Volume 8 Issue 2
April- June 2006         
SGA Bulletin
Supreme Court Opinions  

Re: Gambling Loans (Napor v. Thong-yoy)


Re: Declaration of Intention, Hire of Property (Wattanatum v. Leetrakoolwalna)


Re: Prescription and Labor (Government Savings Bank v. Ruksil)


Re: Joint Liability of Employers (Kritpol v. Lertsongkram)

The SGA Bulletin is intended for informational purposes only. It does not constitute legal advice. Legal, business and other information is subject to change and no warranty is either expressed or implied.

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Copyright SGA 2000-2006

Compensation Benefits for Employees Terminated After Tsunami

A Royal Decree issued by H.M. the King Bhumibol Adulyadej on 3 March 2006 entitles former employees at places of business affected by the 26 December 2004 Tsunami to compensation benefits for injury, sickness, child delivery, disability and death. If employees terminated from 26 December 2004 to 30 June 2005 were eligible for compensation benefits at the time of the Tsunami, they are entitled to compensation benefits for a period of 12 months after their termination.

Revenue Code Amended

Acting under the authority of the Revenue Code Amendment Act, H.M. the King issued Royal Decrees on 3 March 2006 to exempt the Forward Agricultural Market of Thailand and the International Para Rubber Joint Venture Company Limited from business tax and income tax respectively. Forward Agricultural Market of Thailand was exempted from paying business tax so that prices will reflect the general agricultural market and therefore boost business and the economy. The International Para Rubber Joint Venture Company is a venture of the Malaysian, Indonesian and Thai governments. The International Para Rubber Joint Venture Company is exempted from income tax as was agreed in the Memorandum of Understanding establishing the joint venture between the countries.

New Regulation Designed to Keep Foreigners Out of Thai Real Estate Business

The Ministry of Interior issued a new regulation on May 15, 2006 intended to crackdown on foreigners engaged in the real estate business in Thailand . Foreigners attempting to circumvent Thai law prohibiting aliens from owning land establish “shell companies” composed of Thai nominees who lack real interest in the company. Foreigners use these companies to illegally purchase and sell land to other foreigners. The Ministry of Interior has requested that the Department of Land investigate the background of any Thai nominee in a company with foreign shareholders and foreign directors who are suspected to hold their position in place of a foreigner. The land officer will examine their occupation, their monthly income and their length of employment to ascertain the Thai shareholders role is genuine before a land purchase can take place.

Amendments to Operations of Telecommunications Business Act

The Act on Operation of Telecommunications Businesses was amended on 21 January 2006 . Telecommunications businesses owned by foreigners will not be granted second and third category operation licenses. Licensed telecommunications businesses will not be allowed to collect a security deposit from their customers unless it is for the benefit of consumers. The Communications Authority of Thailand, or the Telephone Organization of Thailand, refers to the company established under the law governing state enterprise capital for the operation of telecommunications businesses.

SEC Closing Illegal Investment Sites

The Securities and Exchange Commission will begin to more closely monitor investment sites as is demonstrated by the mid-July shut-down of dsm-stockpile.com. The Security and Exchange Commission regulates advisory and asset management services in accordance with Section 90 of the SEC Act. Individuals offering investment and advice management are required to be both properly licensed and work at approved asset management firms or securities brokers. This regulation applies to individuals offering investment advice and services over the internet. Pravej Ongartsittigul, senior assistant secretary general of the SEC, explained that dsm-stockpile.com was closed because the site managers were found to be dispensing advisory services and managing assets without a license or approval from the SEC. Websites can continue to provide investment information and discuss market issues as long as they are not in violation of the SEC Act.

SGA Bulletin
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Exemptions to Electronic Transactions Act

HM the King issued a Royal Decree on 3 March 2006 exempting family transactions and legacy transactions from the Electronic Transactions Act, a 2001 Act giving electronic transactions and electronic signatures legal status equivalent to transactions and signatures made on paper.

New Bill is Drafted to Strengthen Protection of Women Aganist Sexual Harrasment

The Office of Womens Affairs and Family Development is drafting the “Gender Equality Promotion Bill” to address gaps in the protection offered to women against sexual harassment under existing law. The new bill, the final draft of which will be completed in September, will offer an alternative grievance procedure to victims of sexual harassment and will establish a special committee to monitor the law's enforcement.

Board of Investment Endorses New Incentive Package in 3 Sectors

The Board of Investment introduced new incentive packages in the electronics, petrochemical and agro-processing sectors on 23 May 2006 to promote investment and the growth of export industries. Promotional privileges will be granted to projects in the electronic sector with a value of at least 30 billion baht, projects that use state-of-the-art technology or projects that switch to local production. The duty will be waived on machinery imports to promote the expansion of the automotive rubber manufacturing industry.

