What goes wrong in contracts with a Thai partner?

Key Takeaways

• A Singapore court judgment cannot be enforced in Thailand. There is no treaty and no procedure for it. You would have to sue again, from scratch, in a Thai court under Thai law, with your Singapore judgment admitted only as evidence.¹²³ A foreign arbitral award does not have this problem. That is the single most important design decision in a Thai contract.
• The common claim that “the Thai version of a bilingual contract always wins” is an overstatement of the actual law. The Thai text only governs by default when the two versions conflict and the parties’ intent cannot otherwise be shown.⁴ Write a clause that states which language governs and this stops being a risk you are exposed to by default.
• An unstamped or under-stamped contract is not admissible as evidence in a Thai civil lawsuit. This is a mechanical, checkable step, and this guide can state it with full confidence.⁵
• Choice of law, jurisdiction clauses, and how long a Thai commercial case actually takes remain genuinely open questions. This chapter reports what is unsettled rather than inventing an answer, and it names, plainly, the payment-risk data this guide does not have.

In Detail

Why this sits with the partner chapter, not on its own

Nobody searching for help with Thailand asks “how does dispute resolution work” as a standalone question. It shows up as a worry inside questions about Thai partners: what happens if this goes wrong, can I actually get my money back, will I be stuck arguing in a language and a court I do not understand. So this chapter answers both together. Part one is the contract you sign going in. Part two is what the contract is actually worth if the relationship breaks down.

Part one: the contract

A Singapore owner reviewing a Thai counterparty’s draft is usually looking for the same things they would check at home: price, scope, termination, liability caps. Two things in a Thailand contract do not have a Singapore equivalent and are easy to miss for exactly that reason.

Which language actually governs

Section 14 of the Civil and Commercial Code reads: “Whenever a document is executed in two versions, one in the Thai language, the other in another language, and there are discrepancies between the two versions, and it cannot be ascertained which version was intended to govern, the document executed in the Thai language shall govern.”⁴

Practitioner guidance and incorporation-agent blogs routinely shorten this to “the Thai version always wins.” That is an overstatement of what the section actually says. Section 14 is a tie-breaker of last resort. It only applies when both conditions are met: the two texts conflict, and the parties’ intended controlling version cannot be established some other way.⁴ A contract that says plainly which language prevails on conflict sits outside the section entirely, because the parties’ intent is no longer ambiguous. This is the single highest-value correction in this chapter: you are not stuck with the Thai text winning by default. You can put a prevailing-language clause in the contract and make that choice yourself.

Do both things, not one instead of the other. Put an explicit prevailing-language clause in the contract. And still have the Thai-language version independently translated and checked clause by clause, by someone your counterparty did not choose, before you sign. A clause naming English as controlling does not help you if you never find out the Thai text said something different, because a dispute is the wrong time to discover that for the first time.

Stamp duty and why an unsigned technicality can sink a real case

This part of the contract question we can answer directly. Thailand’s stamp duty schedule covers 28 categories of instrument.⁵ A hire-of-work or service agreement is stamped at 0.1 percent of the contract value. A loan agreement is stamped at 0.1 percent, calculated as THB 1 per THB 2,000 of the loan amount, capped at THB 10,000 per instrument. Duty is generally payable within 30 days of execution, or of the document’s first arrival or use in Thailand if it was signed abroad.⁵

The consequence of skipping this is not a fine you pay later and move on from. An unstamped, or insufficiently stamped, instrument is not admissible as evidence in a Thai civil lawsuit. The surcharge for curing it after the fact is reported in the range of 200 to 600 percent of the duty owed.⁵ Read plainly: a contract you cannot put in front of a judge is not a contract, it is a piece of paper you are hoping the other side honours voluntarily. selling in without an entity covers stamp duty in more detail for anyone selling into Thailand without a local entity. Here the point is narrower: whatever you sign with a Thai partner, stamp it, on time, and keep the proof.

Governing law, jurisdiction, and payment terms

A Singapore-drafted template will usually default to Singapore law and the Singapore courts, or to SIAC arbitration, because that is what the lawyer who wrote the template knows. Whether a Thai court will actually respect that default is a genuinely mixed question, and this guide is not going to flatten it into a clean answer it does not have.

