You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

October 9, 2019

PTIT Focus: Settlement of Disputes through Arbitration in a Thai Concession Agreement

Subscribe to Updates
Petroleum Institute of Thailand: PTIT Focus

With reference to the concession agreement form, as issued under the Ministerial Regulations of the Ministry of Energy regarding the Form for the Designation of a Concession Agreement B.E. 2555 (2012) (“Ministerial Regulations re: the Concession Agreement Form”), the form includes a provision that is related to dispute resolution by arbitration, as set out in Clause 13 of the Concession Agreement.

The principle here applies to scenarios in which (1) a dispute arises in connection with the Minister’s instructions, which requires the concessionaire to rectify a circumstance that constitutes grounds for revocation of the Concession under Section 52 of the Petroleum Act B.E. 2514 (1971), or (2) a dispute exists in respect to the question of whether or not there has been full compliance with the provisions of the Concession, and the parties cannot reach a mutual settlement within 60 days from the date on which one party issued a notice to the other party. In such a scenario, both parties shall settle the dispute through arbitration in accordance with the Arbitration Rules as prescribed by the United Nations Commission on International Trade Law (“UNCITRAL Arbitration Rules”). The version of the UNCITRAL Arbitration Rules to be used is the version that is valid on the date the dispute was submitted to the arbitrators.

This principle differs from the previous Concession Agreement Form that was issued under Ministerial Regulation no.4 (B.E. 2514) (1971) and Ministerial Regulation no.7 (B.E. 2532) (1989). This stipulated use of the arbitration rules of the International Court of Justice (“ICJ Arbitration Rules”), which still bind the parties that entered into such concession agreement.

Settlement of a dispute through arbitration is a type of dispute resolution whereby the parties can mutually agree to have a third party, which could either be a sole arbitrator or a group of arbitrators who have specific knowledge and expertise about the disputed issue, act as the person(s) who will consider and decide on the civil dispute that has arisen. Settlement of disputes through arbitration has many advantages, such as (1) offering a convenient and fast process; (2) having few complicated steps involved; and (3) enabling decision-making by persons with specific expertise. In addition, arbitration proceedings remain confidential, and therefore, business information and the reputation of the parties are still maintained. Furthermore, arbitration awards are also enforceable in many countries.

In respect to the award rendered by the arbitrators, the Ministerial Regulations also specify conditions in the Concession Agreement Form that require the arbitrators to take into account the laws of Thailand, and the principles of international laws that may be applicable, and also determine whether the expenses and fees of the arbitrators shall be borne solely by either party or shared proportionately by both parties. The award has to be rendered in writing and specify the reasons for the decision. The award shall be final and binding on both parties.

With reference to the Concession Agreement Form, the place of arbitration shall be in Bangkok, Thailand, unless the parties agree otherwise. The language used in the arbitration procedures shall be in Thai, except where both parties mutually agree to use English.

In addition, the Concession Agreement Form also designates those matters that shall not be referred to arbitrators, which are as follows: (1) criminal offences under the Petroleum Act B.E. 2514 (1971); (2) disputes in connection with the Petroleum Act B.E. 2514 (1971) where the concessionaire has initiated proceedings in a Thai court; and (3) disputes on rulings, or orders, which are treated as final under the Petroleum Act B.E. 2514 (1971).

In conclusion, the clause relating to dispute settlement through arbitration in the Concession Agreement Form designates the rules, form, process, place, and language to be used in the proceedings for the purpose of clarity in the dispute resolution. Arbitration procedures also provide advantages that can help expedite dispute settlements, reduce complicated procedures, and experts to issue awards on the disputes in question. In addition, the arbitration proceedings also serve to maintain full confidentiality regarding the business information of the parties involved.

 

This article first appeared in the April 2019 edition of PTIT Focus, the Petroleum Institute of Thailand’s monthly newsletter. The article was published in both English and Thai. For the original publication, please see the PDF below.

