The Public Policy Exception to the Recognition and Enforcement of Foreign Arbitral Awards in Thailand

Abstract

In today's fast moving business world, international arbitration has been widely used as an alternative dispute resolution mechanism to litigation. Arbitration's popularity is due to the fact that the proceedings are fast, confidential, and flexible. In addition, another significant reason why people choose to arbitrate their disputes is that arbitral awards are final and binding. There is no need to spend a lot of time and money to resolve the conflict. Thus, the finality of arbitral awards is crucial. The drafters of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (known as the 'New York Convention') value the finality of arbitral awards. Therefore, the grounds to refuse the recognition and enforcement of foreign arbitral awards under art V of the Convention are exhaustive. One of the grounds is the public policy exception which has been considered as a loophole of the New York Convention. Even though the language of the Convention simply uses the term 'public policy', international organisations, judges, and scholars have made efforts to indicate that the public policy exception should be construed narrowly - namely international public policy. Although the New York Convention has a high proportion of Contracting States, this does not appear to guarantee that these Contracting States will fully comply with the Convention. The public policy exception, in particular, can be problematic as it is sometimes used in some States as a shield by the national courts to protect the enforcing States' national or local interests. Consequently, it could be argued that there are instances when the Contracting States violate the principle of finality and limited review of arbitral awards. This thesis argues that the law and practice concerning the application and interpretation of the public policy exception under the Thai Arbitration Act B.E. 2545 (2002) is problematic. In order for Thailand to fulfil its obligations and be an attractive place of investment and arbitration, reform of the Thailand's arbitration law in relation to the application of the public policy exception is required.