The Shipping Law Review: Thailand

Commercial overview of the shipping industry

In 2019, the value of the export and import trade in Thailand was around US$450 billion,2 most of which was conducted through the carriage of goods by sea. Thailand has around 150 commercial ports3 and 1,973 cargo ships4 listed on the whitelist. The shipping industry plays a very important role in Thailand's economy. At the end of 2021, the Thai government announced a plan to establish a 'National Maritime Navigation Line' to enhance the carriage of goods by sea for Thai vessels and to boost export businesses in Thailand. The Thai government focuses on promoting and enhancing the shipping industry in Thailand.

General overview of the legislative framework

Thailand is a civil law jurisdiction whereby laws are enacted by Parliament and regulations are issued by an administrative agency deriving authority from the legislature.5 Precedents set by the Supreme Court's judgments are not officially recognised in the same manner as those of common law countries. However, certain precedents are formally published and can be referenced as guidelines for the construction of the provisions of applicable laws.6

Provisions of treaties or international conventions to which Thailand is a party are not legally enforceable in court actions until such treaties are enacted as domestic legislation. As of 9 February 2022, the maritime conventions that Thailand has ratified include:7

  1. the Convention on the International Maritime Organization (IMO), 1948;
  2. the International Convention for the Safety of Life at Sea (SOLAS), 1974;
  3. the International Convention on Load Lines (LL), 1966;
  4. the International Convention on Tonnage Measurement of Ships (TONNAGE), 1969;
  5. the Convention on the International Regulations for Preventing Collisions at Sea (COLREG), 1972;
  6. the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), 1978 as amended 1995;
  7. the Convention on the International Maritime Satellite Organization (IMASAT), 1976;
  8. the Convention on Facilitation of International Maritime Traffic (FAL), 1965;
  9. the International Convention for the Prevention of Pollution from Ships (MARPOL), 1973 as modified by the Protocol of 1978;
  10. the International Convention on Civil Liability for Oil Pollution Damage (CLC), 1992;
  11. the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (FUND), 1992;
  12. the International Convention on Salvage (SALVAGE), 1989;
  13. the International Convention on Oil Pollution Preparedness, Response and Co-operation (OPRC), 1990; and
  14. the Maritime Labour Convention (MLC), 2006.

For several of the other areas of maritime law in which international conventions are not ratified, including carriage of goods, arrest of ships and civil liability arising from collisions, Thai legislation partly resembles the relevant international conventions or a mixture of local regulation and international conventions. Notably, Thailand does not have domestic legislation for some aspects of maritime law, such as tonnage or global limitations, even though long-established rules apply worldwide by virtue of the Convention on Limitation of Liability for Maritime Claims (LLMC), 1976, and its Protocol of 1996. Thus, Thailand is, in some respects, a haven for maritime catastrophe claims that can involve large claim amounts.

Forum and jurisdiction

i Courts

Forums and procedure

The majority of shipping claims are heard in a specialist court, namely the Central Intellectual Property and International Trade (CIPIT) Court, where a panel consisting of an ordinary and lay judge who has specific knowledge in the maritime industry oversees the proceedings. The proceedings are generally governed by the Civil Procedure Code (CPC) with some specific overriding rules prescribed in the Act for the Establishment of and Procedure for Intellectual Property and International Trade Court, B.E. 2539 (1996). Appeals against judgments rendered by the CIPIT Court can be filed with the Court of Appeals for Specialized Cases and the Supreme Court.

Claims that are outside the jurisdiction of the CIPIT Court, such as claims on breach of contract of domestic carriage of goods by sea, claims on marine insurance covering domestic carriage of goods by sea or tort claims arising from collision where both parties are not seagoing vessels, are heard in ordinary courts of justice.8 Appeals on judgments of these courts can be filed with the Court of Appeal and the Supreme Court.

