount if the proceedings end up being more complicated or time consuming or both, than previously anticipated.

WHO PAYS THE COSTS AND FEE

Both the Arbitration Act of Thailand (the “Act”) and the TAI Rules provide that the arbitrator is to determine what part of the Costs and Fee the parties must pay. However, it should be noted, that it is not clear whether the Act or the TAI Rules include any expenses, which are not billed by the TAI, among the Costs. Further, both the Act and the TAI Rules explicitly exclude attorney’s fees from the Costs. Thus, if the parties wish to have such costs awarded, it is highly advisable for the parties to explicitly agree to this prior to the beginning of any arbitration under the TAI and to further seek explicit recognition of such agreement from the arbitrator once the arbitration has begun.

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DUENSING KIPPEN is an international law firm specializing in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in 45 other countries. Visit them at: duensingkippen.com

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Commercial Contract Dispute Resolution in Thailand – THE THAI ARBITRATION INSTITUTE – Part 1: Procedure & Timing

The Thai Arbitration Institute (TAI) — currently under the auspices of the Thai government’s judiciary — is the most commonly chosen institutional arbitration service provider by commercial parties to administer their contractual dispute arbitrations seated in Thailand. Unless the parties agree to deviate from the TAI Rules — and somewhat controversially — “with the consent of the Director of the Alternative Dispute Resolution Office”, the TAI Rules will apply to any arbitration proceeding under its administration. In Part 1 of this article we summarize the procedure and timing of a TAI arbitration.

PROCEDURE

(1) The first step is for the claimant to file a “statement of claim” against the “respondent” together with a payment of preliminary advance on costs to the TAI.

(2) The TAI will then send the statement of claim to the respondent.

(3) The respondent may then file a statement of defense (and a counterclaim, if any) to the TAI within fifteen days of receipt of the statement of claim.

(4) The TAI will then send the statement of defense (and the counterclaim, if any) to the claimant.

(5) The claimant may file a defense to the counterclaim to the TAI within fifteen days of receipt of the counterclaim.

(6) Then the TAI will encourage the parties to settle the dispute amicably and offer an opportunity for the parties to meet to discuss such settlement, failing which the parties will be asked to agree on the place of arbitration, language used, and choice of law — if they have not previously done so.

(7) The parties will then nominate their arbitrator(s). The standard TAI Rules require that the arbitral tribunal be composed of either one or three arbitrators. If it the parties choose:

(A) a sole arbitrator: then if the parties cannot agree on the sole arbitrator, each party nominates three names to the TAI. If none of the nominated names are the same, the TAI may list three more names and dispatch all nine names to the parties to arrange in order of preference and send back to the TAI. The TAI contacts the most preferred person agreed by the parties to be the arbitrator

(B) three arbitrators: then each party nominates one arbitrator. The two arbitrators choose the third arbitrator who will act as the chairman of the arbitral tribunal.

Note: if the parties have not chosen the number of arbitrators, the Act dictates that the tribunal shall be composed of a sole arbitrator.

(8) The TAI will then coordinate with the parities to arrange a meeting to: formally appoint the arbitrator(s); settle of issues to be decided; determine procedural and evidentiary issues; and schedule the proceedings.

(9) The parties will then, in accordance with the proceedings schedule, submit any relevant documents in support of their claim or defense — usually within one to three months of the scheduling meeting.

(10) This will be followed by a formal hearing of evidence, if any — usually within four to six months of the scheduling meeting.

(11) The TAI Rules prescribes that the arbitral tribunal must issue the award within 180 days from the day on which the last arbitrator was appointed. However, it should be carefully noted that in practice the TAI usually presents a minutes of meeting template, which includes a waiver of this deadline and grants an open-ended award issuance period to the arbitrator — this is not required and the parties should not agree to it unless they wish to.

(12) Once the award is completed, the TAI sends a copy of the award to each party.

(13) If a party fails to comply with the award, the other party may petition a competent Thai court to enforce the award within three years from the day that the award is enforceable. Alternatively, if the arbitration was not in compliance with the Act, either party may request that court to vacate the award within three months.

TIMING

It generally takes nine to twenty-four months from filing of the statement of claim to issue of the final award. However, if the case is complicated or, if the respondent is dilatory, the arbitral proceedings may take longer to complete.

The enforcement of the arbitration award within Thailand, if necessary, may require anywhere from a few months to several years. It is hoped that the reasons for such enforcement delay will be addressed soon. However, it should be noted that Thailand is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1959), which means that any international arbitration award administrated by the TAI in Thailand, is enforceable in any of the more than one hundred fifty countries that have also signed the Convention.

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DUENSING KIPPEN is an international law firm specializing in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in 45 other countries. Visit them at: duensingkippen.com

 

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