Tag: Litigation

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Incompletion of Asset Seizures for Conducting Land Appropriations

When the judgement debtor fails to comply with the whole or part of the court judgment/order pronounced against them, the Civil Procedure Code allows the judgment creditor to apply for execution procedure by filing for a writ of execution with the court. This enables the creditor to get repayment. So, the Legal Execution Department plays a crucial role in dealing with the judgment debtor’s assets during this procedure. However, there are some issues in practice during the legal execution proceeding that we would like to address in this article as follows:

1.Is it necessary to seize any buildings or structures on the land if the land’s value alone covers the debt owed?

In general, when the execution officer operates with the execution proceeding, the execution officer will consider the seizure proceeding under the Civil Procedure Code. This section determines the principle that the property of the judgement debtor shall not be seized or attached in excess of what is sufficient to secure performance to the judgement creditor. In other words, the seizure of property shall not exceed the debt value. However, there is an exception that the seizing property exceeds the debt if the property cannot be separated according to the nature of such property and there is no other judgment debtor’s assets.

In practice, if legal execution involves with seizing land and the land’s value covers the repayment of the debt to the judgment creditor. The execution officer is required to seize the entire property including land, buildings, and all immobility assets attached to it. This is to prevent future disputes over the buildings’ ownership or demolition costs if only the land was initially seized. However, the above-mentioned proceeding is not specified in the law, but it is standard practice to avoid potential future issues that may be occurred during the public auction process.

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2. If the Land Seizure is incomplete what is the next step for the judgement creditor?

When the seizure of property is occurring due to the reasons that the judgement debtor fails to comply with the whole or part of the court judgment/order pronounced against them, or the initial seizure of property did not include all buildings or structures on the land, the judgement creditor obliges to take further action. In such cases, the judgement creditor needs to file an entirely new execution petition to seize the remaining assets attached to the land. This new petition will be combined with the original case file. After the new petition is added to the original case file, the relevant execution officer will conduct the full seizure process of assets, including all previously missed assets. When the execution process is completed, the relevant authority will then move forward to the property appraisal process.

Subsequently, the next step involves the property appraisal process, which is regulated by the Regulations of the Ministry of Justice regarding Property Appraisal, B.E. 2557 (2014). This section defines the authority and criteria for conducting the appraisal as follows:

  • If the total value of the seized property does not exceed 10 million baht, the official receiver or legal execution officer has the authority to conduct the appraisal of value of property themselves.
  • If the property value exceeds 10 million baht but does not exceed 50 million baht, the appraisal of value of property must be carried out by an appraisal officer appointed by the Director-General of the Legal Execution Department.
  • If the property value exceeds 50 million baht, the appraisal of value of property must be conducted by the appraisal committee appointed by the Director-General of the Legal Execution Department.

3. The next steps once the property is apprised?

Once the relevant authority has conducted the appraisal of value of all properties and determined the value, the seizure property will be entered into the public auction under the Civil Procedure Code.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thai Supreme Court Provides Guidance on Grounds for Courts to Annul Arbitral Awards

The Thai Supreme Court, Decision No. 7150/2561, has issued an important decision clarifying the scope of arbitral authority in construction contract disputes. The case involved a contractor’s challenges to an arbitration award over incomplete work and claims for additional compensation on a large development project.

The key facts are that in August 2011, the contractor entered into a 500 million baht subcontract to construct and install a decorative water fountain feature and landscape lighting for the convention center project. As work progressed, the contractor alleged there were oral agreements to perform substantial additional work upgrading the golf course facilities.

However, in March 2013 before this additional golf work was fully rendered, the project owner terminated the subcontract citing deficiencies in the contractor’s original fountain and lighting work scope. The parties then proceeded to arbitration as required under their contract’s dispute resolution clause.

The arbitration tribunal issued an award holding the contractor liable for 588,113.82 baht in damages, representing costs the owner incurred to remedy deficient work after termination. The tribunal rejected the contractor’s claim for separate compensation for the additional golf course work, finding there was no written agreement as contractually required to expand the work scope.