Choice of law

Where there is a conflict of law and the Conflict of Laws Act BE 2481 (1938) (CLA) directs to foreign law, the court will apply a foreign country's substantive law in place of domestic laws, which is presented by the parties and proven that such law is not contrary to the public order or good morals of Thailand.9 However, some specific legislation, such as the Carriage of Goods by Sea Act BE 2534 (1991) (COGSA), prohibits the application of foreign laws in certain circumstances, namely, where one party in the dispute is of Thai nationality or is a juristic person established under the laws of Thailand.10 Notably, marine insurance policies are not governed by Thai substantive law. This is because standard clauses in marine insurance policies usually provide for English law and practice.11 Even in the absence of an English law clause, the Supreme Court will still apply English law as a general principle of law for marine insurance claims.12

Prescription and limitation periods

General limitation periods for maritime claims are listed below. Each time limitation has details and exceptions that need to be further construed:

  1. cargo claims under the contract of carriage of goods by sea: one year from the date of delivery;13
  2. cargo claims under the multimodal transport: nine months from the date of delivery;14
  3. sea passenger claims: 10 years from the date of incident;15
  4. collision claims:
    • if one party is a seagoing vessel, two years from the date of incident;16 and
    • if no party is a seagoing vessel, one year from the date on which the tort and tortfeasor became known but not exceeding 10 years from the date of the incident;17
  5. salvage claims: two years from the date on which the salvage operation finishes;18
  6. general average claims:
    • claimed by the shipowner, one year from the date the amount of general average contribution is advised to the contributor but not exceeding five years from the date of general average act; and
    • claimed by other party, one year from the date the amount of general average contribution is advised to the contributor but not exceeding seven years from the date of general average act;19
  7. oil pollution from ship claims: three years from the date on which the damage appears but not exceeding six years from the first date of incident;20 and
  8. ordinary tort claims: one year from the date on which the tort and the tortfeasor became known but not exceeding 10 years from the date of incident.21

Notably, the limitation periods in (a) and (b) above are extendable with agreement between the parties under certain conditions set out by the law. Although the periods are not extendable with agreement, limitation periods may be interrupted by provisions of the law in some circumstances.

ii Arbitration and ADR

Validity of arbitration clauses

It is normal that a charter party or bill of lading (or both) contains an arbitration clause of which part of it prescribes arbitration in London and other foreign forums. However, Thai courts seem to be relatively conservative on validation and application of arbitration clauses. The Thai court has decided that, in several cases, the arbitration clauses were not lawfully applicable. For disputes that solely involve a bill of lading and not a charter party, there are many rulings that hold the arbitration clause invalid because the consignee did not sign either the bill of lading or another form of standard terms and conditions that contains an arbitration clause, as required by the Arbitration Act B.E. 2545 (2002) (AA).22 Interestingly, where the charterer and shipowner properly signed a charter party that contains the arbitration clause, the court has ruled that the arbitration clause did not bind a cargo insurer who had subrogated the charterer's rights (and the cargo insurer was the plaintiff in this case). The rationale given by the court is that the third party would be bound by the arbitration clause in the charter party only in the circumstance that the rights under the charter party are transferred from the charterer to a third party by way of assignment of rights, namely, by virtue of a juristic act, pursuant to a provision of the AA.23 However, where the rights are transferred by way of subrogation, namely a legal act, as in this case, the insurer would not be bound by the arbitration clause. The claims must therefore be filed with the competent court.24

Arbitration institutions and procedures

There are no specific maritime arbitration institutes or procedures in Thailand. The following arbitration institutes in Thailand hear maritime disputes:

  1. the Thai Arbitration Institute (for ordinary maritime disputes);
  2. the Arbitration Institute of the Office of Insurance Commission (for disputes between an insured and insurer under a contract for marine insurance); and
  3. the Arbitration Institute of the Thai General Insurance Association (most non-life insurance companies in Thailand have entered into compulsory arbitration agreements in which disputes on recourse claims between insurance companies will be submitted to this institute).

All institutes have their own specific procedural rules but are still under the umbrella of the AA.

Mediation

Generally, where the claim is submitted to the court, the court will try to mediate both parties to have the disputes settled amicably before a trial, or as soon as possible. In addition to court-supervised mediation, out-of-court mediation is also available. Out-of-court mediation will generally not be automatically recognised or be enforceable by Thai courts. When a party fails to comply with any of the obligations set forth in an out-of-court settlement agreement, the non-defaulting party must file a lawsuit with the competent court for a judgment to enforce the performance of the obligations under the settlement agreement.

