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TH,

 

Can you for once respond to one of my posts without a personal attack against me. For example:

 

Your true antagonism to Thais and your ethnocentrism is again revealed despite your attempts to hide it within some pseudo-intellectual mumbo jumbo that so many buy into.

 

This is childish. And anyone viewing this thread should take this childish remark into account when assessing your post. Your incoherence justifiably deserves to be viewed with jaundiced eyes.

 

That along with the following comment that evidences, as a simple matter of indisputable fact, that you really don't understand what you are talking about:

Note that Thailand has an ICC and in many contracts with arbitration clauses, the proceedings would be held in Thailand under Thai ICC rules
Note what: "Thai ICC rules"? The ICC rules are international; they are not country specific.

 

They are also irrelevant here since the arbitration here was not conducted under ICC rules. OK, it's evident you are clearly out of your depth and, to compensate for that, you are rely on personal attacks. From you, I am used to that and I suspect most who read this board are as well. But aren't you the least bit embarrassed? You should be.

 

The best points have already been made. Do you really think an international investor here trusts the Thai courts? Come on. Get real.

 

Speed is an issue because the Thai courts take forever, but the more fundamental issue is fairness. Why else would the Japanese investor insist on international arbitration clause. Why do all of the foreign chambers of commerce oppose Thailand's reluctance to employ arbitration clause?

 

I guess there all misguided and anti-Thai? Or could this be the product of bitter experience. The world is getting smaller and information is readily accessible now: we now the answer is the latter.

 

For the average poster here, consider this question: if you had a business dispute with the Thai government where it owed you millions of dollars, would you prefer an international and impartial body of some sort - an arbitration panel - deciding the case or a Thai court? Pretty easy call, except for TH, who apparently recommends a Thai court. Can you trust anyone who is so obviously wrong on such an obvious point?

 

Consider further that by most measures, transparency international or PERC, Thailand is considered very corrupt. The WTO essentially came out and said this in its recent decision. This isn't anti-Thai. It's fact.

 

And the fact is that most countries - at least countries where we trust the government and courts - pay and comply when they lose an international arbitration. It's true that countries alike Nigeria and Indonesia engage in all sorts of shenanigans when confronted with unfavorable arbitration awards (these are the countries that came up on my Google searches on countries that don't comply), but I think Thailand can and should do better. Indeed, I think people, like you, who put forward such lame excuses for such clearly irresponsible behavior on the part of Thai officials, are truly doing a disservice to Thailand.

 

Thailand can do better. It can comply with its international obligations. And apologists for Thai exceptionalism and racism are not doing Thailand any favors. They're part of the problem here.

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What makes this case so controversial is the claim came about because of the actions of the TRT government in 2004 to not raise the tolls as required by a MOU signed in 1996. Thaksin made huge amount of political hay out of not raising the tolls, he held a press conference at the toll plaza announcing that not only would the tolls not be raised, but they would be lowered until the amount collected by the raise he was reversing was recovered by the motorist.

 

Why above quote makes the case controversial? Like in many other cases Thaksin shot from the hip; clearly disregarding contractual commitments that cost the company millions of Euro. If a government decides to subsidize, fine but it can't be done at the cost of the investor. The Thai government should have paid the difference. So to me it is a one sided breach of contract by the Thai government, very clear and nothing controversial at all.

 

I also agree with Gadfly that Thai courts can't be trusted, especially in cases Thai government against foreign investors/companies.

 

Another frequent scam are contracts in Thai language. English is a much more precise language than Thai. English has often several words with only a gradual difference in their meaning, but Thai always uses one and the same word. The result is that if you let translate of contract written in Thai by 5 different law firms, you will get 5 (slightly) different translations.

A nightmare for every project manager but it becomes particularly problematic in the case of legal disputes.

 

I experienced various cases where Thais tried to take advantage of this fact that Thai is less precise than English; often using it as an excuse to explain unclear paragraphs in their contracts. As a lesson learned, we always insisted also on a signed English version of the contract; otherwise no deal.

