Kata Rocks
THE PAVILIONS PHUKET BRITISH INTERNATIONAL SCHOOL, PHUKET Kata Rocks
Login | Create Account Poll Currency Weather Facebook Youtube Search

Phuket Law: Investing in rights – Thailand’s protection in investor-state projects

PHUKET: The continuing rolling out of major development projects initiated by the Thai government in Phuket and elsewhere in the country has thrown the legal state of play of investor-State agreements into sharp relief.

economicsconstructionlandpropertytransporttourism
By Jerrold Kippen

Sunday 20 December 2015, 01:00PM


Thailand has hopped forward, and skipped back, as it inches ahead with upholding investors’ rights in state contracts. Photo: The Phuket News / file

Thailand has hopped forward, and skipped back, as it inches ahead with upholding investors’ rights in state contracts. Photo: The Phuket News / file

To this, our first column in our three-part series on “Investor-State Agreements in Thailand: Encouraging Investment By Protecting Foreign Investors”, explained the different forms of rights foreign investors can make use of in public-private contracts (“PPCs”) and investment treaties (“ITs”). (See story here.)

Our second instalment focused on what legal options are available in enforcing those rights. (See story here.)

This week we look at the latest developments in how Thailand has supported rights enshrined under investor-State agreements.

Thailand can properly point to several successful foreign investor-State projects in recent years. However, in December 2003 the Civil Court of Thailand upheld a B6.2 billion international arbitration award against the Expressway and Rapid Transit Authority of Thailand (ETA), a Thai government agency, in favour of Bangkok Expressway PLC, a Thai-foreign joint-venture company, regarding their PPC to construct the Bang Na-Chonburi elevated expressway and a concession to thereafter operate it. Following this, on January 27, 2004, the Thai Cabinet passed a resolution prohibiting the inclusion of arbitration in PPC contracts involving concessions without prior approval by the Cabinet.

Then, on July 1, 2009, Walter Bau AG (a foreign contractor) was awarded approximately 30 million euros in an international arbitration regarding the construction of the Don Muang tollway. And – although this arbitration was brought under an IT – on July 28, 2009 the Thai Cabinet issued a resolution extending the 2004 resolution to all PPCs.

Both Cabinet resolutions, as well as other instances where Thai courts have refused to enforce international arbitration awards based on interpretations, which are not in keeping with international norms, have caused concern to the foreign business community in Thailand.

Furthermore, although Thailand signed the Washington Convention in 1985, it still has not ratified it. Undeniably, these issues must be considered in the course of any potential foreign investor’s contemplation of contracting with the State in Thailand.

However, despite these issues, Thailand remains a part of the trend to protect foreign investors by way of its several IT commitments. And even with regard to PPCs themselves, it should be noted that Cabinet approval for the provision of arbitration therein has actually been granted in several instances since 2010.

Laguna Golf Phuket

A further encouraging sign is the July 14, 2015 Cabinet resolution, which amended the 2009 resolution. Pursuant to this Cabinet approval of arbitration in PPCs is now required only for:

1) contracts covered by the Private Investments in State Undertakings Act (2013), which includes all PPC for projects worth B1 billion or more; and

2) all PPCs involving concessions.

Thus, any potential investor should consider PPC contractual provisions with the Thai State, including arbitration as the means to resolve any dispute. And any applicable IT – which may still achieve what may not be obtainable by way of a negotiated PPC.

Furthermore, with little exception, the current dominant global and regional international trend is to favour protection and enforcement of rights between investors and State parties.

Thailand has always been and continues to be a responsible and active member of the global economic community. It is anticipated that Thailand will continue its path towards harmonization with internationally accepted foreign investor-State practices.

 

Duensing Kippen is an international law firm specializing in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in 45 other countries. Visit DuensingKippen.com

 

 

Comment on this story

* Please login to comment. If you do not have an account please register below by simply entering a username, password and email address. You can still leave your comment below at the same time.

Comments Here:
Comments Left:
# Characters
Username:
Password:
E-mail:
Security:

Be the first to comment.

Have a news tip-off? Click here

 

Phuket community
Phuket Police say investigation into Finnish girl’s death inconclusive

Whether she was a 'girl' or a woman' is immaterial, the fact that she has died is the cr...(Read More)


PPRP ‘seals deal’ to form coalition govt

So, 'translating' what the military sources are saying is that a few civilian parties are al...(Read More)


PHUKET XTRA: VIDEO: Road rage axe attack? Drugs found in rectum! Dark web bust sees 50 kids saved! || May 23

Did the police contact the Phuket based foreign Inspector .... for his expertise on how to extract t...(Read More)


May 4 approved as Coronation Day

...How many people he thinks do really benefit from those holidays ?Most Thai's are working anyw...(Read More)


Phuket braces for heavy weather, small boats advised to stay ashore

All chinese passengers, brace for heavy sea inpact before boarding coming days! You are warned! Rem...(Read More)


Phuket braces for heavy weather, small boats advised to stay ashore

Well, mr Wiwat, just covered himself (' I told you, not my responsible any further'). When...(Read More)


Four dead as pickup truck slams into tour bus heading to Phuket

Haha...driver to check if had taken drugs/alcohol. How silly is that? Riding on the back of the tru...(Read More)


One billion baht found in teenage drug dealer’s accounts

Wow, a 19 years old thai man, in drugs business with more than 1 million thb in his personal account...(Read More)


Government clamps down on surging illegal Thai migration

And, day in, day out, many thai having been illegal staying/working in Korea of course return to Tha...(Read More)


Men arrested for axe-wielding road-rage attack on ambulance

These two morons are seriously primitive in their mental capacity and cerebral development. No way ...(Read More)