At the end of 2020, the CPC was amended making it possible for disputing parties to request court-supervised mediation without having to start litigation proceedings with the court. After the court receives a request made by a party's motion for mediation, the court will seek the other party's consent to commence mediation. If the mediation process leads to an amicable settlement, a compromise agreement may be drafted and endorsed by a judgment. Such judgment is enforceable in the same manner as a court judgment rendered through litigation. There are no court fees for the mediation process.25

iii Enforcement of foreign judgments and arbitral awards

Judgments

Presently, a judgment rendered by a court of a foreign country is not automatically enforceable in Thailand. At best, the foreign court judgment serves as persuasive evidence during litigation in a Thai court on the same claim.

Arbitral awards

Thailand is a contracting state of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (the New York Convention). As such, an arbitral award rendered in a foreign country that is a contracting state of the New York Convention will be recognised for enforcement by Thai courts. The AA provides that an arbitral award rendered in any country is binding on the parties concerned, and that enforcement can be sought in Thai courts. The AA does not only give ratification to the New York Convention; an arbitral award rendered in a foreign country that is not a contracting state to the New York Convention can also be enforced in accordance with international treaties and agreements to which Thailand is a party.26

Shipping contracts

i Shipbuilding

Thailand is not a key player in the global shipbuilding industry. The shipbuilding activity in Thailand mainly involves the building of small to middle-sized or special purpose ships. As a result, there are neither specific laws nor standard forms for contract in this respect.

If a ship is built in a foreign country and the buyer is a Thai entity, it is likely that the shipbuilding contract will be governed by foreign law as agreed to by the parties in a standard form widely used in that jurisdiction. Where the shipbuilding contract is governed by Thai law, the Civil and Commercial Code (CCC) will play a crucial role in imposing rights and obligations on the parties. However, the parties have the freedom to agree to deviate from the default law and this agreed term will be held enforceable in so far as the law in this respect does not relate to public order or good morals.27

ii Contracts of carriage

Key legislation, rules and conventions

Thailand is not a contracting state to the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, 1924 (the Hague Rules), the Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 1968 (the Hague-Visby Rules), the United Nations Convention on the Carriage of Goods by Sea, 1978 (the Hamburg Rules) and the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, 2009 (Rotterdam Rules). However, in certain situations, such rules may still be applicable through the 'paramount clause' in a bill of lading or a charter party.

Contracts for international carriage of goods by sea are usually governed by COGSA, which is said to be a combination of the Hague-Visby Rules and Hamburg Rules with some variations. COGSA applies to the international carriage of goods by sea where the port of loading is in Thailand and a port of discharge is in a foreign country and vice versa.28 However, COGSA provides that it does not apply to any type of charter party. This is because the parties to a charter party contract, which are supposed to be firm business entities, have equal power of negotiation. Therefore, the law intends to leave the parties to an agreement to decide their own rights and obligations under the principle of freedom of contract without state intervention by means of the legislation. Nevertheless, if a bill of lading is issued under a charter party, and it is transferred to a consignee who is not one of the original parties to the charter party contract, the relationship between the carrier and the consignee will be governed by COGSA.29

An agreement to invoke foreign law or convention to govern the contract of carriage of goods by sea (not including a charter party) will be void if one party to the contract has Thai nationality or is an entity established under Thai law. Where the parties do not have Thai nationality and are not an entity established under Thai law, the agreement will be valid and enforceable.

For the domestic carriage of goods by sea or river, the contract will usually be governed by the CCC, which has considerable differences to COGSA. Notably, the parties to a domestic carriage of goods can agree to apply COGSA to their contract as an applicable law.30

Main duties

The main duties of the carrier under COGSA are as follows:

  1. to exercise due diligence to ensure seaworthiness of a vessel;31
  2. handle the cargo with proper care;32
  3. issue a bill of lading as requested by the shipper;33
  4. proceed with reasonable dispatch;34 and
  5. deliver the cargo to the holder of the bill of lading after it is surrendered to the carrier.35

The shipper's main duties are as follows:

  1. to mark and label dangerous cargo as listed in the International Maritime Dangerous Goods Code (IMDG);
  2. to declare such dangerous characteristics to the contractual or actual carrier (or both) upon handing over the cargo to them;36 and
  3. make a payment for the freight.37

The person who is obliged to make a payment for the freight, namely, the shipper or consignee, and is due for the payment depends on the applicable trade terms, such as INCOTERMS, in the sale of goods contract and the agreement between the shipper and the carrier.

