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

November 27, 2015

Constitutionality of Criminal Customs Claims: Challenges in Absence of a Permanent Constitution

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Since 1932, Thailand has had 17 constitutions. During periods of non-elected regime change, usually following military coups, constitutions have been abrogated with interim charters put in place pending the approval of “permanent” constitutions.

Most recently, the 2007 charter was abolished by the National Council for Peace and Order in May 2014 and an interim document enacted shortly afterwards.

A new draft constitution was rejected recently by the National Reform Council. A second attempt to draft a charter is now under way but it is not clear if and when it will pass. While the Constitutional Court remains in existence, its ability to effectively decide issues of constitutional merit remains uncertain.

An internal letter issued by the Office of the Judiciary to the courts shortly after the abrogation of the 2007 constitution further complicates the matter. It recommended that claims challenging the constitutionality of Thai laws in the absence of a permanent constitution should be considered for dismissal.

This poses difficulties for those seeking to challenge Thai laws imposing indirect presumptions of liability on directors and officers.

Section 115 quarter  of the Thai Customs Act is one such law. It imposes a presumption of criminal liability on a company director or officer for criminal customs violations. For example, a director or officer can be presumed to have intentionally under-declared customs duties even if he or she had no involvement in customs clearance or product valuations.

Essentially, Section 115 quarter  presumes strict liability, shifting the burden of proof to the director or officer to prove his or her innocence when faced with a charge.

This conflicts with Section 39 of the 2007 constitution, which guarantees a presumption of innocence to the accused in line with previous Thai constitutions and universally recognized human rights principles.

On a number of occasions, Thailand’s strict liability provisions under the criminal law have been successfully challenged as contrary to the rights guaranteed by Section 39 of the 2007 constitution.

One such case involved a challenge to Section 54 of the Direct Sales and Direct Marketing Act B.E. 2545 (2002), in which the claimants argued that the language of the strict liability provision fundamentally ignored the right to the presumption of innocence for those criminally accused.

Ultimately, the Constitutional Court agreed with the claimants and ruled that the provision was unconstitutional and therefore unenforceable. Similar challenges have been made with respect to Section 78 of the Telecommunications Business Operation Act B.E. 2544 (2001) and Section 74 of the Copyright Act B.E. 2542 (1999).

As with many other Thai laws, Section 115 quarter  of the Thai Customs Act contains language that is identical to the language ruled unconstitutional in the case involving the challenge to Section 54 of the Direct Sales and Direct Marketing Act. Unfortunately, since many customs cases are settled or resolved before a full criminal trial is reached, Section 115 quarter  has not yet been constitutionally challenged before the court. Therefore, directors and officers continue to be charged or subjected to criminal investigations based on presumed liability.

If the standards used by the Constitutional Court in its review of Section 54 of the Direct Sales and Direct Marketing Act were applied to a review of Section 115 quarter  of the Customs Act, it is likely that Section 115 quarter  would also be ruled unconstitutional and unenforceable.

Such a ruling under the 2007 constitution would apply to all cases not already determined as final judgments by the courts of Thailand, including all pending customs claims from pre-charge investigations, through trial and appeal, presuming judgment is not yet final.

In the absence of a permanent constitution, does a viable avenue exist for a charged party to challenge Section 115 quarter  of the Customs Act or similar strict liability provisions? In theory, the Constitutional Court, following the recommendation of the Office of the Judiciary, would dismiss such a petition.

The recommendation, however, does not absolutely require the court to take such action, meaning that a challenge may be possible.

In addition, a challenge would likely incorporate arguments not limited to Section 37 of the 2007 constitution, including arguments based on universally recognized human rights such as the presumption of innocence and non-retroactivity in criminal claims, which are both accepted in the Rule of Law enacted in the interim constitution.

There is no doubt that the uncertainty caused by the absence of a permanent constitution makes constitutional challenges more difficult. However, the rights guaranteed by the 2007 constitution also confirm rights that are recognized under the Rule of Law and the interim constitution, which provides an avenue for interim challenges.

