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Vol. X No.16 - October 1 - October 31, 2011


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BUSINESS
 

Arbitration in Thailand: Part 4: The Arbitrators

One of the advantages of arbitration proceedings over domestic court proceedings is the opportunity for the parties to select the person(s) that will decide on the issue in question, the arbitrator(s). In arbitration proceedings the parties are enabled to nominate arbitrators that have a certain specialized and up-to-date know-how that might be required to understand the technical background of the issues in question.

The number of arbitrators forming the tribunal must be an uneven number in accordance with Section 17 of the Arbitration Act of Thailand (2002)(the “Act”). If the parties nominate an even number, the appointed arbitrators will need to choose another arbitrator to create an uneven number. If the parties fail to agree on the number of arbitrators the Section 17 further provides that a sole arbitrator will be appointed. In Thailand, exactly how the arbitrators are appointed is up to the parties and generally the parties will agree that the rules of the institute conducting the arbitration dictate this procedure; failing which, the Act would dictate this procedure.

Section 19 of the Act requires that the arbitrator be “independent and impartial” and possess the particular qualifications, if any, agreed by the parties. The interpretations of the terms “independent" and "impartial” are highly controversial and subject to a dispute themselves. In general, it can be said that the absence of close relations between an arbitrator and a party means the arbitrator is independent; whereas "impartiality" refers to the arbitrator’s lack of prejudice with respect to a party or the matter in dispute. Such definitions are, however, still very vague.

Some guidance in this area has been provided by the International Bar Association (the “IBA”) its Guidelines on Conflicts of Interest in International Arbitration (the "Guidelines"). While the Guidelines are not legally binding, the standards they articulate are generally accepted and parties and arbitrators often use and cite them when the assessment of an arbitrator's independence or impartiality is at issue. A potential arbitrator may, for example, turn to the Guidelines to determine what facts he is required to disclose prior to accepting an appointment to act as an arbitrator. Alternatively, for example, a party may turn to them to determine under what circumstances they can nominate or challenge an arbitrator.

Some of the most common issues that need to be assessed when determining whether or not an arbitrator is adequately independent and impartial are:
• the relationship between a party and the arbitrator;
• the relationship between a party and an arbitrator's law firm;
• the relationship between an arbitrator and a party's counsel;
• prior appointments as an arbitrator (repeated appointments by one party);
• ex-parte contacts immediately prior to appointment;
• non-disclosure of any of the above.

It must be noted that none of the above in itself determines that a potential arbitrator is not independent or not impartial. The determination of such will always depend on the circumstances in each individual case. And even no issue raises sufficient doubt of independence or impartiality at one stage of the arbitration proceedings, the arbitrator is duty bound to disclose the occurrence of any such later in the proceedings for the relevant parties' consideration.

In case a party believes that an appointed arbitrator is not independent or impartial, such party has the right to challenge that arbitrator. The procedure for challenging an appointed arbitrator is dictated by the relevant arbitration institute's rules and the Act. Where it is decided that an arbitrator was not independent or impartial at the time of appointment or was no longer independent or impartial later in the proceedings, that arbitrator will then be removed from the arbitral tribunal and replaced.

With regard to the arbitrator's independence and impartiality it is noteworthy that Section 23 of the Act imposes (somewhat controversially vis--vis most other jurisdiction's arbitration legislation) criminal sanctions on any arbitrator for "[...] wrongfully demanding, accepting, or agreeing to accept an asset or any other benefit for himself or anyone else for doing or omitting to do any act in his duties [...]"

Choosing the right arbitrator with the right skill set who will make the right decisions, is among the most important and sometimes also the most difficult decisions in the arbitration proceedings. Whether the right choice is someone with the right formal legal training, skills and experience or someone with a specialized or "hands-on" expertise will depend on the dispute that gave rise to the claim. Competent legal counsel with solid arbitration experience will not only be able to help the parties in making the right choice in relation to the proposed arbitrator, but will also be able to identify issues that makes a challenge of an arbitrator advisable if necessary.