 

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Thai can be written to be very precise, but I am sure the companies would seek to make things vague.

 

p.s. What really took the cake was when Takky as PM claimed that he didn't speak Thai that well, since it was not his first language. Huh? All of his education from primary through secondary school, the pre-cadet academy and the police academy was conducted in standard Central Thai. But suddenly he decided he didn't speak it very well, since he was trying to worm out of something he had said.

 

 

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Thai can be written to be very precise, but I am sure the companies would seek to make things vague.

 

Well that's exactly my experience. Government contracts contain standard paragraphs which can't be changed amended except for a via very long and complex procedure that requires approval from various government agencies and ministers.

 

I did IT projects and these standard clauses often don't cover the complex rules of intellectual property rights.

 

 

 

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On the language issue, the so-called "Thai ICC rules" are simply the ICC rules translated into Thai. There is no, as TH suggested, special Thai ICC rules.

 

The problem is that on the Thai side most everyone will be far more fluent in English than the Germans will be in Thai. This is not surprising and its not about to change.

 

The bottom line is that the agreement was executed in English, so that is what governs. More contracts are executed in English than Thais because international companies have much better English capabilities than Thai. Again, not surprising and not about to change.

 

Also on complex contracts, such as power generation contracts, the forms and court interpretations, of those documents have been of English language versions. There is a body of law interpreting the English language versions of such contracts. Nothing on the Thai versions.

 

The point here is that an international companies believe, correctly IMHO, that they won't get a fair deal in a Thai court in a dispute with the Thai government. Here, the treaty addressed precisely that issue, and provides for neutral arbitration by an international body.

 

Thailand agreed to international arbitration when it signed the bilateral investment treaty with Germany. It lost, but it still refuses to pay. That is what has caused this mess.

 

Even if the airplane goes back to Thailand, Thailand's reputation for honoring its international obligations is still tarnished. One more reason not to trust the Thai government. Even if they are obliged to arbitrate in an international forum and they lose, they still won't pay their debts. This makes Thailand a risky country, and that risk has to be reflected in price. It also means that some companies will avoid Thailand altogether.

 

Other assets could be seized in the future. This is going to be an on-going headache until Thailand honors its obligations and pays the award.

 

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When I used the term Thailand ICC rules I was using the term as it used in discussing arbitration clauses in contracts which specify in which country the arbitration will take place. This can be anywhere that an ICC organization exists, can be London, Singapore, or as was my point Thailand. Indeed the rules are the same I did not say they were any different, but when referring to the location of ICC arbitration in contracts the wording [we] use is “under XXX ICC rulesâ€

 

Gaddies main point seems to be that that an ICC arbitration panel is some sort of unbiased international body, when in fact it is not. The rules are the same, but the panel itself is not by any means an “unbiased international bodyâ€. ICC arbitration is an internationally recognized process for the dispute resolution, not some magical impartial body.

 

Here is a link to a paper by AMCHAM which lists the advantages of arbitration compared to litigation.

 

Note that not one of them mentions anything about not trusting the Thai courts. All have to do with speed and simplicity. In fact, one of the advantage is listed as “Same setting as a Thai court†and says “The Thai government as a party can ensure that the arbitration proceeding will provide the same equity and fairness as in a court of lawâ€.

 

My assertion continues to be that companies in general want arbitration clauses not so much because they don’t trust the Thai courts but because in theory, arbitration is suppose to be a faster way to a settlement. If this was not true, why would they be willing to use an arbitration clause that says the proceedings will take place in Thailand? If the Thai courts are corrupt, wouldn’t a panel appointed in Thailand be subject to the same corruption as well? After all, the ICC rules are procedural only and you could still have a corrupt [Thai] member. As we all know, all Thais are part of the most corrupt culture in the world and will do anything to screw over foreigners and Gaddie has been reminding us of this for 10 years now.

