Thai Business Law

[Explorer]

Hi,

I got some questions here, hope you can help -

Situation

A foreign company contracted a Thai company for a project in Thailand. 50% - 50% payment basis before and after the project being completed was the agreement.

The project went through with alot of hiccups on the Thai company side, thus not satisfying the foreign company level of expectations on the outcome for the entire project. This would include not meeting the agreed deadline and product produced was not as exactly agreed upon.

After the project ends, foreign company demanded a compensation as Thai company failure in the project, the Thai company agrees and a certain compensation was given.

Now, on second thought, the foreign company decided not to pay the balance 50% as the Thai company failure in the project.

Question 1: Can the foreign company do such thing as the Thai company failed to meet their expectations for the project?

Question 2 : What can the Thai company do in terms of Thai Business Law in getting the payment from the company that is based oversea and has no branch in Thailand?

Thanks

Explorer

[smilingjim]

Hi,

I got some questions here, hope you can help -

Situation

A foreign company contracted a Thai company for a project in Thailand. 50% - 50% payment basis before and after the project being completed was the agreement.

The project went through with alot of hiccups on the Thai company side, thus not satisfying the foreign company level of expectations on the outcome for the entire project. This would include not meeting the agreed deadline and product produced was not as exactly agreed upon.

After the project ends, foreign company demanded a compensation as Thai company failure in the project, the Thai company agrees and a certain compensation was given.

Now, on second thought, the foreign company decided not to pay the balance 50% as the Thai company failure in the project.

Question 1: Can the foreign company do such thing as the Thai company failed to meet their expectations for the project?

Question 2 : What can the Thai company do in terms of Thai Business Law in getting the payment from the company that is based oversea and has no branch in Thailand?

Thanks

Explorer

I'll leave the Thai business law side of it to Sunbelt and other Thai specialists but from my earlier experiences what action you can take is based on the actual contract agreement. I think you'll need to give full details of the contract to get accurate advice.

Is it written under Thai law or the legal jurisdiction of the foreign Company? I've been involved in UK/Thai agreements and always had it written under UK law, with recourse to UK courts if anything went wring.

[Sunbelt Asia]

Hi,

I got some questions here, hope you can help -

Situation

A foreign company contracted a Thai company for a project in Thailand. 50% - 50% payment basis before and after the project being completed was the agreement.

The project went through with alot of hiccups on the Thai company side, thus not satisfying the foreign company level of expectations on the outcome for the entire project. This would include not meeting the agreed deadline and product produced was not as exactly agreed upon.

After the project ends, foreign company demanded a compensation as Thai company failure in the project, the Thai company agrees and a certain compensation was given.

Now, on second thought, the foreign company decided not to pay the balance 50% as the Thai company failure in the project.

Question 1: Can the foreign company do such thing as the Thai company failed to meet their expectations for the project?

Question 2 : What can the Thai company do in terms of Thai Business Law in getting the payment from the company that is based oversea and has no branch in Thailand?

Thanks

Explorer

Need to review the partnership agreement to give you the best answer.

www.sunbeltasiagroup.com

[andy1308]

My company is in a similar situation in that we have an agreement with a US company, and that agreement specifically says it is governed by US law - even though a Thai company is involved. So, in our situation, any recourse if ever needed would be through the US courts.

I hope this helps in some small way.

[laxman1960]

My company is in a similar situation in that we have an agreement with a US company, and that agreement specifically says it is governed by US law - even though a Thai company is involved. So, in our situation, any recourse if ever needed would be through the US courts.

I hope this helps in some small way.

From previous experience here I was told that no matter what if the contract involved a Thai company it would be under Thai law, irrespective of what was stated in the contract. Not sure if it is true but that is the advice I had been given in the past.

The reality for the Thai company is they will have a tough time collecting if the foreign company has no operations here and no assets here. If they have to through US courts to get their money it would be a long and expensive process in my opinion.

Dan

[andy1308]

Interesting - I was under that impression too (the contract would be made under Thai law as a Thai company is involved) but the contract says in is formed exclusively under New York (American) law.