On governing law, Thai courts can in principle apply foreign law: the Conflict of Laws Act lets the law governing a contract follow the parties’ intention. In practice this is limited. The foreign law has to be proved to the court with a certified copy and a Thai translation, often with expert testimony, and the court will not apply it where doing so conflicts with Thai “public order and good morals,” a standard interpreted broadly.⁶ On jurisdiction, the picture is reported as more restrictive still: a clause that tries to give a foreign court exclusive jurisdiction, shutting Thai courts out entirely, is commonly said to be void where the defendant is domiciled in Thailand or the cause of action arose there. We could only find law-firm commentary on this point, most recently from 2015, and did not independently check it against the Code of Civil Procedure text itself, so treat it as plausible rather than confirmed.⁶

Neither of those two clauses is the reliable lever. The reliable lever, covered in Part two below, is arbitration.

On payment terms, Thailand does not have a hard statutory cap set by Act of Parliament. What it has is a Trade Competition Commission notification, under the Trade Competition Act B.E. 2560 (2017), effective 16 December 2021, setting a benchmark credit term of no more than 45 days for general trade, manufacturing, and services sold by an SME to a larger buyer, and no more than 30 days for agricultural or simply-processed agricultural products. Parties can contractually agree a longer term if they can point to reasonable commercial, marketing, or economic grounds.⁷⁸ Most secondary commentary calls this a “cap.” That overstates it. It is a fair-trade-practices guideline that constrains how a large buyer treats an SME seller, with a documented override available, not an absolute ceiling on what any contract can specify.

What this guide cannot give you is payment-risk data to size the decision by. We looked for Thailand-specific figures from Coface and Allianz Trade, the two names most often cited for country credit risk. Coface’s live country-risk page reportedly shows letter grades for Thailand, but two direct attempts to fetch that page failed to independently confirm them, so we are not going to repeat a rating we could not verify ourselves. Neither Coface’s nor Allianz Trade’s published pages carried a Thailand-specific figure for days sales outstanding or payment-default rates, only global and Asia-region numbers. If a payment-risk figure for Thailand specifically matters to your decision, treat it as unanswered by this guide, not as quietly covered.

Part two: when it goes wrong

The single most important thing in this chapter is this: a Singapore court judgment cannot be enforced in Thailand. Thailand has no exequatur procedure and no treaty, bilateral or multilateral, with Singapore for recognising a foreign judgment. If your Thai partner does not pay after a Singapore court rules against them, that judgment does not, on its own, get you paid. You would have to bring a fresh lawsuit in a Thai court, plead and prove the underlying claim under Thai law, and the Thai court may admit your Singapore judgment only as evidence, with full discretion to re-examine the facts and the law from the start. Three independent sources, including a page maintained by a regional judiciary-affiliated body, agree on this conclusion.¹²³

There is no general Thai statute governing this. The rule rests on Supreme Court case law setting three conditions for a foreign judgment to be admitted as evidence at all: it must be final, it must come from a court with proper subject-matter jurisdiction, and it must not contravene Thai public order or good morals.¹ We are naming the rule and not a case number on purpose. The sources that report this rule cite different Supreme Court decisions for it, and those citations do not agree with each other. Cite the principle to your own lawyer, and have them confirm the current leading case, rather than repeating a case number from this guide or any other secondary source.

Arbitration does not have this problem. Thailand acceded to the 1958 New York Convention on 21 December 1959, and the Convention entered into force for Thailand on 20 March 1960, with no reservations.⁹ Thailand implements it through the Arbitration Act B.E. 2545 (2002), as amended in 2019, modelled on the UNCITRAL Model Law. A qualifying foreign arbitral award is enforced under Sections 41 and 43 of that Act, which incorporate the Convention’s own grounds for refusal.⁹ In practice this means a foreign arbitral award can be recognised and enforced by a Thai court on petition, without re-litigating the merits of the dispute from scratch. That is a materially different, faster, and more predictable path than the fresh-lawsuit route a foreign court judgment requires.³ The petition must be filed within three years of the award, with certified copies and Thai translations, and a Thai court can refuse enforcement only on narrow grounds mirroring the Convention: an invalid arbitration agreement, lack of due process or proper notice, an award that exceeds the arbitration agreement’s scope, an improperly composed tribunal, a subject matter that cannot be arbitrated, or a conflict with Thai public policy.³

Set those two facts side by side and the practical direction is clear. A bare choice of Singapore courts, or a bare Singapore-law-and-jurisdiction clause, leaves you needing to re-litigate the whole dispute inside Thailand if it ever matters. A contract naming a recognised arbitration institution and rules gives you a route that a Thai court will enforce directly, with the other side unable to relitigate the merits. This is worth far more in a Thailand contract than the equivalent clause would be worth in a Singapore-to-Singapore one, because in a purely domestic contract you were never going to face this enforcement gap in the first place.