 

 

Now, before Gaddie does his usual tactic of putting words in my mouth, let me say I am not defending the Thai court system. It is subject to corruption and bias just like any court system in the world with developing countries being worse then western ones.

 

My point remains; the perceived corruption of the Thai courts is not the primary reason MNC like to see arbitration clauses in their contracts in Thailand. Even if you do get arbitration in a foreign jurisdiction in a contract, to enforce that decision in Thailand you still must take it to the Thai courts. You can, of course follow the WB path and attempt to collect the decision outside Thailand.

Link

 

Now, I do agree that Thai cabinet resolution forbidding arbitration clauses in contracts with government entities or companies (as mentioned in the AMCHAM paper) is a very unfortunate and unwise step. After the first cabinet resolution in 2004 we got around that by saying the arbitration would take place in Thailand under the jurisdiction of the Thai ICC (Thai ICC rules) and that worked for a while. There was never any objection to that.

 

In 2009, this loophole was closed and no arbitration at all was allowed. This has caused us a lot of problems, both with getting our own contracts internally approved and getting other MNC to agree to it.

 

Internally, we have got agreement that we can do without the arbitration clause and in the unlikely event we have a dispute we will settle it in Thai court. Not once has the issue of the lack of impartiality the Thai courts ever been raised, the only issue raised is the long timeline for resolution.

 

We have also convinced several other MNC to go ahead and agree not insist on arbitration as well in their contracts with Thai government companies. It would still be much better if the cabinet resolution was withdrawn, but again, the unfairness or distrust of Thai courts is not the issue. It is because companies prefer arbitration to litigation in every case, regardless of location.

 

In the case of the OP and CP’s plane, not once have I said that I don’t think Thailand should pay up. I was merely pointing out the case is still ongoing with appeals pending and also the political difficulties in any government agreeing to pay. The root cause of the problem is an unfair trade treaty with Germany that the TRT signed, one of many such treaties they did, and the actions of the TRT to not raise the tolls. It politically difficult for a non-Thaksin alligned government to pay for a Thaksin caused problem. Not fair, but a polcitical fact of life.

 

Worth noting that the Nation article by Alexander Mohr that Flash posted is completely wrong. The issue is not the construction contract; in fact, during the proceedings Walter Bau (WB) admitted they made money on the construction which the tribunal ruled was irrelevant to the case. The case is about the tolls not being raised, and WB, as an “investor†in the tollway itself, not getting the expected rate of return on their equity investment due to the TRT government’s action to not raise the tolls and improving the traffic flow on Vibhavadi Rangsit Road. Again, another reason why this is a political hot potatoes.

 

I have no doubt that the Thai government will eventually pay up if they lose all their legal avenues. But they will continue to pursue all these avenues and they still have an appeal pending in NY court so this one is not over yet despite Gaddies and others thinking it is. I see they are very fast to slam the Thai’s for not writing a check for 30 million Euros right now; I wonder if they would give up so fast if it was their money? Me, I would fight tooth and nail and I would drag you through every court I coudl think of before I would pay.

 

If they lose that one and if there are no others, I expect they will quietly pay up. Can anyone show a case that they did not eventually pay up? I’m not talking about cases, such as this one, in which legal means to avoid paying are still being sought, but ones where there are no legal proceeding still going on and the Thai government has not paid.

 

I had to laugh at Gaddies statement that I am “out of your depth and, to compensate for that, you are rely on personal attacksâ€. I have personal knowledge of an ongoing arbitration proceeding taking place now between a government owned corporation and an MNC in Thailand, under Thailand ICC jurisdiction, with the proceedings in Thai. All three members of the panel are Thai nationals. As the parties could not agree on a panel chairman, he was appointed by Thailand ICC commission, the members of which are all Thai. Even more interesting is the claimant is actually the Thai court appointed Thai receiver as the Thai subsidiary of the MNC has been declared bankrupt. Not once has the foreign owner of the company mentioned he is worried about the Thai courts, even after losing his bankruptcy case.

