Litigation is a costly, time consuming and stressful method to resolve trade disputes. It should only be considered as a last resort, after other options have been exhausted.
In this case, the Philippines argued that Thailand’s measures had negatively impacted imported cigarettes, and thus breached the CVA and GATT. The DSB ruled in favour of the Philippines.
Negotiation
Negotiation is a popular way to resolve trade disputes in Thailand. It can offer a more amiable result than a court-imposed judgment and can safeguard the relationship between partners that may become strained during a long legal process. Additionally, it can save the parties money as the cost of litigation can be high.
Negotiating with Thais often involves a lengthy process of building relationships, gathering information, and bargaining. Consequently, it is important to set realistic expectations regarding the pace of negotiation. It is also helpful to capture key agreement points in writing after meetings and at key negotiation stages, although some Thais believe that writt en agreements lack the strength of oral commitments.
Thais have a polychronic work style, which means that they are used to working on multiple tasks at once. As a result, they often negotiate by jumping back and forth between different topics. This approach can be frustrating for negotiators from strongly monochronic cultures.
Mediation
The negotiated settlement of trade disputes is often preferable to the lengthy court process, and can also help safeguard the relationship between trading partners that might otherwise turn sour during litigation. However, preparing for mediation requires participants to enter the process with a clear understanding of their own interests and to be open to new ideas for resolution.
Additionally, the mediation process can lead to a mutually-acceptable settlement that is then more likely to be complied with than a court judgment. As a result, mediation can also reduce the number of appeal cases and the associated cost of litigation.
As a member of the WTO, Thailand has established trade remedy laws, including anti-dumping and countervailing duties that can be used to address unfair trade practices. However, these methods can result in reduced exports and disrupt supply chains. As such, the prevailing view among trade experts is that mediation should be the preferred method of dispute resolution over formal legal proceedings.
Arbitration
As a leading global economy, Thailand is deeply involved in international trade. Disputes that arise from this trade can have direct impacts on both the global economy and the domestic economic environment.
One way to resolve these disputes is through arbitration. When drafting contracts in Thailand, parties may stipulate that any dispute will be settled by arbitration. This stipulation can be made even after the occurrence of the dispute, though it is preferable to make this determination at the time of contract drafting.
The disputing parties can choose to have a tribunal consist of one or three arbitrators. If they cannot agree on a number of arbitrators, the Thai arbitration institute will prepare a list of potential arbitrators. The disputing parties can then remove the names of those they do not prefer and decide on the remaining arbitrators.
The arbitration process is often shorter and more cost effective than a trial. Moreover, the awards of arbitration can be enforced in many jurisdictions, including Thailand.
Litigation
In cases where negotiations and mediation have failed, litigation may be the next step. Litigation is a highly complex process and the timeframes for resolution can be very long. For example, in Thailand a lawsuit can take up to a year from the commencement of the action to the final judgment.
The length of the litigation depends on how complicated the case is and the court’s trial docket. A litigant is normally required to submit evidence to support their claim which can be costly in terms of time and resources.
As a result, litigation can be expensive for both parties. The award of lawyers’ fees can also be a substantial sum. However, unlike in the US, where attorneys’ fees are generally fully recoverable, lawyers’ fees in Thailand are only partially recovered. This is due to the fact that Thailand is a signatory to the 1958 New York Convention on the Enforcement of Arbitral Awards. This convention makes foreign judgments enforceable in Thai courts.