The concern as it actually shows up

In the demand research behind this guide, the worry about a Thai partnership going wrong surfaced repeatedly as a single cluster: the prospect of a dispute, proceedings conducted in a language the foreign party does not speak, and a timeline nobody can predict in advance. Two of those three concerns can now be answered directly. All Thai court proceedings are conducted in Thai. Pleadings must be filed in Thai, and any foreign-language document you submit as evidence, including a translated contract or a foreign judgment, needs a certified Thai translation.¹⁰ Litigating in Thailand as a foreign party genuinely does mean litigating through a translation layer, at every stage.

The timeline is the one part of this cluster we cannot answer with a number, and we are not going to invent one. No published judiciary statistics on commercial-case timelines were found in this research. Practitioner commentary describes first-instance civil and commercial litigation as commonly running roughly 12 to 24 months to judgment, longer with an appeal, with COVID-era cases reportedly taking 3 to 5 years in some instances. A Judicial Regulation on case-adjudication timeframes has been in effect since 24 January 2023 and is said to set target periods by case type, but we have not read that regulation’s text directly, only commentary describing it. Treat the 12 to 24 month figure as a practitioner estimate, not an official statistic, and ask your own lawyer for a current read before you rely on any number for planning.

What this means for you

Get the mechanical part right yourself: a properly stamped contract, with an explicit clause saying which language governs, a Thai text you have had independently checked, and a payment term you chose deliberately rather than inherited from a template. None of that requires a specialist and this guide can stand behind all of it.

Get a Thai-qualified lawyer to do two things before you sign. First, draft an arbitration clause that names a specific institution and rules, because that clause is what actually gets you paid if the relationship fails, in a way a bare choice-of-court clause does not. Second, have them give you a straight answer on whether a governing-law or jurisdiction clause in your specific draft would survive a Thai court’s public-order override, since this guide has shown you the shape of that question but not a clean answer to it. keeping control covers the control mechanisms that reduce how often you need any of this. choosing an adviser covers how to find the lawyer who can answer it properly.

Before you sign a contract with a Thai partner

• Does the contract state, in its own words, which language version prevails if the Thai and English texts disagree, rather than leaving it to Civil and Commercial Code Section 14 by default?
• Has the Thai-language version been independently translated and checked clause by clause, by someone your counterparty did not choose?
• Will this instrument be stamped within 30 days, and who is responsible for making sure it happens?
• Does the contract name a specific arbitration institution and rules, rather than a bare choice of Singapore courts you may not be able to enforce inside Thailand?
• If the draft still relies on a governing-law or foreign-jurisdiction clause instead, has your lawyer confirmed it would actually hold up in a Thai court, rather than assuming it would?
• Is the credit term you have agreed a deliberate choice, and if it runs longer than the 45-day TCCT benchmark, can you point to the commercial reason for that if it is ever questioned?

Sources

10 sources for this article, 2 of them primary. Where we could not verify something, the article says so rather than estimating.

1. Council of ASEAN Chief Justices, cacj-ajp.org
2. CMS, cms.law
3. Tilleke & Gibbins, www.tilleke.com
4. FAO FAOLEX (primary), faolex.fao.org
5. PwC Worldwide Tax Summaries, taxsummaries.pwc.com
6. Tilleke & Gibbins, www.tilleke.com
7. DFDL, www.dfdl.com
8. LawPlus, www.lawplusltd.com
9. New York Arbitration Convention (primary), www.newyorkconvention.org
10. Tilleke & Gibbins, www.tilleke.com

This article is general information about doing business in Thailand and is not legal, tax, or financial advice. Every figure is cited with its source and its date. Thai regulation is changing quickly and rules current at publication may change without notice. Confirm anything you intend to act on with qualified Thai counsel.