Why Arbitration Struggles to Take Root in Thailand: Unpacking the Challenges

Why Arbitration Struggles to Take Root in Thailand: Unpacking the Challenges

Arbitration, often hailed as a faster, more flexible alternative to traditional litigation, has yet to win over the hearts and minds of Thailand’s commercial and legal communities. Despite its global reputation as an efficient dispute resolution mechanism, arbitration in Thailand remains overshadowed by the country’s court system. The reasons for this are complex, rooted in a mix of cultural, legal, and practical barriers that continue to stifle its growth. While there are glimmers of progress, significant challenges persist—here’s a closer look at why arbitration hasn’t quite found its footing in the Land of Smiles.

A Knowledge Gap That’s Hard to Bridge

One of the most glaring obstacles is a simple lack of awareness. Many businesses in Thailand—small and large alike—don’t fully understand what arbitration entails or how it could benefit them. For the average company, the court system feels like a known quantity: familiar, predictable, and deeply entrenched in the national psyche. Arbitration, by contrast, can seem abstract or even intimidating. Why opt for something untested when the courts have been the go-to for generations?

Efforts to change this are underway. Organizations like the Thailand Arbitration Center (THAC) under the Ministry of Justice and Thailand Arbitration Institute (TAI) under the Court of Justice and other bodies have launched campaigns to educate stakeholders about arbitration’s advantages—confidentiality, speed, and the ability to choose your decision-maker, to name a few. But these initiatives are still in their early stages, and their reach remains limited. Without a broader shift in understanding, arbitration risks staying on the sidelines, a niche option for the few rather than a mainstream tool for the many.

Cultural Ties to the Courts

Thailand’s preference for traditional dispute resolution runs deeper than just familiarity—it’s cultural. The judiciary holds a revered place in Thai society, seen as a pillar of stability and authority. Arbitration, on the other hand, carries a whiff of skepticism, especially after high-profile cases involving state entities that left a sour taste. When multimillion-dollar disputes with government agencies have ended in controversial arbitral rulings, the fallout has fueled a perception that arbitration might not be as trustworthy or impartial as the courts. This historical baggage weighs heavily, particularly in cases tied to public interest, where the stakes—and scrutiny—are sky-high.

This cultural lean isn’t just about habit; it’s about trust. For many Thai businesses and individuals, handing over a dispute to a private arbitrator feels like a leap of faith compared to the structured, state-backed process of litigation. Breaking that mindset will require more than education—it’ll take a cultural reframing of how disputes can and should be resolved.

Courts: Allies or Obstacles?

On paper, Thailand’s legal framework supports arbitration. The country is a signatory to the New York Convention, and recent court decisions suggest a more pro-arbitration stance. But in practice, judicial attitudes can still throw a wrench in the works. Thai courts have a history of setting aside arbitral awards on grounds like “public policy” or “morals”—terms vague enough to invite interpretation and inconsistent enough to erode confidence. When a hard-won arbitral award can be overturned for reasons that feel arbitrary, it’s no wonder parties think twice before committing to the process.

Then there’s the red tape for government agencies. Under Thai law, state entities need special approval to include arbitration clauses in contracts—a hurdle that doesn’t exactly scream “arbitration-friendly.” This restriction not only slows down adoption but also sends a signal that arbitration is secondary, a last resort rather than a first choice. Until the judiciary and government fully embrace arbitration as an equal partner to litigation, its credibility will remain on shaky ground.

The Arbitrator Shortage

Even if awareness and trust were in place, there’s a practical problem: Thailand lacks a deep bench of qualified arbitrators. International disputes, in particular, demand professionals with specialized expertise, fluency in languages like English or Chinese, and a firm grasp of complex procedural rules. While Thailand has skilled legal minds, the pool of arbitrators meeting these criteria is still small. For businesses weighing their options, the prospect of an inexperienced or underqualified arbitrator can be a dealbreaker—especially when they could instead turn to a seasoned judge in the court system.

This scarcity also limits Thailand’s appeal as a regional arbitration hub. Neighboring countries like Singapore and Hong Kong have built thriving arbitration ecosystems partly by cultivating a robust roster of experts. If Thailand wants to compete, it’ll need to invest in training and attracting top-tier arbitrators—a long-term project that’s only just beginning.

Enforcement Woes and Efficiency Doubts

Arbitration’s promise of speed and finality doesn’t always hold up in Thailand. Enforcing an arbitral award can turn into a slog, with losing parties deploying delay tactics to drag out proceedings. What starts as a streamlined alternative can end up mired in the same frustrations as litigation, chipping away at arbitration’s appeal. Add to that the absence of third-party funding—a mechanism that helps level the playing field in places like Singapore or the UK—and access becomes an issue. For smaller businesses or individuals, the upfront costs of arbitration can feel prohibitive without financial backing.

Efficiency isn’t just about time; it’s about certainty. When enforcement feels uncertain or unpredictable, the whole value proposition of arbitration starts to unravel. Why choose a process that might leave you fighting the same battle twice?

A Path Forward

Despite these hurdles, there’s reason for cautious optimism. The Thai government and arbitration advocates are pushing for reforms—streamlining enforcement, expanding arbitrator training, and promoting arbitration as a viable option for domestic and international disputes. Younger generations of lawyers and business leaders, exposed to global practices, may also help shift attitudes over time. If these efforts gain momentum, arbitration could slowly shed its underdog status.

For now, though, arbitration in Thailand remains a work in progress. It’s caught between a legal system that’s evolving and a society that’s hesitant to let go of tradition. Addressing the knowledge gap, building trust, and tackling practical barriers will be key to unlocking its potential. Until then, the courts will likely keep their crown as Thailand’s dispute resolution king—but arbitration’s day may still come.

SEAProTI’s certified translators, translation certification providers, and certified interpreters:

The Southeast Asian Association of Professional Translators and Interpreters (SEAProTI) has officially announced the criteria and qualifications for individuals to register as “Certified Translators,” “Translation Certification Providers,” and “Certified Interpreters” under the association’s regulations. These guidelines are detailed in Sections 9 and 10 of the Royal Thai Government Gazette, issued by the Secretariat of the Cabinet under the Office of the Prime Minister of the Kingdom of Thailand, dated July 25, 2024, Volume 141, Part 66 Ng, Page 100.

To read the full publication, visit: the Royal Thai Government Gazette