The United Nations Convention on Contracts for the International Sale of Goods 1980 (CISG, or the Vienna Sales Convention 1980) one of the Model laws of international trade was established to unify the framework of international trade. In 2022, 94 Nations ratified the CISG. In the Association of Southeast Asian Nations (ASEAN), the CISG was ratified by Singapore (1996), Viet Nam (2017) and Lao (2020).1 Thailand is pending, awaiting the outcome of the research into the ratification of the CISG.

Most decisions concerning the International trade disputes are based on UNCITRAL Model law. So, while Thailand is not a member state of CISG. What are the applicable laws to international trade disputes in Thailand between Thai and member states of CISG?

Definition of International Trade

UNCITRAL hasn’t clearly defined the definition of International trade, only mentioned that the CISG applies to  the contract of sale of goods where the places of the parties business are located in a different country regardless of nationality and non requirement of cross-abroad transportation of goods.

Also, no Thai law hasn’t clearly defined the definition of international trade. The Establishment of Intellectual Property and International Trade Court and Intellectual Property and International Trade Procedures Act B.E. 2539 (1996), Section 7 (5) which only mentioned the jurisdiction over the international trade dispute.

However, the president of the Thai Supreme Court has defined the International trade as the contract for sale of goods which is agreed by/between cross-border parties and the cross-abroad transportation of goods (Supreme Judgment No. TorKor (ทก) 23/2547).

Governing Law and Applicable Law

The disputing parties of the international commercial contract may agree to choose the governing law for arbitration. In this case, the arbitral tribunal shall decide the dispute in accordance with the governing law chosen by the parties. Any designation of law or legal system of a country shall be construed, unless otherwise expressed, as directly referring to the substantive law of the country and not to its conflict of laws rules. Thailand Arbitration Act B.E. 2545, section 34.

If the disputing parties have’t chosen the law, the case will be filed to the court of first instance and all the relevant domestic laws will be applied to the international trade dispute in Thailand. For instance, the Establishment of Intellectual Property and International Trade Court and Intellectual Property and International Trade Procedures Act B.E. 2539 (1996), International Transport Laws, Trade Competition Laws, Arrest of Ship Laws, Anti-Dumping and Countervailing Laws, Arbitration Laws.2

On top of the domestic laws the International trade law and international trade customs will be applied to the case through Section 4 of the Civil and Commercial Code which allows the Thai Court to apply general principles of law and international trade customs to the case.

Influential International Organization

The below are 3 highly influential world organizations in International trade to be considered in response to the legal practice.3

1-World Trade Organization (WTO), Generalized system of Preferences (GATT), Agreement on Trade Related-Aspect of Intellectual Property (TRIPs), these are classified as multilateral agreements. Thailand is a member state of TRIP and complicated legalization of domestic law, for instance.

2-United Nations Commission on International Trade Law (UNCITRAL). UNCITRAL model law on Electronic commerce 1996, Limitation Period in the International Sale of Goods 1974, for instance.

3-International Chamber of Commerce (ICC), INCOTERMs, Uniform customs and practices for the Documentary credits (UCP), Uniform Rules for Collection (URC), ICC Arbitration Rules and ICC Rules for Conciliation, for instance.

Conclusion

For international trade disputes in Thailand, a legal relationship between the parties, the formation of contracts, obligations and remedies of parties will be considered in response and subject to both domestic and international principles of freedom of contract, public order and good morals, bona fide and the sanctity of intent. Learn more about contract validation in Thailand.

For further information about International trade dispute or litigation in Thailand, visit INTL trade page or disputes resolutions page, or just feel free to contact us at any time.

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1 UNCITRAL Secretariat: Status of United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980)
2 Legislation: Central Intellectual Property and International Trade Court of Thailand
3 2021 Thai Bar lecture Series 1 Book 1 page 137: Suwicha Narkwatchara, Director General of the Thai Intellectual Property and International Trade Court.