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On appeal, the Supreme Court made the following key rulings:

The arbitrators properly exercised their jurisdiction over disputes concerning the admitted water fountain and lighting work scope under the subcontract’s broad arbitration clause. However, the tribunal exceeded its authority by deciding the contractor’s claim for the additional golf course work, which required a separate written agreement to incorporate it into the arbitrable subcontract per legal requirements. This portion of the award was annulled as violating Thai arbitration law’s public policy grounds.

The intellectual property rights claim over the fountain’s logo design was correctly rejected as already compensated under the design services fees in the original subcontract pricing. The fact that the contract was terminated did not void the arbitration clause, permitting the tribunal to award damages relating to deficient completed work despite the termination.

The Supreme Court therefore upheld the core findings while annulling the award only as to the unincorporated additional golf work claim.

Key Takeaway:

This Supreme Court decision provides useful guidance on grounds for Thai courts to annul arbitral awards and the need for arbitral tribunals to carefully examine whether alleged additional work was properly incorporated in writing into the underlying arbitration agreement’s scope. Arbitrators exceed their jurisdiction by deciding claims over work that was not validly added to the contracted scope through proper documentation, which can result in awards being annulled on public policy grounds under Thai arbitration law. Clear documentation of any change orders authorizing extra work is crucial for the arbitrability of claims seeking compensation for that additional scope.

Author: Panisa Suwanmatajarn, Managing Partner.

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Employment Termination: Navigating Confidentiality Breaches and Fair Practices

The Supreme Court, Decision No. 7189/2562, ruling in a high-profile labor case has shed a spotlight on the intricate interplay between employee confidentiality obligations and fair employment termination practices. The case involved an offshore petroleum company that terminated the employment of a training instructor after allegations of disclosing confidential company information. This decision offers valuable insights and lessons for both employers and employees alike.

Confidentiality Obligations: A Sacrosanct Duty

The court’s ruling reinforced the fundamental principle that employees have a sacrosanct duty to protect their employer’s confidential information and trade secrets. Unauthorized disclosure or mishandling of such sensitive data can constitute grounds for disciplinary action, including termination of employment. This obligation extends beyond the employee’s tenure with the company, underscoring the enduring nature of confidentiality responsibilities.

Defining Confidential Information: A Contextual Approach

The court adopted a contextual approach in defining what constitutes confidential information in this case. It scrutinized the nature of the information disclosed by the plaintiff-employee, specifically the audit reports from a third-party training organization. The court determined that these reports contained sensitive data pertaining to the defendant-company’s operations, training standards, and were protected by a non-disclosure agreement between the company and the third-party organization.

Notably, the agreement between the employer-defendant and the employee-plaintiff explicitly stipulated confidentiality obligations, whereby the plaintiff agreed to safeguard the defendant’s information and data. This agreement underscored the paramount importance the defendant placed on protecting and preserving information related to its business operations.

However, the plaintiff’s submission of the document containing the defendant’s organizational and managerial information, aimed at ensuring the defendant’s training and assessment standards, to the plaintiff’s personal email account raised significant concerns. This action facilitated the potential unauthorized transmission or removal of such information without the defendant’s ability to monitor or track its dissemination.

Consequently, the court viewed the plaintiff’s actions as a breach of duty, constituting dishonest conduct and an unauthorized disclosure of the defendant’s confidential information. This intentional act was deemed to have caused harm to the employer and amounted to a violation of disciplinary regulations governing workplace behavior.

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Fair Termination Practices: Striking the Right Balance

While acknowledging the employer’s right to terminate employment for breaches of confidentiality, the court emphasized the importance of following fair termination procedures. This includes providing proper notice, adhering to labor laws, and ensuring that the termination is not considered unfair, retaliatory, or discriminatory. The court’s decision serves as a reminder that even in cases of confidentiality breaches, employers must exercise due diligence and uphold principles of fairness and equity.