Download Full Article
Related Professionals

Industries

Energy

Practices

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

May 25, 2026
After several years of policy discussion and continued efforts led by the Ministry of Commerce (MOC) to relax the list of reserved businesses under the Foreign Business Act B.E. 2542 (1999) (FBA), the reform process has now reached a significant milestone. On May 12, 2026, the Thai cabinet approved in principle two draft subordinate legislative instruments aimed at delisting certain reserved business activities under the FBA and reducing licensing requirements for foreign business operators. These developments signal a renewed and concrete effort by the government to modernize Thailand’s business regulatory framework in order to attract foreign investment and boost Thailand’s competitiveness in the global market. Nine Businesses Set for FBA Delisting Below is a list of the nine businesses that are being targeted for delisting from the FBA’s restrictions. A draft ministerial regulation would delist the first eight reserved businesses, while a royal decree has been drafted to delist the ninth business: Telecommunications services (Type 1 license only, covering operators without their own telecommunications infrastructure), under the supervision of the Office of the National Broadcasting and Telecommunications Commission. Treasury center services subject to the Foreign Exchange Control Act B.E. 2485 and under the supervision of the Bank of Thailand. Securities-collateralized lending, pursuant to the laws governing securities and exchange and derivatives regulated by the Securities and Exchange Commission. Agency, dealer, advisory, or fund management services relating to derivatives where the underlying assets fall outside the scope of the Derivatives Act B.E. 2546 (2003) Intra-group shared services, including administrative, human resources, and IT functions Intra-group domestic debt guarantee services Leasing of partial space for installation of financial service machines and automatic vending machines for employee use Petroleum drilling services Trading of agricultural product derivatives through a futures exchange, with physical delivery or receipt of agricultural products at a futures exchange–designated
Read More
February 10, 2026
Data center and cloud investments are forming a major focus of private-sector investment in Thailand, with tech giants like Amazon, Google, Microsoft, and TikTok, as well as numerous telecom and data center companies, committing significant outlays to data center and cloud development. The country’s Board of Investment (BOI) approved projects worth THB 1.87 trillion in 2025, and THB 746 billion of this was from planned data center investments—by far the largest amount from any single industry. Thailand’s swift rise as a regional data center hub is fueled by surging demand for cloud, AI, and digital services, as well as large-scale investments from global tech firms. The country’s strategic location, competitive power costs, robust fiber infrastructure, expanding IT talent, and supportive government policies—including BOI incentives and streamlined approvals—have made it an attractive destination for scalable and sustainable digital infrastructure investments. The BOI’s proactive approach in updating promoted categories and providing both tax and non-tax incentives further ensures Thailand’s continued growth in this sector. 2025 BOI Changes for Data Centers In the middle of 2025, the BOI responded to the remarkable trend by updating investment‑promotion categories across various sectors (e.g., machinery and electrical equipment, public utilities, digital and innovative industries) to accommodate growing investment in data‑center projects. Before the change, which was detailed in a notification that has applied to investment promotion applications submitted from July 1, 2025, onward, data‑center projects under BOI promotion were granted a single A1 incentive (an eight‑year corporate income‑tax exemption) and subject to one uniform set of conditions. The July 2025 notification restructured promotion for data centers into two categories based on power‑usage efficiency: high‑efficiency data centers and other data centers. Under these rules, qualified high‑efficiency data centers are eligible for an eight‑year corporate income tax (CIT) exemption, while for other data centers this exemption is
Read More
November 21, 2025
On November 17, 2025, Thailand’s Ministry of Interior introduced significant regulatory changes to make rooftop solar adoption easier and more cost-effective for property owners. Ministerial Regulation No. 72 B.E. 2568 (2025), issued under the Building Control Act B.E. 2522 (1979), was published in the Government Gazette on November 19, 2025, with immediate effect. Background Under the Building Control Act (BCA), any alteration made to a building requires either notification of the relevant authority or application for a building alteration permit—unless the alteration falls under a separate list of exceptions specified in the ministerial regulations issued under the BCA. In 2015, installation of solar rooftops on any residential building under 160 square meters was added to this list of exceptions, subject to inspection and notification requirements. The newly enacted regulation now eliminates many of these requirements and introduces a broader and more permissive framework to promote solar adoption nationwide. Key Changes Specifically, the regulation introduces three major changes: Expanded exemption from the definition of “building alteration”: The installation of solar panels on any building roof—regardless of the type of building or the total area of the installation—is no longer considered a building alteration under the BCA, provided that the total weight of the installation does not exceed 20 kg/m2. Removal of structural integrity certification requirement: The new regulation eliminates the obligation to obtain a structural stability certificate from a licensed civil engineer. Removal of notification requirement: Property owners or possessors are no longer required to notify the local authority before installation of a solar rooftop. Impact This significant streamlining of requirements for solar rooftop installation is expected to accelerate the adoption of renewable energy in the country, particularly for residential and commercial properties—similar to the way Thailand’s December 2024 removal of licensing requirements for factory solar rooftop installations encouraged such
Read More
September 25, 2025
Tilleke & Gibbins’ labor and employment team in Hanoi and Ho Chi Minh City has contributed the Vietnam chapter to Labor and Employment Disputes 2026. Drawing on the expertise of three of the firm’s employment specialists, the chapter provides practical guidance for navigating employment disputes in Vietnam and covers: Pre-action considerations: key requirements, third-party funding, contingency fee arrangements Issuing a claim: forum, territorial jurisdiction, standing, commencing claims, fees, service, defendants and legal personality, types of claims, time limits, counterclaims Case management: procedure, rules, amendments to claims, adding parties, consolidating proceedings, class and collective actions, evidence, witnesses, tactical considerations Interim relief: availability, requirements Trial: hearings conduct and time frames, confidentiality and public access, media reporting, elements of successful claims and burden of proof Alternative dispute resolution: available types, requirements and expectations, enforcement Collective employment and labor rights: enforcement and standing Remedies and enforcement: available remedies, assessing compensation, enforcement mechanisms Appeals: procedure, time frames, other means of challenge Updates and trends: recent cases and developments, technology developments, other issues The Vietnam chapter is available for download below. Tilleke & Gibbins also contributed the Cambodia and Thailand chapters to Labor and Employment Disputes 2026. Readers can also gain 30 days of complementary access to the full Labor and Employment Disputes 2026 guide and the rest of Lexology Panoramic’s varied offerings through this link.
Read More