Unlike the Hague-Visby Rules, liability of the carrier under COGSA for loss of or damage to cargo is not restricted to 'tackle to tackle'. The liability still attaches in so far as the cargo is in the custody of the carrier38 as in the Hamburg Rules. Unlike the Hamburg Rules, COGSA contains a long list of the exclusions of liability for the carrier, some of which are the same as the Hague-Visby Rules. Details of cargo claims, including relevant common terms in a bill of lading, will be further discussed below.

Liens

In connection with the carriage of goods, where the freight is not duly paid to the carrier, the carrier is entitled to exercise a possessory lien on the cargo and detain it until the freight is paid or the shipper or consignee provides adequate security.39 Thailand has no specific laws on the lien on sub-freights and sub-hires under a charter party, and as a consequence, general provisions of the CCC will be applicable. If the time charter does not pay the hire to the shipowner (or disponent shipowner), the shipowner may exercise a lien on sub-hire or sub-freight, provided that the terms in this respect are properly drafted in the charter party and a written notice is properly served40 on the subcharterer who is responsible for paying the sub-hire or sub-freight.

Multimodal transport

Multimodal transport is governed by the Multimodal Transport Act BE 2548 (2005) (the MTA). The main duties under the MTA are relatively similar to COGSA with some variations, such as claims against the actual carrier, exclusion of liability, limits of liability, time limitations or prescription periods, and agreement on choice of forum. An issue that is usually misunderstood by foreign and Thai lawyers is how the MTA operates when the loss can be specifically localised as occurring during sea, land or air transport that may involve a specific piece of the legislation, namely, COGSA, the CCC, the International Carriage of Goods by Roads Act BE 2556 (2013) (ICOGRA) and the International Carriage by Air Act BE 2558 (2015) (ICAA). There is no issue where the loss or damage cannot be localised because there is no doubt that the MTA will govern the dispute in question. However, where the loss or damage can be localised, it does not mean that the MTA will be completely substituted by the legislation for a specific leg of transport. In such cases, the MTA still predominantly governs the dispute in question and specific legislation will be merely invoked for the issue of limit of liability.41 In other words, the MTA still plays the predominant role in determining most of the issues, such as the liable party, exclusion of liability, limitation or prescription period and choice of forum, except the limit of liability.

iii Cargo claims

Cargo claims make up around 70 per cent of maritime disputes in Thailand.

Title to sue

The CPC provides a very broad prescription on the title to sue, which reads 'where there is a dispute involving the rights or duties of any person under the civil law, …, that person must submit the case to the court …',42 and there is no specific provision under COGSA to deal with this issue. Where there is no transfer of risks during transit, for example where company A ships its own cargo from country X to Thailand, the cargo owner who is also the shipper and consignee will have title to sue the carrier for loss.

Most cargo claims involve an underlying contract of international sale of goods, which unavoidably entails transfer of risks during transit. In theory, the person who has title to sue should be the person who suffers loss, and is the person who bears the risks at the time of loss. To determine who, between the seller and buyer, holds the risks at the time of loss, it is necessary to look at the trade term, such as INCOTERMS, to which the parties to the contract of sale agree. For instance, if they agree on free on board (FOB) and the loss takes place before the cargo is shipped on board the vessel at the port of loading, the seller is the person who suffers loss and has title to sue. If the loss takes place during the sea voyage after the cargo has been shipped on board, the buyer is the person who suffers loss and has title to sue. Nevertheless, in practice, the court may not strictly follow this approach. There is a case where the FOB seller was held entitled to sue even where the loss occurred after the cargo had been shipped on board the vessel. In that case, the facts show that the seller had sent new cargo in substitution of the damaged cargo to the buyer.

