Arbitration Act in Effect
Arbitration Act of 2002 was signed into law on 23, April,
2002 replacing the Arbitration Act of 1987.
comprehensive act provides for the mandatory arbitration of
disputes which are governed by "arbitration contracts",
defined as contracts in writing where parties have agreed
to settle all or certain disputes pursuant to arbitration.
The Act provides for specific provisions for the selection,
appointment, and disqualification of arbitrators. The Act
grants immunity from civil liability to arbitrators and provides
for arbitral panels to use the Civil Procedural Rules in regard
to evidence. Section 41 of the Act provides for judicial enforcement
of arbitral awards, "regardless of the country in which
it was made".
major change in the new Act is the extension of the statute
of limitations from one year to three years for new cases
or cases where "proceedings" have not yet been concluded.
for an award granted in a foreign country, the Act requires
that there be a convention treaty between Thailand and that
country for the award to be enforceable. Further, there are
a number of exceptions noted for denial of enforcement, one
of which is when enforcement of the award "would be against
the peace and order or the good morals of the public".
Ministerial Regulations on Minimum Capital for Foreign Registered
to new ministerial regulations passed in October, 2002, foreign
registered firms wishing to own and operate businesses within
Thailand are subject to new minimum capital requirements.
The new regulations raise the amount of minimum capital required,
set timelines for bringing the capital into Thailand, and
specify the time required to provide evidence that the capital
has been brought into the Kingdom.
2 of the regulations raises the level of minimum capital required
by foreigner registered firms commencing business in Thailand.
According to the regulations, foreign registered business
requiring a license must use a minimum capital not less than
25% of the annual average of the three-year estimated operating
expenses for each alien business or 3 million baht, whichever
is greater. Previously, the requirement was 2 or 3 million
baht, depending on the nature of the business. Nonetheless,
foreign owned businesses not requiring a license must continue
to produce a minimum of 2 million baht.
biggest impact of the changes would seem to be on those businesses
that engage in multiple business activities. According to
the regulations, these businesses would be required to produce
3 million baht per each restricted activity, drastically increasing
the costs of starting up a such businesses.
significant change in the law concerns the time required to
produce and account for their minimum capital. Article 3 calls
for specific timelines for bringing the capital into the country.
Businesses not registered within Thailand, such as representative
offices, are required to bring in the capital within the first
3 years of operations.