 

How many contracts has Gaddie formed that included arbitration clauses? How many potential arbitration panel members has he interviewed? How many arbitration proceedings has he given witness statement to? How many multi million dollar disputes has he negotiated? I would guess, based on his lack of knowledge of dispute resolution and arbitration that shows in his posts on the subject the answer would be none. I have been doing this in Thailand and several other Asian countries for some 15 years now.

 

What Gaddie did here was take a complicated, longstanding legal battle and attempt to turn it into some sort of symbolic act by the Thai government that shows they do not pay foreign companies. What he perceives as personal attacks are nothing more then pointing out his lack of real knowledge and how he uses incorrect facts and biased assumptions to continue his long campaign of criticism of Thailand. A campaign that due to others agreeing with his views on Thailand is lapped up them and Gaddie is made to be some sort of Thai business and economy expert.

 

TH

 

 

 

 

 

 

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When I used the term Thailand ICC rules I was using the term as it used in discussing arbitration clauses in contracts which specify in which country the arbitration will take place. This can be anywhere that an ICC organization exists, can be London, Singapore, or as was my point Thailand. Indeed the rules are the same I did not say they were any different, but when referring to the location of ICC arbitration in contracts the wording [we] use is “under XXX ICC rulesâ€

 

Gaddies main point seems to be that that an ICC arbitration panel is some sort of unbiased international body, when in fact it is not. The rules are the same, but the panel itself is not by any means an “unbiased international bodyâ€. ICC arbitration is an internationally recognized process for the dispute resolution, not some magical impartial body.

 

Here is a link to a paper by AMCHAM which lists the advantages of arbitration compared to litigation.

 

Note that not one of them mentions anything about not trusting the Thai courts. All have to do with speed and simplicity. In fact, one of the advantage is listed as “Same setting as a Thai court†and says “The Thai government as a party can ensure that the arbitration proceeding will provide the same equity and fairness as in a court of lawâ€.

 

My assertion continues to be that companies in general want arbitration clauses not so much because they don’t trust the Thai courts but because in theory, arbitration is suppose to be a faster way to a settlement. If this was not true, why would they be willing to use an arbitration clause that says the proceedings will take place in Thailand? If the Thai courts are corrupt, wouldn’t a panel appointed in Thailand be subject to the same corruption as well? After all, the ICC rules are procedural only and you could still have a corrupt [Thai] member. As we all know, all Thais are part of the most corrupt culture in the world and will do anything to screw over foreigners and Gaddie has been reminding us of this for 10 years now.

 

 

Now, before Gaddie does his usual tactic of putting words in my mouth, let me say I am not defending the Thai court system. It is subject to corruption and bias just like any court system in the world with developing countries being worse then western ones.

 

My point remains; the perceived corruption of the Thai courts is not the primary reason MNC like to see arbitration clauses in their contracts in Thailand. Even if you do get arbitration in a foreign jurisdiction in a contract, to enforce that decision in Thailand you still must take it to the Thai courts. You can, of course follow the WB path and attempt to collect the decision outside Thailand.

Link

 

Now, I do agree that Thai cabinet resolution forbidding arbitration clauses in contracts with government entities or companies (as mentioned in the AMCHAM paper) is a very unfortunate and unwise step. After the first cabinet resolution in 2004 we got around that by saying the arbitration would take place in Thailand under the jurisdiction of the Thai ICC (Thai ICC rules) and that worked for a while. There was never any objection to that.

 

In 2009, this loophole was closed and no arbitration at all was allowed. This has caused us a lot of problems, both with getting our own contracts internally approved and getting other MNC to agree to it.

 

Internally, we have got agreement that we can do without the arbitration clause and in the unlikely event we have a dispute we will settle it in Thai court. Not once has the issue of the lack of impartiality the Thai courts ever been raised, the only issue raised is the long timeline for resolution.

 

We have also convinced several other MNC to go ahead and agree not insist on arbitration as well in their contracts with Thai government companies. It would still be much better if the cabinet resolution was withdrawn, but again, the unfairness or distrust of Thai courts is not the issue. It is because companies prefer arbitration to litigation in every case, regardless of location.