Academics Propose Amendment to Lese Majeste Article of the Penal Code

Article 112 of the penal code stipulates that lese majeste, the defamation, insult or threatening of the Royal Family, is a punishable offense. A group of academics at a Thai Journalists Association conference in Chaing Mai at the end of April proposed that the lese majeste clause should be amended. The current clause allows state officials to file lese majeste charges on behalf of the government and is thought to sometimes be used as an attempt to silence politicians. The academics propose that only the cabinet should be authorized to file lese majeste charges on behalf of the government.

Court to Drastically Change Handling of Environmental Cases

The Supreme Court is considering drastic changes in the way it handles environmental cases. The proposed changes being considered at the end of May will shorten deliberation time in environmental cases and increase the likelihood that an offender will be prosecuted. The court fee may be waived to enable poor plaintiffs to file legal action against industrial offenders. The burden of proof may be lifted from the plaintiff and placed on the defendant.

Tokyo Asked to Revoke "Rusie Dutton" Yoga Trademarks

The Intellectual Property Department asked the Japanase Patent Office to revoke the patent of yoga business operator, Masaki Furuya, on the “Rusie Dutton” traditional Thai yoga posture. Kanissorn Navanugraha, an official at the Intellectual Property Department, claims that the patent is in violation of both international and Japanese property laws which prohibit registration of widely recognized goods and services without innovation.

US and Cambodia Sign Bilateral Trade Agreement

A bilateral trade agreement (TIFA) has been reached between the United States and Cambodia . The agreement will increase trade and investment between the two countries and covers issues including intellectual property rights, trade facilitation, and customs arrangements. The agreement is part of the Bush administration's Enterprise for Asean Initiative, an initiative seeking to strengthen US trade and economic ties with Asean member countries.

Civil and Commercial Code Amended

Several sections of the Civil and Commercial Code were amended on 24 November 2005. The revisions to the Civil and Commerical Code include a clarification of the evidence of ownership of property and loans, freedom of information provisions and regulations concerning lost property. In order for the sale of immovable property, or movable property with value exceeding 20,000 baht, to be legally recognized, the sale must be made in writing and must be registered by a competent official. For a loan of over 2,000 baht to be legally recognizable, there must be written evidence of the loan with the signature of the person borrowing the money. New amendments to the Civil and Commercial Code also clarify the legal responsibility of companies to provide information upon request to the public and to their shareholders. Any interested person is entitled to obtain from any company a copy of the company's memorandum, regulations and latest balance sheet. A shareholder is also entitled to a copy of the company's register for a sum that cannot exceed 5 baht for each page that is copied. Revisions relating to lost property include the establishment of the right of the person who finds lost property to receive a reward of 10% of its value. When an object of value is found that no person can claim to own, then the state is the legal proprietor. The person who has found the property is entitled to a payment of one third of the objects value.

Supreme Court Opinion No. 247/2548
v. Thong-yoy

Re: Gambling Loans

The plaintiff, the defendant and their associates “play shares” (a type of gambling where the players wager money on shares) with the plaintiff as host. According to the agreement between the host and the players, after a player bids upon a share, he or she must sign a loan for the wagered sum of money. The defendant wagered 82,800 baht which she borrowed from the plaintiff. The loan agreement is not forged and the defendant is liable for performance of truth to the plaintiff according to the loan agreement.

Supreme Court Opinion No. 1602/2548
Wattanatum v. Leetrakoolwalna

Re: Declaration of Intention, Hire of Property

The plaintiff inherited the building in dispute from Por. A contract of hire made between Por., as the landlord, and the defendant, as the lessee, will expire after 15 years. Clause 11 of the contract of hire specifies that the landlord will renew the contract of hire every 3 years after the initial period of hire expires. This specification is only a promise from Por. and does not make the contract of hire come into existence. The promise does not have a binding effect upon Por. because it does not appear that the defendant declared his intention to accept Por.'s offer before Por's death. The defendant acknowledged that Por. died on July 15 th B.E. 2537 before the contract of hire expired on December 31 B.E. 2538. According to Section 360 of The Civil and Commercial Code, the provision of Section 169 paragraph 2 does not apply to this case. On the ground that the promise of Por. is not a legal contract, it does not have a binding effect upon the plaintiff. The plantiff does not need to comply with the provisions of Section 1599 and Section 1600. Because the letter of renewal of the contract of hire is ineffective and does not make a new contract of hire come into existence, the plaintiff is able to sue for the eviction of the defendant and the dependents of the defendant from the disputed building. After the expiration of the contract of hire, the defendant and his dependents had no right to live in the disputed building. Due to the fact that the defendant and his dependents occupy the building unlawfully, they are liable for eviction and their actions that disabled the plaintiff from gaining interest from the building in dispute.

