Doing business across borders often brings great opportunities, but also complex legal risks. When a Thai company breaches a commercial contract or fails to perform, foreign businesses are often unsure how to protect their rights, which law applies, or how to start proceedings.
This guide explains how cross-border contract disputes in Thailand are handled, covering applicable law, Thai court jurisdiction, arbitration options, and enforcement of judgments. It is designed for foreign investors, suppliers, distributors, and service providers who need clarity before taking legal action.
At Lex Bangkok, our litigation and arbitration lawyers help international clients resolve B2B disputes with Thai companies quickly, strategically, and cost-effectively.
1. Understanding Cross-Border Contract Disputes
A cross-border contract dispute arises when at least one party is foreign and the business relationship involves Thailand. These disputes frequently involve international sale agreements, distribution contracts, licensing, joint ventures, or service contracts.
When disagreements occur, three main legal questions must be addressed:
- Which country’s law governs the contract?
- Which court or arbitration body has jurisdiction?
- How can a judgment or award be enforced in Thailand?
Foreign businesses often underestimate how different the Thai legal system is from common-law jurisdictions. Contracts written only in English, without specifying governing law or dispute resolution clauses, can create unnecessary risk.
2. Governing Law and Jurisdiction
Under the Thai Civil and Commercial Code, parties may choose the governing law and jurisdiction in their contract. If the contract is silent, Thai courts will determine whether they have jurisdiction based on the location of performance, the defendant’s residence, or the place where the damage occurred.
If a foreign company signs a contract performed in Thailand or dealing with Thai assets, the Thai court will usually accept jurisdiction. However, if the dispute is purely between foreign parties and has no link to Thailand, the court may decline to hear it.
Foreign companies should also note that Thai courts require all documents to be in Thai language. Therefore, any English-language contracts must be translated and certified before submission. This process is mandatory and can affect the timeline and cost of proceedings.
3. Litigation vs. Arbitration in Thailand
Many cross-border contracts include an arbitration clause, allowing disputes to be resolved privately rather than through Thai courts. Thailand recognizes and enforces arbitral awards under the New York Convention, making arbitration a reliable choice for international business.
Arbitration advantages include:
- Faster and more confidential proceedings
- Selection of neutral arbitrators with industry expertise
- International enforceability of awards in over 160 countries
Common institutions used for disputes involving Thai companies include the Thailand Arbitration Center (THAC), the Singapore International Arbitration Centre (SIAC), and the International Chamber of Commerce (ICC).
For cases without arbitration clauses, parties must file a lawsuit in the Civil Court or Commercial Court in Bangkok or the province where the defendant resides. A typical cross-border litigation case in Thailand can take 12 to 24 months from filing to judgment.
4. Enforcement of Foreign Judgments and Awards
Thailand does not automatically enforce foreign court judgments. If a foreign business obtains a judgment overseas, it must file a new lawsuit in Thailand using the foreign judgment as evidence. Thai judges will consider the reasoning and outcome of the foreign case, but they issue a fresh Thai judgment before enforcement.
By contrast, foreign arbitral awards can be directly recognized and enforced by Thai courts under the Arbitration Act B.E. 2545 (2002). This distinction makes arbitration especially attractive for cross-border commercial contracts.
Once a Thai court confirms the award or issues a local judgment, the Legal Execution Department can seize and auction the debtor’s assets, including real estate, vehicles, or bank accounts, until the creditor is paid in full.
5. Practical Tips for Foreign Companies
To protect your position in any future dispute:
- Always include a clear governing law and dispute resolution clause in your contracts.
- Choose arbitration under a reputable institution such as SIAC or THAC for easier cross-border enforcement.
- Translate your contract and supporting documents into Thai if you expect litigation in Thailand.
- Send a formal demand letter in Thai before starting proceedings — it shows good faith and can often lead to settlement.
- Engage a Thai law firm experienced in cross-border disputes to navigate local procedure, timelines, and evidence rules.
At Lex Bangkok, we provide end-to-end support, from contract review and pre-litigation negotiation to representation in Thai courts and international arbitration proceedings.
Why Choose Lex Bangkok
Lex Bangkok’s dispute-resolution lawyers combine international perspective with deep Thai legal expertise. We represent clients from Singapore, Hong Kong, Japan, the UAE, and Europe in high-value B2B contract disputes involving Thai companies.
Our team handles every stage, from initial demand and negotiation to litigation, arbitration, and enforcement — with clear communication and strategic planning tailored to your business goals.
Take Action Today
If your company faces a breach of contract or payment dispute with a Thai business partner, seek local legal advice immediately.
Let Lex Bangkok be your trusted partner for cross-border dispute resolution in Thailand.
Contact us today to discuss your case and explore your options.