 

In the case of the OP and CP’s plane, not once have I said that I don’t think Thailand should pay up. I was merely pointing out the case is still ongoing with appeals pending and also the political difficulties in any government agreeing to pay. The root cause of the problem is an unfair trade treaty with Germany that the TRT signed, one of many such treaties they did, and the actions of the TRT to not raise the tolls. It politically difficult for a non-Thaksin alligned government to pay for a Thaksin caused problem. Not fair, but a polcitical fact of life.

 

Worth noting that the Nation article by Alexander Mohr that Flash posted is completely wrong. The issue is not the construction contract; in fact, during the proceedings Walter Bau (WB) admitted they made money on the construction which the tribunal ruled was irrelevant to the case. The case is about the tolls not being raised, and WB, as an “investor†in the tollway itself, not getting the expected rate of return on their equity investment due to the TRT government’s action to not raise the tolls and improving the traffic flow on Vibhavadi Rangsit Road. Again, another reason why this is a political hot potatoes.

 

I have no doubt that the Thai government will eventually pay up if they lose all their legal avenues. But they will continue to pursue all these avenues and they still have an appeal pending in NY court so this one is not over yet despite Gaddies and others thinking it is. I see they are very fast to slam the Thai’s for not writing a check for 30 million Euros right now; I wonder if they would give up so fast if it was their money? Me, I would fight tooth and nail and I would drag you through every court I coudl think of before I would pay.

 

If they lose that one and if there are no others, I expect they will quietly pay up. Can anyone show a case that they did not eventually pay up? I’m not talking about cases, such as this one, in which legal means to avoid paying are still being sought, but ones where there are no legal proceeding still going on and the Thai government has not paid.

 

I had to laugh at Gaddies statement that I am “out of your depth and, to compensate for that, you are rely on personal attacksâ€. I have personal knowledge of an ongoing arbitration proceeding taking place now between a government owned corporation and an MNC in Thailand, under Thailand ICC jurisdiction, with the proceedings in Thai. All three members of the panel are Thai nationals. As the parties could not agree on a panel chairman, he was appointed by Thailand ICC commission, the members of which are all Thai. Even more interesting is the claimant is actually the Thai court appointed Thai receiver as the Thai subsidiary of the MNC has been declared bankrupt. Not once has the foreign owner of the company mentioned he is worried about the Thai courts, even after losing his bankruptcy case.

 

How many contracts has Gaddie formed that included arbitration clauses? How many potential arbitration panel members has he interviewed? How many arbitration proceedings has he given witness statement to? How many multi million dollar disputes has he negotiated? I would guess, based on his lack of knowledge of dispute resolution and arbitration that shows in his posts on the subject the answer would be none. I have been doing this in Thailand and several other Asian countries for some 15 years now.

 

What Gaddie did here was take a complicated, longstanding legal battle and attempt to turn it into some sort of symbolic act by the Thai government that shows they do not pay foreign companies. What he perceives as personal attacks are nothing more then pointing out his lack of real knowledge and how he uses incorrect facts and biased assumptions to continue his long campaign of criticism of Thailand. A campaign that due to others agreeing with his views on Thailand is lapped up them and Gaddie is made to be some sort of Thai business and economy expert.

 

TH

 

 

 

 

 

 

 

Do you know why the Thai government did not pay the German construction company after it seems to have been told to do so ?

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When I used the term Thailand ICC rules....

 

The ICC headquarters are located in Dubai and I think Thailand should be following their rules' date=' not making up their own! :rolleyes::shakehead

 

PS I was not aware that Thailand played cricket? :dunno::cover: [/quote']

 

 

AHA! Told you so ... just who plays footsies with the rulers of Dubai? ;)

 

p.s. I bet Mark plays cricket. :)

 

p.p.s. I bet Thaksin plays monopoly. :p

 

 

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