Newsletter No. 15 (EN)

How to Enforce Court Orders and
Arbitration Awards

 

February 2015

 

Overview

After obtaining a court order or an arbitral award it may occur that the defen­dant does not comply with the judgments or awards. While the law in prin­ciple does not allow private parties to enforce an order or an award by themselves, the enforcement has to be done by the power of the governing law or statute.

This Newsletter is made to describe how the execution takes place under the Thai law in respect of civil cases and international commercial disputes, either those resulting from lawsuit or arbitration.

 

I. Execution of Court Orders/Judgments

By the virtue of the Civil Procedure Code (CPC), the execution proce­dures can only begin in the following cases:

  1. When the Court of First Instance or the Court of Appeal has rendered its judgment and the party who lost the case could not get an order for a stay of execution.
  2. The case is final because the party who lost the case did not appeal to the higher court within a specific time period.

Under the CPC, execution procedures are conducted through the following steps:

 

1.          Getting a Decree

Having the defendant to acknowledge a decree from the Court to per­form according to the judgment is the first step necessary before the execution. If the defendant is in the Court during the reading of judg­ment, the Court may record its decree and have the parties sign for ac­knowledgement (Sec. 272 CPC), espe­cially in the case where a compromise or settlement can be reached and the Court decides according to such compromise or settlement. The Court will decide and have both parties sign for acknowledgement by using the phrase “the Court orders the defendant to …… Otherwise, the de­fendant will be subject to prop­erty seizure or imprisonment” (Sec. 273 Para 4 CPC). In this case if the defendant does not perform according to such compromise or set­tlement, the plaintiff can ask the Court to execute the court order immediately without having to submit a statement to the Court asking for a decree.

 

In the event that the defendant does not acknowledge the decree of the Court, the plaintiff’s lawyer has to ask the Court to issue a de­cree by making a statement to the Court saying that the case has been decided but the defendant has not yet acknowl­edged the Court’s decree. In practice, the Court will issue a decree and send it to a Warrant Delivering Officer. Then, the lawyer has to follow up with such officer re­garding when a decree would be issued and request the officer to deliver the issued decree.  If the lawyer does not do so within 15 days after the decree is issued by the Court, the officer will re­turn the de­cree to the Court. Furthermore, the lawyer also has to check the date the de­fendant receives a decree in order to determine the default period. Nor­mally, the Court will demand the defendant to perform within 1 month after the defendant received the decree. If the de­cree is delivered by posting at the defendant’s premises, it will be deemed received 15 days after posting (Sec. 79 CPC).

 

After the due date according to the decree and in case of a debt payment where the defendant can deposit money to the Court as a payment, the law­yer has to check whether the defendant has deposited the money to the Court according to the de­cree or not. This can be done either by mak­ing a statement to ex­amine the file or by checking with the Court’s Treasury Department.

 

In order to obtain the deposited money from the Court, the lawyer has to contact the plaintiff to submit a statement for taking the money. The plaintiff can receive the money by himself or authorise the lawyer to do so.

 

2.         Appointing an Executing Officer

The purpose of appointing an executing officer is to enforce the Court decision. Since the plaintiff cannot enforce the Court decision by himself, the enforcement has to be done by the virtue of Sec. 271 CPC which states that in case the defendant does not comply in whole or in part with the judgment or order and such defendant already acknowledged a decree from the Court to per­form according to the judgment or order, the party who wins the case is entitled to ask the Court to execute by virtue of and in accordance with the decree issued by the Court within 10 years from the date of pronouncement of the judgment or order.

 

Although the CPC does not mention an appointment of an executing officer, Sec. 275 CPC provides that the creditor according to the judgement may submit an application by motion to the Court for a writ of execution and Sec. 276 provides that the Court shall notify such writ to the executing officer. In practice, such application shall in­clude a wording asking the Court to appoint an exe­cuting officer to seize the defendant’s property in the case of money debt.

 

After submitting an application mentioned above, if the motion is granted, the Court officer will issue a writ appointing an executing offi­cer.  This writ will be sent to the Execution Department in Bangkok or to the Execution Office in other provinces.

 

3.         Seizure of Properties

After the writ appointing an executing officer has been delivered, the lawyer has to contact the executing officer for further proceedings. To do so, the lawyer must have another power of attorney signed by the plaintiff. The executing officer will then ask the lawyer to submit deposit money for expenses and then set the seizure date. However, it is also necessary to submit to the executing officer a request form and a property list.

