Administrative Court Orders SRT to Pay Over 4.2 Billion Baht in Red Line Dispute

[Georgealbert]

 

Picture courtesy of Matichon.

 

Thailand’s Central Administrative Court has this week, ruled that the State Railway of Thailand (SRT) must comply with an arbitration award and pay over 4.2 billion baht, plus interest, to two private construction firms involved in the Red Line suburban railway project.

 

The decision follows a long-running dispute over additional work costs (Variation Orders) incurred during the construction of the Red Line’s Bang Sue–Rangsit section. The court ordered the SRT to make full payment to Uniq Engineering and Construction Public Company Limited and Sino-Thai Engineering and Construction Public Company Limited within 60 days from the finalisation of the case.

 

The case dates back to an arbitration ruling issued on 21 November 2022, under Case No. 79/2565, which found the SRT liable for outstanding payments related to contract No. กส.01/รฟฟ./2556, signed on 18 January 2013. The ruling required the SRT to pay:

 

1. Principal compensation of 4,204,286,694.83 baht for construction works and variation orders, plus VAT of 23,654,882.90 baht.

 

2. Interest on delayed payments at an annual rate of 7.305%, amounting to 929,211,622.11 baht as of 23 July 2022, with additional interest accruing from 22 July 2022 until full payment is made.

 

3. Late payment interest on a withheld retention amount of 180,651,350.64 baht, totalling 34,904,693.43 baht.

 

4. Compensation for expenses incurred during project extensions, totalling 680,057,076 baht plus VAT and interest.

 

5. Price-adjusted contract work compensation of 96,044,682.13 baht plus VAT and interest.

 

The SRT initially contested the arbitration decision, claiming it violated public order and morality. However, the Central Administrative Court, in its verdict dated 30 April 2024, rejected the argument, ruling that the arbitration decision was within the contractual scope and not in breach of public norms.

 

The SRT’s appeal to the Supreme Administrative Court was subsequently dismissed on 2 October 2024, rendering the arbitration ruling legally binding and final.

 

With the court affirming the legality of the arbitration process and decision, the SRT is now compelled to fulfil its financial obligations under the terms of the ruling. Failure to do so within the 60-day deadline may result in further legal enforcement actions.

 

This verdict underscores the growing accountability of state enterprises in large-scale infrastructure projects, particularly regarding contractual compliance and fair compensation for private sector contractors.

 

-- 2025-04-13