As part of the Chamber’s efforts in clarifying laws and regulations in connection with the COVID-19 pandemic, we have asked Tilleke & Gibbins, a Corporate Member of the Thai-Norwegian Chamber of Commerce to clarify which laws are applicable in the unfortunate event of companies having to declare bankrupices.
The 1997 Asian financial crisis had crippled many Asian economies in its wake, but it had also left behind it a lasting legacy to the economies that it ravaged. Faced with sharp economic slowdown and a wave of corporate defaults, Thailand revamped its banking and financial institutions including various legal infrastructures. For one, it made a major amendment to its antiquated bankruptcy laws to allow for corporate restructuring similar to the United States’ Chapter 11. The amendment, which took the form of an additional section on Corporate Reorganisation under Chapter 3/1, took effect in 1998. Over the years, various revisions have been made to fine-tune its provisions and principles.
The Thai Bankruptcy System: Bankruptcy Court
The inclusion of reorganisation proceedings in the 1998 Amendments necessitated specially trained judges with an understanding of the process and appropriate knowledge of business practices. As a result, the Establishment of Bankruptcy Court and Procedure for Bankruptcy Cases Act was enacted in 1999. Following such enactment, a specialised court, known simply as the Central Bankruptcy Court, began operations on June 18, 1999. The Court has jurisdiction over all bankruptcy cases, as well as all civil matters pertaining to bankruptcy cases. More recently, the Central Bankruptcy Court was given jurisdiction over criminal matters pertaining to bankruptcy as well.
Prior to the 1999 Act, any civil court in Thailand could hear bankruptcy cases. However, all bankruptcy cases are now required to be heard by bankruptcy court judges. Thus, filing bankruptcy petitions with other courts is no longer allowed.
The Bankruptcy Courts are divided into the Central Bankruptcy Court and the Regional Bankruptcy Courts. The Central Bankruptcy Court has jurisdiction throughout the Bangkok Metropolitan Area, but all bankruptcy cases which occur outside such jurisdiction may be filed with the Central Bankruptcy Court. However, the Central Bankruptcy Court may, at its discretion, refuse to try any such cases. Regional Bankruptcy Courts may be established under Acts which stipulate the respective jurisdictions and locations of such Courts.
To read the full 11-page summary, please click on the below link.
The measures above reflect current laws, but changes may occur as the under the current COVID-19 pandemic. We will continue to update you of any such changes as this situation develops.
For more information on the impact of COVID-19 on corporate legal matters, please contact Chusert Supasitthumrong on [email protected].