 

To seize property, the lawyer has to accompany the executing officer to the defendant’s residence, land, or other real estate listed (Sec. 279 CPC). The executing officer will record the seizure and announce that the property is seized. In case of movable property, the executing officer may ask the plaintiff or its representative to deliver such prop­erty to the Execution Department for the further compulsory auction. If the property is land or other real estate (immovable property), the executing offi­cer will post a notice there stating that the property is under attachment.

 

The lawyer then has to follow up with the executing officer regarding the public auction date. On the auction date, the lawyer will conduct the auc­tion. If the lawyer sees that the price would be too low, he may ask the executing officer to postpone the auction. If in the next auction, the highest bidder bids at a higher price than the price bid by the highest bidder in the last auction, the executing officer may decide to sell the property to such highest bidder. However, if the lawyer still thinks that the price is too low and such unreasonably low price has taken place in pursuance of a fraud among persons relating to the bidding, or under bad faith or gross negligence of the executing officer in exercising his function, the lawyer may file an application by motion with the Court for an order setting aside the sale by auction.

 

After the property has been sold, the officer will deduct ex­penses and executing fees and then give the money to the lawyer or the plaintiff, as the case may be.

 

4.         Attachment of Claims against Third Parties

In some cases the defendant may not have property to be seized, but has monies which will be subsequently received from other persons, e.g. salary or claims against third parties. The executing officer may ask the Court to detain such amount, which is to prohibit the defendant to dispose of such claims and prohibit third parties to make payment or submit property to the de­fendant but to submit it to the Court instead.

 

In order to attach money or property of the defendant, the lawyer has to submit a peti­tion to the executing officer stating the information of where to attach the de­fendant’s money or from whom the defendant would receive money.

According to Sec. 310 (3) and 311 CPC, it can be inferred that the executing officer may submit an application by mo­tion to the Court in order to attach such claims.  However, in practice there are some rare cases that the executing officer issues an attachment or­der on his own.

 

II. Execution of Foreign Court Orders

It is a fact that every country has a different le­gal system and different rules dealing with the civil procedure. The enforcement of foreign court orders in principle is quite complicated and subject to certain approval procedures under Thai law. Unlike domestic court orders, for­eign court orders (e.g. a judgment of a German civil court) are not likely to be enforceable under Thai law because Thailand did not sign any bilateral agreement or reciprocal agreement with Germany. To execute against a party in Thailand, a new case has to be filed again in Thai jurisdiction. Moreover, the foreign judgment is merely treated by the Thai court as one piece of supporting document to the case. Therefore, it is advisable for the parties to enter into an arbitration agreement in order to secure the enforce­ment and execution in case of cross-border commercial disputes.

 

III. Execution of Arbitral Awards

Arbitration can be defined as a voluntary agreement between the parties to submit a dispute to an impartial person (Arbitral Tribunal) to determine an equitable settlement in a judicial manner.

 

Arbitration can be divided into two categories, national and international arbitration. According to Chapter III of the CPC concerning national arbitration, this type of arbitration is exclusively for the case pending before a Court of First Instance where the parties can choose to submit the dispute to one or more arbitrators for settlement by filing a joint-application to the Court. If the Court is of the opinion that it is not contrary to the law, the Court shall grant the application (Sec. 210 CPC). The award given by the national arbitration is a final binding judgement. However, it is still considered a domestic court order, which is still subject to enforcement and execution limitation in foreign countries.

The Arbitration Act B.E. 2545 (2002) was enacted on 29 April 2002 and enforced on 30 April 2002. This Act replaced the Arbitration Act B.E. 2530 (1987), which was criticized because it did not correspond with the principles of international arbitration law and the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration, which has been widely accepted and recognized as a prototype for international arbitration law. Therefore, a significant consideration behind the current Act (2002) was to adopt the UNCITRAL Model Law as a basis for the core development of the arbitration system in Thailand in order to keep pace with other developed economies and to develop the Thai arbitration system to be on equal terms with international communities, and thereby promoted the use of ar­bitration proceedings in the settlement of international civil and commercial disputes.

Outlined below are several advantages for the parties to refer their dispute to arbitra­tion rather than to commence an action in court:

 

  • The parties can choose the place of jurisdiction, the lan­guage used and the applicable law.
  • The process consumes less time and effort than those in a civil court, and is often more cost effective. Most organizations that provide arbitration offer fee schedules based on the size of the claim.
  • In case that the dispute involves a technical matter, the parties have the ability to select an arbitral tribunal with expertise in a certain subject matter that generally posseses the more ap­propriate qualifica­tions.
  • Unwanted publicity can be avoided because the proceedings are presumed to be confidential and private.
  • Since an arbitral award can only be appealed in certain limited cases, it is usually a final and binding decision.

