Use of international arbitration urged
Thailand has been urged to rely more on international arbitration to solve trade and investment disputes as a means of attracting more foreign direct investment.
A number of studies have linked promotion of the use of international arbitration with high economic growth, Jason Fry, secretary-general of the International Court of Arbitration in Paris, said yesterday.
This is because those countries that promote arbitration attract more foreign direct investment, he said.
Foreign investors prefer international arbitration over local judicial systems. They fear that local courts might be biased toward local interests, while their own interests are not properly taken into account, he said.
Arbitration can facilitate resolutions in disputes stemming from trade, investment and commercial contracts between private firms, between a private firm and government, or between governments, he said.
It is more cost effective and timely than going through the local judicial system, he claimed.
In Asia, Singapore and Hong Kong are preferred as places for holding arbitration due to their accommodative legal frameworks and other infrastructure, he said.
“Due to its geographical advantage of being located in the middle of Asean, Thailand will greatly benefit from the use of arbitration,” he said.
Arbitration itself is a business that could bring many visitors to Thailand and create related business, he said.
There are about four to six disputes in Thailand that go to arbitration each year. Victor Smith, chair of a commission on arbitration based in Thailand, said that Thai authorities have been slow in responding to the use of arbitration.
He said that restrictions on legal professionals make it almost impossible for investors to bring their own lawyers to Thailand when disputes arise. Work permit procedures are also an obstacle.
Contract enforcement by local courts is also time-consuming, taking about three to five years compared to global best practice of one year, he said.
The court may set up a special unit to facilitate the arbitration, he suggested.
Thailand is already a member of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, known as the New York Convention.