Download Full Article
Related Professionals

Practices

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

August 20, 2026
Vietnam’s Law on Bankruptcy and Rehabilitation No. 142/2025/QH15, passed by the National Assembly on December 11, 2025, does something many regional counterparts do not yet attempt: it instructs parties and arbitral tribunals on exactly what happens to an arbitration once a debtor becomes insolvent. Together with the Law on Commercial Arbitration No. 54/2010/QH12, the new law improves upon what used to be an uncertain area of practice, now providing an explicit, mandatory sequence of procedures. Suspension and Termination of Arbitration Proceedings Under article 40(2) of the law, once a Vietnamese court accepts a bankruptcy petition, any arbitration that concerns the debtor’s financial obligations must be temporarily suspended as soon as the tribunal receives the court’s notification. If the court subsequently issues a decision commencing bankruptcy proceedings, article 59(2) takes a further step: the suspended arbitration is terminated outright, and the underlying case file is transferred to the court handling the insolvency for resolution. The two provisions work as a sequence: first suspension, then termination and transfer, rather than as independent triggers. Meanwhile, article 60(4) reinforces this effect by vesting the bankruptcy court with exclusive jurisdiction over all claims against the debtor from the date the petition is accepted. Notably, this mechanism operates automatically, without the need for the insolvency court to issue a separate anti-arbitration order. The tribunal simply suspends or terminates the proceeding by operation of law once notified; however, Vietnamese law currently provides no procedure by which a party can apply to the insolvency court for permission to continue the arbitration despite the statutory effect. Practitioners with a Vietnamese counterparty in arbitration should treat notification of a bankruptcy filing as something to flag to the tribunal immediately since continuing to arbitrate a claim that has become subject to article 40(2) or 59(2) risks producing an award vulnerable
Read More
August 20, 2026
Thai law contains no provision that speaks directly to what happens to an arbitration when one of the parties becomes insolvent. The interaction between arbitration and insolvency is derived instead from the general operation of two separately drafted laws: the Bankruptcy Act B.E. 2483 (1940) and the Arbitration Act B.E. 2545 (2002). Because Thai courts have had few opportunities to interpret how these two statutes apply together, the practical answer to many questions, such as who represents an insolvent party in arbitration, whether an award will be enforced, and what happens to a foreign proceeding, depends on inference from general principles of insolvency, arbitration, and procedural law rather than on settled rules. Liquidation and Restructuring The Bankruptcy Act governs both liquidation, which winds up a debtor’s affairs, and restructuring (rehabilitation), which aims to preserve a business. The consequences for arbitration differ accordingly. In liquidation, the debtor’s assets vest in the official receiver, who alone can conduct or continue any arbitration affecting the estate; the debtor loses the authority to act on its own behalf. In restructuring, the plan preparer or administrator takes over that role, but there is more room for the debtor to remain involved, since the objective of rehabilitation is to keep the business operational. Restructuring carries an automatic stay that takes effect once the Bankruptcy Court accepts the restructuring petition. This stay can halt an arbitration regardless of where it is seated. In contrast, liquidation does not work through a stay; instead, the debtor’s loss of authority over its own assets and disputes is what constrains the arbitration. Neither proceeding provides a party a formal route to apply for permission to continue arbitrating—the Bankruptcy Act contains no such mechanism—though in restructuring cases the Bankruptcy Court may allow proceedings to continue where doing so will not prejudice
Read More
August 20, 2026
As part of its membership in Lex Mundi, Tilleke & Gibbins has released the latest edition of its Guide to Doing Business in Thailand, providing an overview of the legal, regulatory, and commercial considerations for companies establishing or expanding operations in Thailand. The 2026 edition offers practical insight into the country’s business environment, investment framework, and operational requirements. The guide covers a wide range of topics relevant to foreign and domestic investors, including: Investment incentives and promotion schemes Financial facilities and banking regulations Exchange controls and money transfers Import and export regulations Business structures and incorporation options Requirements for establishing a business Operational and compliance considerations Business cessation and insolvency procedures Employment and labor laws Taxation Immigration and visa requirements Prepared by Tilleke & Gibbins lawyers across multiple practice areas, the publication outlines key aspects of doing business in Thailand, including foreign investment restrictions, regulatory compliance obligations, corporate structures, employment requirements, and recent legal and economic developments affecting investors. The publication forms part of Lex Mundi’s Country Guides series, a global collection of jurisdiction-specific reference materials prepared by member firms around the world. Together, these guides help companies evaluate opportunities, compare regulatory environments, and plan international business activities across multiple markets. The full Guide to Doing Business in Thailand 2026 is available through the button below.
Read More
August 19, 2026
Arbitration clauses and national court jurisdiction have long existed in a delicate equilibrium, and nowhere is that equilibrium tested more often than in the drafting of multitier dispute resolution clauses. Such clauses—requiring negotiation before arbitration—are ubiquitous in international construction contracts, and they frequently employ permissive vocabulary at the arbitration tier. The formulation “either party may submit the dispute to arbitration” is intended to signal that either side is entitled to initiate proceedings. Yet it is periodically seized upon by claimants who prefer national courts, on the theory that “may” preserves a parallel right to litigate. Each apex-court pronouncement on this question is therefore significant for drafting practice and forum predictability. In 2019, the Thai Supreme Court delivered Thailand’s clearest answer to date (Judgment No. 3427/2562). Reversing an appellate court decision, the Supreme Court held that permissive wording at the point of commencement does not dilute the parties’ antecedent agreement to withdraw their disputes from the courts—doing so in regard to an International Chamber of Commerce (ICC) arbitration clause seated in Singapore, a configuration typical of foreign-invested projects in Thailand. This article examines the court’s reasoning, situates the decision within comparative jurisprudence, and draws out its practical lessons for parties and drafters operating in the Thai market. Background of the Dispute The dispute arose from a subcontract for civil engineering and architectural works concluded on September 25, 2014. Clause 19 of the subcontract governed dispute resolution. Clause 19.1 required the parties, at the request of either, to seek to resolve any dispute “in connection with, arising out of, or relating to” the subcontract through mutual consultation within sixty days of written notice. According to clause 19.2.1, if the dispute could not be resolved within that period, “either party may submit the dispute to arbitration,” to be conducted under the ICC
Read More