1.          Recognition and Enforcement

Although one of the most important advantages for the parties to settle their dispute in arbitration is the international recognition of the arbitral award, it is important to note that according to the new Arbitration Act if the award was made in a foreign country, the Court having the jurisdic­tion may pass its judgement enforcing the award only when such award is subject to a Treaty, Convention, or International Agreement to which Thailand is a member, and it shall be enforceable as long as Thailand agrees to be bound by them only (Sec. 41 Para 2). At present, 149 countries have signed the 1958 United Nations “Convention on the Recognition and En­forcement of Foreign Arbitral Awards”, known as the “New York Convention”. This Con­vention facilitates the enforcement of awards in all contracting countries and Thailand became a member in 1961.

 

2.         Application

Under Section 9 of the Arbitration Act, parties can file an application to execute an arbitral award to one of the following Courts:

 

  • The Central International Trade and Intellectual Property Court
  • The Court having the jurisdiction over the place where the arbitration took place
  • The Court having the jurisdiction where either party is domi­ciled
  • The Court having the jurisdiction over the dispute duly for­warded to the arbitrator

 

According to Section 42 of the Arbitration Act, to enforce an arbitral award the winning party has to submit an application to the court having jurisdic­tion within three years from the date the award is enforceable. Along with an application, the following documents shall be attached:

 

  • Original of the arbitral award or its duly certified copy
  • Original arbitration contract or its certified copy
  • Thai translation of the arbitral award and arbitration contract made by a publicly appointed and sworn translator.

 

3.         Judicial Review

Although the Arbitration Act is meant to promote the recognition and the use of ar­bitration proceedings to enforce an arbitral award, the award may be rejected by the Court having jurisdiction, irrespective of the country in which it was made, if the party against whom the enforcement is invoked can prove that:

 

  • A party to the arbitration agreement is incapable under the law applicable to the said party;
  • The arbitration contract is not legally binding under the law of the country to which the parties have agreed upon or, in the case where there is no such agreement, under the law of the country where the award was made;
  • The party whom the award shall be imposed on was not given proper notice of the appointment of the arbitral tribunal or the arbitral proceedings, or the said person was unable to present its case in the arbitration proceedings by other reasons.
  • The award deals with a dispute not falling within the terms of the ar­bitration contract, or contains decisions on matters beyond the scope of the agreement. However, if the dispute can be separated, the court may withdraw only that part.
  • The composition of the arbitral tribunal or the arbitration proce­dure was not in accordance with the agreement of the parties, or was not in accordance with the law of the country the award was made in case the parties have not made an agreement.
  • The award has not yet become binding or has been withdrawn or suspended by a court having the jurisdiction or under the law of the country the award was made, except in the case it is dur­ing the period of asking the court to withdraw or suspend the award, when the court may postpone the proceedings of the ap­plication for the enforcement as it deems fit, and if the party applying for the court to enforce the award makes a request, the Court may order the party whom the award shall be imposed on to furnish a suitable security.

 

These conditions are also in accordance with the conditions set forth in the UNCITRAL Model Law on International Commercial Arbitration.

 

In addition, according to Section 44 the court having jurisdiction may refuse an application if the Court is of the opin­ion that an award deals with a dispute that cannot be settled by arbitration under the law, or if the enforcement under the said award would be against the peace and order or the good morals of the public.

 

However, Section 45 prohibits parties to appeal to the higher court against the order or judgement of the court having jurisdiction, ex­cept:

 

  • The recognition or the enforcement of the said award would be against the peace and order or the good morals of the public.
  • The said order or judgement is against the provisions of the law governing the peace and order of the public.
  • The said order or judgement does not correspond to the award of the arbitral tribunal.
  • The judge or the justice hearing the case has made a counter-opinion in the judgement.
  • It is an order relating to the temporary measure to protect the benefits of the party.

4.         Further procedure

After the Court has passed the order or judgment stating that the award is enforceable, the further execution procedure shall be the same as for a civil court judgment, i.e. getting a decree, appointing an executing officer, seizure, and so on (see page: 2).

 

 

We hope that the information provided in this newsletter was helpful for you.
If you have any further questions please do not hesitate to contact us.

 LORENZ & PARTNERS Co., Ltd.
27th Floor Bangkok City Tower
179 South Sathorn Road, Bangkok 10120, Thailand
Tel.: +66 (0) 2-287 1882
E-Mail: [email protected]

 

 

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