_______________________________________________________________________________________
DUENSING KIPPEN is a multi-service boutique law firm specializing in real estate and corporate/commercial transactional matters as well as arbitration proceedings arising therefrom and is the only such firm in Thailand that also compliments its transactional expertise with a core tax law practice. DUENSING KIPPEN can be reached at: [email protected] or for more information please visit them at: www.dktaxandlaw.com


Arbitration in Thailand: Part 3: The Advantages to Arbitration

Arbitration proceedings offer various important advantages to the normal local court proceedings in Thailand.

To resolve business related disputes quickly and with finality is advantageous to the business community. To say the least, normal court proceedings are not known for achieving either of these desired ends, especially in Thailand. Thus, the fixed time frame to achieve an award outlined by the various arbitration service providers, is one of the most important advantages of arbitration over ligating the dispute in normal court proceedings. Furthermore, unlike a normal court ruling, arbitration awards cannot be challenged on the "material part" of the case. In other words, the award cannot be appealed on the basis of its determination on factual or legal issues. For example, in Thailand, the court that will need to enforce an arbitration award, whether it is an award in an international or domestic arbitration proceeding, is only allowed to set aside such ruling in the following, very limited, cases outlined in Section 40 of the Arbitration Act (2002)(the “Act”):

- A party to the arbitration agreement was under some legal incapacity.
- The arbitration agreement is not binding under the governing law agreed to by the parties, or in the absence of such agreement, the laws of Thailand.

- The applicant was not given proper advance notice of the appointment of the arbitral tribunal, or of the arbitral proceedings, or was otherwise unable to defend the case in the arbitral proceedings.

- The award deals with a dispute outside the scope of the arbitration agreement, or contains a decision on a matter outside the scope of the agreement. If the part of the award that lies outside the scope of the agreement can be separated from the balance of the award, then the court will only set aside that part.

- The composition of the arbitral tribunal or the arbitral proceedings was not in accordance with the arbitration agreement or, unless otherwise agreed by the parties, the Arbitration Act.

- The award deals with a dispute not capable of settlement by arbitration under the law.

- The recognition or enforcement of the award would be contrary to public order.


The enforcement, or rather the "enforceability", of an arbitration award is, itself, another very important advantage of arbitration over normal court proceedings. Unlike foreign court judgements, all countries that are part of the 1958 United Nations New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") will enforce a "foreign" arbitration award if that award was made in a country that is also a signatory to the New York Convention. There are currently 144 signatories, including Thailand, to the New York Convention. Section 41 of the Act states that “(...) an arbitral award, irrespective of the country in which it is made, shall be recognized as binding on the parties(...). In case where an arbitral award was made in a foreign country, the award shall be enforced by the competent court(...)”.

Turning to the proceedings itself, It is not uncommon that disputes between parties require specialized knowledge to understand the nature of the dispute. A local court judge may not have such knowledge. Arbitration proceedings, however, provide the opportunity to the parties to have the dispute settled by a specialist or practitioner who understands the issues surrounding the claim from a practical point of view. In Thailand, this enhanced adjudicatory flexibility is reflected in Section 19 of the Act which defines a qualified arbitrator as one who is ”(...) impartial, independent and possess the qualifications prescribed in the arbitration agreement (...)”.

Furthermore, the parties in an arbitration proceeding are not only able to select their qualified arbitrator, but they also have the right to choose the place and the language of the arbitration proceedings. For anyone doing business in a foreign country, to select a convenient venue for the proceedings and to be able to understand the proceedings without the necessity of a translator and to be able to submit all documentation without having to translate them into a foreign language are major advantages to settling disputes by arbitration.

Finally, one more procedural advantages of arbitration over normal court proceedings relates to "Service of Process" or how one party or the adjudicator formally notifies the other party of matters in the proceeding, for example, that the case has been filed commencing the proceedings. Service of Process in court proceedings is time consuming and can be quite expensive. In Thailand, this is particularly true in disputes involving a defendant who is located outside of Thailand which requires lengthy notification process involving the Thai Ministry of foreign affairs. In arbitration proceedings, however, it is not necessary to involve any government agency. The arbitration service provider is able to service the defendant directly.