Burden of Proof: A Stringent Standard

In cases of employment termination, the court placed a stringent burden of proof on the employer to demonstrate that the termination was justified and in compliance with applicable laws and regulations. The employer must provide clear and convincing evidence to substantiate the grounds for termination, particularly in cases involving confidentiality breaches, where the consequences for the employee can be severe.

Balancing Interests: A Delicate Equilibrium

The court’s ruling highlights the need to strike a delicate balance between the employer’s legitimate interest in protecting confidential information and trade secrets, and the employee’s right to fair treatment and due process during termination proceedings. This equilibrium ensures that both parties’ interests are safeguarded and that employment relationships are governed by principles of fairness, transparency, and mutual respect.

Confidentiality Policies and Procedures: A Proactive Approach

The court’s decision underscores the importance of employers implementing robust confidentiality policies and procedures. Clear guidelines, training programs, and well-defined consequences for breaches can help prevent confidentiality issues from arising in the first place. Additionally, ensuring that employees understand and acknowledge these policies can strengthen the employer’s position in the event of a dispute.

Employee Responsibilities: Upholding Trust and Integrity

For employees, this case serves as a reminder of the gravity of their confidentiality obligations and the potential consequences of breaching such trust. Employees must exercise utmost care in handling sensitive information and refrain from any unauthorized disclosure or misuse. Maintaining professional integrity and upholding the confidentiality of employer information is not only a legal obligation but also a ethical responsibility.

The Supreme Court’s ruling in this case has far-reaching implications for both employers and employees. It underscores the significance of maintaining confidentiality in the workplace and the potential consequences of breaching such obligations. At the same time, it emphasizes the importance of fair employment practices, adherence to labor laws, and the need for employers to provide due process and proper justification when terminating employees.

As the business landscape evolves, with an increasing emphasis on data protection and trade secret preservation, this ruling serves as a timely reminder for all parties to exercise caution in handling confidential information and to understand their respective rights and responsibilities in the employment relationship. By fostering a culture of trust, transparency, and mutual respect, employers and employees can create a harmonious and legally compliant work environment, where both parties’ interests are protected, and the sanctity of confidentiality is upheld.

Author: Panisa Suwanmatajarn, Managing Partner.

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Streamlining Procedures on CIPITC Court Cases

Due to the rapid changes in technologies and the necessity for the legal justice system to keep up with the continuous changes, the Central Intellectual Property and International Trade Court (“CIPITC”) issued an updated version of the old Rules on Intellectual Property and International Trade Cases B.E. 2540 (1997) by merging the announcements and/or regulations into an integral part of these provisions.   Essentially, the Rules on Intellectual Property and International Trade Cases B.E. 2566 (2023) (“Rules”) amended the way in which the CIPITC usually proceeds, or how evidence hearing is usually conducted. The Rules now make it clear that the parties can file a complaint, motion, answer, or other pleadings or submit related documents to the court via electronic means. The court may proceed with the hearing wholly or partially by electronic means.   The following is sample of the changes that affect the CIPITC proceedings making them convenient to the parties in dispute.  

Amendment to the Procedures  

Previously, the CIPITC has no authority to suggest alternative hearing methods. It was largely dependent on an agreement by the parties in dispute. The new Rules allow the CIPITC to propose alternative hearing methods, including methods of communication, submission, delivery, and receiving of testimony, which will smooth out advancing the trial. The delivery of documents, summons notice, copies of the complaint, or other court orders, whether to the parties or any third person may be done via electronic mail. For e-mail or other electronic means, the CIPITC would have deemed that such communications or copies of documents are valid once 15 days have passed from the date that such documents and/or information have been delivered.   In a case where the defendant’s domicile is not in the Kingdom of Thailand, the delivery of summon notice and/or copy of the complaint shall be of the same method as the defendant has used in business operation or communication with the party involved in the dispute or has declared it to a government agency, however, the CIPITC would regard such summon notice and/or copy of complaint valid after 30 days passed from the date of such documents and/or information have been delivered. This email address should be used in the defendant’s business operations or has been used in communication with the other party regarding the dispute.   Another important development under the Rules is in regard to the evidence for hearing proceedings. Should any parties wish to refer to electronic evidence, such evidence must be recorded in the records of witness testimony. The recording of witness testimony in electronic form can now be used as is, without having to be transcribed into written testimony as it was done in the past. Witness statements in the past were written in the wording summarizing it from verbal statements given by witnesses.  