Another point to note is a situation where a cargo insurer indemnifies the cargo owner. In this case, the title to sue will pass on to the subrogated insurer. This is different to the approach in some jurisdictions where the cargo owner still has title to sue and the subrogated insurer merely has controlling power.

Who can be sued?

COGSA provides that a cargo interest is entitled to sue both a contractual and actual carrier for the part of the carriage for which they are responsible, or that they actually handled.43 Conversely, the MTA differs slightly: the cargo interest is entitled to sue only the multimodal transport operator, namely, the contractual carrier, under the MTA,44 but the title to sue against the actual carrier will be determined by tort law under the CCC. However, the actual carrier under a multimodal transport arrangement can avail itself with immunities, such as, exclusion of liability, limit of liability and limitation or prescription period as prescribed in the MTA.

An action in rem is not recognised under Thai law, and this sometimes results in difficulty in considering who can be sued. There is no doubt that the carrier can be sued, but the problem is who is the carrier. Identification of the carrier is easy in cases of liner trade where a name of the carrier is clearly specified in the bill of lading. However, it often becomes difficult in claims for bulk cargo carried under a charter party, in which the bill of lading is usually signed 'on behalf of the master of vessel X' without stating the name of the carrier. In this circumstance, it is essential to further examine the sub- and head- charter party to identify whether the shipowner or charterer has the power on navigational control of the vessel, which depends on type of charter party involved in each particular shipment.

Exclusions of liability

A long list of exclusions of liability in COGSA and the MTA are similar to the Hague-Visby Rules. The notable difference is that COGSA merely provides an exclusion for errors in navigation resulting from a deficiency in any act performed in the duty or in accordance with the pilot's instructions,45 while the MTA provides a much broader exclusion in relation to the fault in navigation, that is, a wilful act, negligence or error in navigation or in ship management whether committed by the master, mariner or pilot of the carrier's employee.46 Therefore, it is significantly easier for the multimodal transport operator to escape from liability when compared to a carrier under COGSA.

Himalaya clause and covenant not to sue

The Himalaya clause in a bill of lading that provides employees, crew, stevedores, terminal operators, actual carriers and other independent subcontractors, among others, with exclusions and limits of liability in line with the contractual carrier should be held valid in so far as the standards are not lower than the standards set out in COGSA47 and the MTA.48 However, a covenant not to sue is unlikely to be valid, as it leads to standards lower than those in COGSA and the MTA.

Limitation or prescription periods

The limitation or prescription period for claims for loss of, damage to or delay of cargo is one year under COGSA49 and nine months under the MTA.50 Agreements on extension of the limitation or prescription period are allowed under both regimes with some conditions.51

iv Limitation of liability

Thailand is not the contracting state of the LLMC and does not have domestic legislation on tonnage or global limitation; only package limitations under COGSA, the MTA and other legislation on the carriage of goods are available. Consequently, claimants are likely to benefit from this regime if the claim arising from a huge catastrophe is heard by a Thai court under Thai law. This has been proven where two claimants made different decisions on forum shopping. The first claimant, who decided to apply to the limitation funds and proceedings in a foreign country in which the LLMC applies, was eventually awarded 10 per cent of the claimed amount, while the second claimant who decided to file a lawsuit in a Thai court was awarded nearly 100 per cent of the claimed amount.

Remedies

i Ship arrest

Grounds

Grounds for ship arrest are prescribed in the Arrest of Ships Act, BE 2534 (1991) (the ASA). In brief, this covers claims for loss of life, personal injury or property damage due to the operation of a ship, salvage, a contract relating to use or hire of a ship or other similar contracts, including a charter party, a contract of carriage of goods by sea under a bill of lading, general average, damage to cargo, towage and pilotage, supply of any materials to a ship, shipbuilding, repair or shipyard fees, port charges and dues, stevedoring, master's or crew's wages, ship expenses, ownership of the ship, and disputes between co-owners and ship mortgages.52

Notably, not every claimant who has a maritime claim is entitled to arrest a ship in Thailand; only the claimant who has his or her domicile in Thailand is entitled to do so.53