Duensing Kippen is a multi-service boutique law firm specializing in real estate and corporate/commercial transactional matters as well as arbitration proceedings arising therefrom and is the only such firm in Thailand that also compliments its transactional expertise with a core tax law practice. Duensing Kippen can be reached at: [email protected] or for more information please visit them at: www.dktaxandlaw.com.


Philippine parliament pushing to legalize divorce

The Philippines is a traditional Catholic country where divorce is still illegal, the government hopes to change that.

By Madonna Virola, Manila, Philippines

The Philippines and the Vatican are the only two places in the world where divorce is prohibited, but with a parliamentary push for a divorce bill the Vatican might be left alone. Inspired by events in Malta, which legalized divorce this year, the Filipino government is pushing for the same.

Congresswoman Luzviminda Ilagan helped draft the first divorce bill in 2004 and says it’s time to revisit the issue again.

“There are a lot of unhappy marriages and a lot of women who suffer from repeated domestic violence. This is the reality we face,” says Llagan. According to Llagan, police records in 2009 showed that 19 women were victims of marital violence every day.

Under existing Filipino law, a marriage can be terminated or annulled but it’s a long and costly process. Most people that want a divorce end up legally separating, but this does not allow them to remarry. The proposed bill is intended to allow couples to seek a divorce more easily if they meet the stipulations for a legal separation, says Ilagan.

The bill would make violence, infidelity and abandonment all grounds for annulment. “A couple can get a divorce if they’ve been separated for at least five years or if they meet other criteria for legal separation. Why not grant them a divorce so they can move on if they want to marry again,” she says.

Single-parent Maria Estela Gaba has been trying to get a divorce since her husband left her and says she would like to have the opportunity to remarry.
“Why not give a chance to others who are really sincere,” she says. “It might just be that their first marriage didn’t work out.”

A poll by Social Weather Stations found that half of all Filipinos support the legalization of divorce, but the influential Catholic Church remains fiercely opposed to the revision. More than 81 percent of the country’s population of more than 80 million is Catholic. Cannon lawyer Vic Uy is a judge on the marriage tribunal which decides whether a marriage can be annulled or not and says the church believes that divorce is immoral.

“It’s a no, no, no. It is very clear that marriage is a permanent union between husband and wife from marriage till death,” he says.

According to women’s rights activists, the country’s male-dominated society is insensitive to the needs of women who are conditioned to be “victims” and “martyrs.”

But Father Melvin Castro, an executive secretary from the episcopal commission of the Catholic Bishops Conference of the Philippines, disagrees. “I’ve seen people whose marriages don’t work, but the women won’t marry again because of their love for their children. A Filipino woman finds her identity as a woman in being a mother,” he says.

If the divorce bill fails to get passed, the Philippines and the Vatican will remain the only countries where divorce is prohibited. Father and lawyer Vic Uy says this would make him a proud.

“I’d rather have the Philippines as the only state in the whole world to have the distinction of having no divorce,” he says.

For Estela Gaba, it’s only a matter of time before Filipinos will be given the right to divorce. “It will take time, but this will become a national issue because every day cases of violence against women are increasing. Debating this issue will benefit the next generation,” she says.

This article was first broadcast on Asia Calling, a regional current affairs radio program produced by Indonesia’s independent radio news agency KBR68H and broadcast in local languages in 10 countries across Asia. It is published in conjunction with the Faculty of Mass Communications, Chiang Mai University. You can find more stories from Asia Calling at www.asiacalling.org.


HEADLINES [click on headline to view story]

Arbitration in Thailand: Part 4: The Arbitrators

Arbitration in Thailand: Part 3: The Advantages to Arbitration

Philippine parliament pushing to legalize divorce
 

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