Acceptance of Foreign Language Documents 

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The current policy requires most documents in a foreign language to be translated into Thai, but there are exceptions. If the parties agree and the documents are not crucial to the case and are in English, the CIPITC may allow submission without translation. However, the new Rules expand upon this allowance. CIPICT can now permit the submission of documents in any foreign language without Thai translation or with partial translation if both parties agree and the untranslated portions are not crucial. Additionally, the CIPITC can directly examine international regulations, treaties, or guidelines in a foreign language without solely relying on submitted translations. The new Rules enable the consideration of international treaties if Thailand is a contracting party, even without Thai translations. However, it is less clear whether the CIPITC can consider treaties not being raised by the parties, in accordance with international principles and practices.  

Foreign Witness may Submit Written Statement Instead

If a party or all parties have requested and the CIPITC deems it appropriate for the benefit of justice, the CIPITC may allow the submission of the testimony of a witness who resides outside the country to be presented to the court. The witness does not have to appear before the court as a witness. However, the testimony must follow the guidelines specified or the law of the country where the testimony is made.   Obviously, the new Rules will give CIPICT more flexibility and transparency in conducting proceedings, resulting in streamlined court procedures and decreased time and expenses for the parties involved.  

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand – Justice for the Crowd as Class Action  

A class action is a type of lawsuit in which behalf of parties or the group, the plaintiffs, as the plaintiffs can sue a defendant in a single proceeding, but the result could affect the whole of the plaintiffs. This legal mechanism allows individuals with similar claims against a common defendant to join together and pursue their claims as a group rather than as individuals. Class actions are typically used when it would be impractical or unfeasible for every member of the group to file a separate lawsuit. Class actions can provide benefits such as efficiency, consistency, and reduced costs for the plaintiffs, as well as a way for companies and organizations to be held accountable for their actions. This type of lawsuit is originally from the United States. However, several civil law countries commonly use this process for bringing justice to a huge group.

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Thailand also has a class action procedure that is similar to the one in the United States. According to the Civil Procedure Code B.E. 2477 (1934), as amended by the Act Amending the Civil Procedure Code (No.28), B.E. 2558 (2015), the process of the class action must be initiated with a request to the court by one of the plaintiffs, along with prosecution for the beginning of a case. The court will then consider the class action request based on several criteria, including the similarity in nature amongst the group, the difficulty and inconvenience of litigating separately due to the large number of members, and if the class action will be more efficient and fairer than the common litigation.

After the court approves the class action request, the plaintiff is required to pay court fees and expenses for class action to the court within seven days of the rendered order date. If the plaintiff fails to do so, the court reserves the right to cancel the class action and proceed with common litigation instead.

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Class action is typically used in cases where there are a large number of victims, such as consumer or environmental cases. For example, around 3,000 Cambodian villagers initiated a class action lawsuit against a sugar finery company for damage caused when the defendant’s agent entered the land concessions. Witness hearings for this case would have taken a long time due to the large number of victims, which is why class action was the preferred approach.

In conclusion, class action lawsuits are more efficient, fairer, and easier for cases that demand a remedy for several people through a single legal action. It also gives more bargaining power to the plaintiffs and takes less time than common litigation, especially if it involves a large number of people.  

Author: Panisa Suwanmatajarn, Managing Partner.

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