Procedures

A claimant is required to apply for a ship arrest to the CIPIT Court with prima facie evidence on the grounds for the arrest; a deed of a lawyer appointment signed by an authorised representative of the claimant is required to be submitted together with an application. The Court will then hold an ex parte witness examination. If the Court is satisfied with the evidence, it will grant the arrest and a warrant of arrest of a ship will be issued on condition that the claimant has deposited counter security as specified in the court's order. A claimant must then bring the warrant of arrest to the relevant legal execution office and request the executing officer to lead and proceed on to the target ship to serve the warrant of arrest. Where the ship is not at berth, the claimant and executing officer may use any means to get on to the ship. This may be carried out by boat or even helicopter provided that the ship is in territorial waters. This process will take around two to three days after the lawyer has obtained all the required documents from the claimant. The ship may be rearrested by other parties who also have sufficient grounds.

Sister and associated ships

The ASA allows for the arrest of a sister ship with certain conditions and provided that the debtor was the owner, demise charterer or in possession of the sister ship at the time when the cause of action arose and at the time of the application for arrest.54 Unlike in some jurisdictions, Thailand does not have appropriate measures to deal with single ship companies. The concept of piercing the corporate veil or beneficial ownership (or both) is not currently recognised in Thailand; therefore, arrest of an associated ship would be unlikely to be successful in Thailand.

Security and counter security

Generally, the CIPIT Court will require security from the shipowner (for release of the vessel) and counter security from the claimant (for issuing the warrant of arrest) in the form of cash or a cashier cheque. Other forms of security might also be possible subject to judicial discretion.

Wrongful arrest

The test for wrongful arrest is not well established in Thailand. There is no doubt that mala fides constitutes a wrongful arrest. However, it is still uncertain as to what degree of negligence will amount to a wrongful arrest.

Bunker arrest

The ASA does not contain any provisions that entitle a claimant to arrest a bunker. Nevertheless, the claimant may request the court to seize a bunker under the CPC, which has different requirements and is more difficult.

Requirements on pursuing substantive claims

An arrested ship or security in lieu may be released if the claimant does not commence legal proceedings for the substantive claim within 30 days from the date on which the warrant of arrest is served on board the ship.55 However, in circumstances where the claimant does not wish to file a lawsuit for the substantive claim within 30 days, but is still interested in getting some form of security, the claimant may negotiate with the shipowner, out-of-court, requesting a bank guarantee or letter of understanding with some discounts as an incentive. The claimant may then request the court to release the ship after the security is provided directly to it.

ii Court orders for the sale of a vessel

Thailand does not have a specific law on the judicial sale of a vessel. The proceedings will be governed by the CPC in the same manner as a sale in execution for other kinds of property.

Regulation

i Safety

Thailand is a signatory of SOLAS, the COLREGs, the Load Lines Convention and the STCW Convention. These conventions have been implemented in the Navigation in Thai Waters Act, BE 2456 (1913), Prevention of Collision of Ships Act, BE 2522 (1979) and bylaws. The IMDG Code is well recognised by Thai authorities and the court as a manual on identification and the handling dangerous cargo.

The Marine Department is the key authority responsible for maritime safety. The Marine Department has its main mission to support and develop water transportation and maritime activities to meet international standards as well as to implement related laws on navigation in Thai territorial waters.

ii Port state control

Thailand has entered into Memorandum of Understanding on Port State Control in the Asia-Pacific Region (Tokyo MOU), implementation of which is in the Navigation in Thai Waters Act, BE 2456 (1913) and bylaws. These provide the authorities with a wide range of powers, including the power to detain foreign vessels that are below standard. Nevertheless, there is a proposal to amend the laws in this respect for more clarity and efficiency.

The main authority for port state control in Thailand is the Marine Department.

iii Registration and classification

Registration

To be registered as a Thai vessel, the shipowner must fulfil the following criteria:

  1. a natural person of Thai nationality;
  2. an ordinary partnership having all partners who are natural persons of Thai nationality;
  3. a state enterprise under Thai law; or
  4. a juristic person under Thai law with specific conditions.

Thai-flagged vessels can enjoy the benefits under the Thai Revenue Code and are eligible to carry goods for Thai Government. Registration is to be applied for, and considered by, the Marine Department under the Thai Vessel Act BE 2481 (1938).