SGA Bulletin
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Supreme Court Opinion No. 360/2548
Government Savings Bank
v. Ruksil

Re: Prescription and Labor

The plaintiff sued the second defendant for defecting on his duty and causing damage while working for the plaintiff. He is asking the first defendant for compensation. This plaintiff is accusing the defendant of committing a wrongful act while working and therefore breaching a labor agreement. In this case, there is no specified period of prescription, thus the period is ten years.

Supreme Court Opinion No. 1756/2548
Rattanabadin Company Limited v. Maochai

Re: Contract of Compromise

A contract of compromise is a contract by which parties settle a dispute through mutual concessions. The first defendant delegated the third defendant, a party not liable to the plaintiff, to meet the plaintiff's attorney without an appointment. The third defendant acted independently when he arranged a contract of compromise between the first defendant and the plaintiff through which the first defendant will pay an outstanding debt to the plaintiff in installments. The third defendant's intentional and independent actions make him jointly liable with the first defendant. A clause in the above contract specifies that the plaintiffs did not waive their claims to liability from the first and the second defendant. The contract clearly specifies that it is not intended to fulfill the first and second defendant's arrears. Although the contract is called the contract of compromise, it is not a legally recognizable contract of compromise. It is a contract made by the third defendant who by this action became jointly liable

Supreme Court Opinion No. 593
Kritpol v. Lertsongkram

Re: Joint Liability of Employers

The first defendant, an employee of the second defendant, hit the first plaintiff's taxi causing her injury while working for the first second defendant. The first plaintiff's taxi was driven by the second plaintiff. The second plaintiff no longer has a case because although the Supreme Court found only the first defendant negligent, the Appeals Court ruled the second plaintiff was also negligent. However, the judgment of the Supreme Court will prevail and both defendants have to make compensation to the plaintiffs.

Supreme Court No. 886 /2548
Scandinavialeasing Public Limited v. Sahapybulkij

Re: Designation of Authorization

Jor. and Kor. are employees of I, S. Company. Wor. is the company director. Wor., the plaintiff, sued Jor. and Kor., the defendants, for acting without authorization on behalf of the company. Jor. and Kor. claim that they acted with authorization and therefore the plaintiff does not have the right to sue. The plaintiff's Power of Attorney contains the following statements; “Sor. and Wor., the authorized directors of I,S. Company have designated Wor. to be the solely authorized company agent with the power to affix his signature together with the stamp and the official seal and/or to act on company's behalf as follows:… Clause 1. The authorized person is empowered to sue…. Clause 9. ….authorized to designate a sub-agent vested with the power to take any of the above actions…” A second POA contains statements such as, “Wor, the authorized director of I,S. company, designates Jor. and/or Kor. to be company agents empowered to act on the behalf of the company as follows; …” The final POA specified that Wor. is the appointee authorized to act as the company director. Section 10 of the Civil and Commercial Code states, “When a clause in a document can be interpreted in two ways, weight will be given to the interpretation that allows for stricter implementation”. Therefore, the POA and the plaintiff's deed of appointment, specify the plaintiff as the person authorized to act for the company. Jor. and Kor. are sub-agents who can carry out entrusted duties but cannot act as the authorized director of a company. Therefore, the plaintiff is empowered to sue.

Supreme Court Opinion No. 1456/2548
v. Peingkok-krawd

Re: Land, Possessory Right

An area of land given to the defendant by the plaintiff is disputed. In order to settle the dispute, the Supreme Court must determine how much land was given to the defendant by the plaintiff in order to determine if the estate in dispute is the property of the plaintiff or of the five defendants. If it appears that the plaintiff never gave an estate to the first defendant, then the estate belongs to the plaintiff. Thus the Court must reconsider to whom the land belongs. A letter bestowing the estate upon the defendant written by the plaintiff and Nor. Sor. 3 specify that the plaintiff and Por. gave an estate of 3 Ngan 16 m 2 to the defendant, in accordance with Nor. Sor.3. When the first defendant took possession of the estate, the plaintiff never objected. When the first defendant had a land officer survey the land for a title deed, the plaintiff acknowledged the boundary line in his capacity as the owner of the adjoining land, although he was unaware of the exact area of the defendant's estate. According to the plaintiff's recorded testimony, the plaintiff agreed that the land survey was correct and there was no encroachment on the plaintiff's property. Therefore the first defendant's ownership of the estate was acknowledged by the plaintiff. The plaintiff's acknowledgement of the land deed is of greater importance than either the letter or Nor. Sor. 3. The 1 Rai 99 m 2 area registered on the title deed is therefore the area of the defendant's estate rather than the 3 Ngan 60 m 2 area specified in the letter of bestowal and Nor. Sor. 3.

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