Classification

The classification societies that are recognised by the Marine Department must fulfil the following conditions:

  1. meet the standards of the Code for Recognized Organization of IMO;
  2. be a full member of the International Association of Classification Societies (IACS); and
  3. has its office and has, at least, one exclusive surveyor stationed in Thailand.

A classification society that fulfils the above criteria can submit an application to the Marine Department to be recognised for inspecting vessels and issuing certificates on behalf of the Marine Department.

iv Environmental regulations

Thailand is a signatory of MARPOL and OPRC. These conventions have been implemented in the Navigation in Thai Waters Act, BE 2456 (1913) and bylaws.

Regarding the compensation arising from oil pollution caused by ships, Thailand is a member state of CLC and FUND. The local legislations that implement the aforementioned conventions are the Civil Liability for Oil Pollution Damage Caused by Ships Act BE 2560 (2017) and the Requirement of Contributions to The International Fund for Compensation for Oil Pollution Damage Caused by Ships Act BE 2560 (2017).

The Marine Department, Pollution Control Department and Royal Thai Navy are the key authorities that are responsible for the marine oil pollution.

v Collisions, salvages, and wrecks

Collisions

Thailand is a signatory of the COLREGs, which has been implemented in the Prevention of Collision of Ships Act, BE 2522 (1979) and its Ministerial Regulations.

Regarding liability arising from a collision, even though Thailand is not a member state of the Convention for the Unification of Certain Rules of Law with respect to Collisions between Vessels, 1910, Thai local law, the Civil Liability and Damages Arising from Collision of Vessels Act, BE 2548 (2005) is similar to the Convention for the Unification of Certain Rules of Law but with additional details on calculations of damages. The Civil Liability and Damages Arising from Collision of Vessels Act only applies with collisions where at least one party is a seagoing ship.

Salvages and wreck removals

Thailand is a signatory of the SALVAGE, which has been implemented in the Marine Salvage Act, BE 2550 (2007). There are no domestic standard agreements for salvage operations; therefore, the industry tends to use tailor-made agreements for insignificant operations and the Lloyd's Open Form for significant ones.

The Marine Department is the key authority that has power to monitor and control salvage and wreck removal operations.

vi Passengers' rights

Thailand has not ratified the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea, 1974. In addition, Thailand has no specific legislation concerning the carriage of passengers by sea. Passengers' rights are provided under the general law of carriage under Sections 634–639 of the CCC. The main concept is that the carrier of passengers is liable to passengers for personal injuries and for damages resulting from delays suffered by reason of transportation, unless the injury or delay is caused by force majeure or by the fault of the passenger.56

vii Seafarers' rights

The MLC was ratified in Thailand in June 2017 and is reflected in the Maritime Labour Act BC 2558 (2015), which was enacted to enhance and set minimum standards for Thai maritime labour to be in line with international standards. The Maritime Labour Act requires a shipowner to provide employees with good working conditions and good welfare (e.g., living accommodation, food and limitations of working hours). The shipowner also has duties to provide medical care on board to ensure the health and safety of all employees on the vessel.

Outlook

There have been attempts to draft a local law for marine insurance over the course of nearly 20 years, without success. However, a bill on marine insurance, which is mainly based on English law, is currently under review by the Council of State. Factoring in delays due to covid-19, it is expected that this bill will be enacted in a couple of years.

The Ministry of Transport plans to launch a national shipping line, the 'National Maritime Navigation Line', in 2022 or 2023. For business flexibility, it will be run as a private company with the government owning 49 per cent through the Port Authority of Thailand. It is believed that a national shipping line would make Thailand more competitive by helping to boost Thai exports and by reducing shipping costs.57

In 2021, the Court of Appeal for Specialized Cases delivered a judgment on a landmark piracy case. This case involved a cargo claim against a shipowner under a time charter party for a tanker vessel of which the cargo, gasoline, was hijacked by pirates in the Singapore Straits while the vessel was en route from Malaysia to Thailand.58 This piracy case was reported to the IMO59 and the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP).60 The plaintiff claimed that the vessel did not apply the necessary preventive measures to prevent piracy even though it was known that there was a high risk of piracy for that route, that is, the vessel was unseaworthy. The defendant argued that the loss was attributable to force majeure and piracy, which both fall under an exclusion of liability. It was found, inter alia, by the court that the vessel failed to appropriately arrange for a lookout, and as a result the shipowner was held liable in full.

Footnotes

1 Nathee Silacharoen is a partner, Ittirote Klinboon is counsel, and Rawi Meckvichai and Chonlawat Rojanaparpal are senior associates at Chandler MHM Limited.

4 Information as of February 2022: https://whitelist.md.go.th/ship.

6 Waree Shinsirikul, Nathee Silacharoen, Rawi Meckvichai and Soidara Budnean, Chandler MHM Limited, Doing Business in Thailand, 3rd Edition, https://www.chandlermhm.com/content/files/pdf/publications/Doing%20Business%20in%20Thailand%20(Third%20Edition%20Book).pdf.

8 Waree Shinsirikul, Nathee Silacharoen, Rawi Meckvichai and Soidara Budnean, Chandler MHM Limited, Doing Business in Thailand, 3rd Edition, https://www.chandlermhm.com/content/files/pdf/publications/Doing%20Business%20in%20Thailand%20(Third%20Edition%20Book).pdf.

9 Sections 5, 8, 13 and 15 of the Conflict of Laws Act BE 2481 (1938).

10 Section 4 of COGSA.

11 Ittirote Klinboon and Rawi Meckvichai, First-step analysis: bringing insurance litigation proceedings in Thailand, https://www.lexology.com/library/detail.aspx?g=c73598c8-e060-4f69-b0c9-95972b6a615f.

12 Supreme Court's Judgments No. 999/2496 and No. 7350/2537.

13 Sections 46 and 47 of COGSA.

14 Section 38 of the MTA.

15 Section 193/30 of the CCC.

16 Section 21 of the Civil Liability Arising from Collision BE 2548 (2005).

17 Section 448 of the CCC.

18 Section 31 of the MSA.

19 Section 21 of the Contribution in General Average Loss from Maritime Adventures Act BE 2547 (AD 2004).

20 Section 33 of the Civil Liability for Oil Pollution Damage Caused by Ships Act BE 2560 (AD 2017) and Section 28 of the Requirement of Contributions to The International Fund for Compensation for Oil Pollution Damage Caused by Ships Act BE 2560 (AD 2017).

21 Section 448 of the CCC.

22 Section 11 of the Arbitration Act.

23 ibid., Section 13.

24 Court's Order in the Case No. IT 251/2561.

25 Waree Shinsirikul, Nathee Silacharoen, Rawi Meckvichai and Soidara Budnean, Chandler MHM Limited, Doing Business in Thailand, 3rd Edition, https://www.chandlermhm.com/content/files/pdf/publications/Doing%20Business%20in%20Thailand%20(Third%20Edition%20Book).pdf.

26 id.

27 Section 151 of the CCC.

28 Section 4 of COGSA.

29 ibid., Section 5.

30 ibid., Section 4.

31 ibid., Section 8.

32 ibid., Section 10.

33 ibid., Section 12.

34 ibid., Section 39.

35 ibid., Section 28.

36 ibid., Section 33.

37 ibid., Section 14.

38 Section 39 of COGSA.

39 ibid., Section 15.

40 Section 306 of the CCC.

41 Section 31 and 37 of the MTA.

42 Section 55 of the CPC.

43 Section 43s and 44 of COGSA.

44 Section 20 of the MTA.

45 Section 52 (12) of COGSA.

46 Section 27 (7) (a) of the MTA.

47 Section 17 of COGSA.

48 Section 8 of the MTA.

49 Section 46 of COGSA.

50 Section 38 of the MTA.

51 Section 47 of COGSA and Section 38 of the MTA.

52 Section 3 of the ASA.

53 Section 4 of the ASA.

54 Sections 4 to 6 of the ASA.

55 Sections 23 and 27 of the ASA.

56 Section 634 of the CCC.

58 Court of Appeal for Specialized Cases, Judgment No. 25/2564.

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