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July 5, 2024

Global Freezing Order Guide – Thailand

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Eversheds Sutherland

In this chapter from Eversheds Sutherland’s Global Freezing Order Guide, attorneys from Tilleke & Gibbins provide answers to common questions regarding civil freezing orders and their particulars in Thailand.

1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?

Yes. The effect of a freezing order is that the respondent is prohibited from transferring or disposing of the assets referred to in the freezing order until a specified time (for example, a further hearing, a judgment or payment) or a further order of the Court. The property subject to a freezing order may include the property in dispute or the respondent’s property, including money or property owed to the respondent by a third party. Thai law is silent on the issue of whether a freezing order issued by a Thai Court could potentially apply to assets located outside of Thailand. In light of this, in practice, a Thai Court is unlikely to include assets located outside of Thailand in a freezing order. It is possible that a Thai Court could order a respondent over whom it has jurisdiction not to transfer any property or other assets located abroad, however, enforceability may be difficult, with limited consequences where the respondent refused to comply with such an order.

2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?

No. The Court does not typically place obligations on the respondent to provide disclosure of the nature, value and location of his, her or its assets, with the onus being on the applicant to provide the Court with the information available.

3. Briefly what is the relevant legal test?

The applicant has to prove that there is good cause for the complaint. The applicant must also prove that the respondent is going to willfully remove the property in dispute or all or part of their property from the Court’s jurisdiction, or is going to sell or dispose of such property for the purpose of impeding or obstructing the enforcement of any execution order which may be issued against the respondent, or for the purpose of putting the applicant at a disadvantage.

4. Briefly what is the process for obtaining a freezing (or equivalent) order?

The applicant must submit a petition to request a freezing order. The petition must include an explanation of the facts sufficient to satisfy the relevant legal test. Such a petition must be made without notice to the respondent. There will then be an ex parte witness hearing for the Court to determine whether to issue the freezing order.

5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?

Yes. The Court may order the applicant to place a security deposit with the Court as a condition of granting the freezing order.

6. Can it be sought against third parties?

Yes, if the respondent’s property has been transferred to a third party or if the property is owed to the respondent by a third party. In such cases, the freezing order will be binding on the third party as soon as they have been served with it. However, the freezing order shall not be enforced against a third party who can prove that the property that is subject to the freezing order has been transferred to them in good faith, and for consideration, prior to the notification of such order to the respondent.

7. What assets are covered by a freezing (or equivalent) order?

It can be any form of assets (i.e. movable or immovable property located within the jurisdiction).

8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?

No.

9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?

Yes. The applicant may file a petition requesting the competent Court to issue an order imposing provisional measures for the protection of their interests before or during the arbitration proceedings. If the Court is of the opinion that, had such proceedings been conducted in Court, the Court would have been able to issue such order, the Court may proceed as requested. In this case, the provisions regarding provisional measures under the Thai Civil Procedure Code (i.e. the provisions regarding freezing orders discussed elsewhere in these responses) shall also apply to a freezing order made in support of arbitration proceedings or awards.

However, where the Court issues an order allowing the applicant’s petition, if the applicant fails to pursue arbitration proceedings within 30 days from the date of the Court’s order or within any other time period as determined by the Court, the order shall be deemed to have lapsed at the expiration of such time limit.

10. At what stage of proceedings can a freezing (or equivalent) order be sought?

The applicant can submit a petition to request a freezing order at any stage of proceedings, prior to the issuance of the judgment of the Court.

11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?

As noted above, a freezing order will prohibit the respondent from transferring or disposing of the asset(s) referred to in the order. The relevant laws and regulations do not provide any specific exceptions to this general prohibition. For certain non-liquid assets, however, a freezing order applies only to the transfer of the asset; it will not prohibit the respondent from the reasonable or ordinary use of the asset, so long as that use does not damage or otherwise impair the value of the asset. For bank accounts or other liquid assets subject to a freezing order, it will be up to the discretion of the Court whether to allow the respondent to use or access those assets for living or other expenses.

12.What happens after a freezing (or equivalent) order is granted?

Once a freezing order has been granted, it can be immediately enforced against the respondent. The respondent shall be informed of such order without delay. As noted above, however, there is an exception for enforcement against a third party who can prove that the property that is subject to the freezing order has been transferred to them in good faith, and for consideration, prior to the notification of such order to the respondent.

13. Who pays the costs of the application for a freezing (or equivalent) order?

The applicant will be responsible for all of the costs for the petition for a freezing order.

14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?

(i) A third party is not prevented from exercising any rights of set-off arising prior to its notification of the freezing order.

(ii) A third party does not need to enquire as to the application of any money withdrawn by the respondent if the withdrawal appears to be permitted by the freezing order.

(iii) As regards assets outside of the jurisdiction, a freezing order does not prevent a third party from complying with (a) what it reasonably believes to be its obligations under the law of the country where the assets are located or the law of any contract between itself and the respondent or (b) any orders of the Courts of the country where the assets are located.

There is no provision in Thai law that requires applicants undertake to pay the reasonable costs of any third party which have been incurred as a result of a freezing order, or to compensate them for any loss caused by it. In this instance the aggrieved third party would have to file a separate civil claim to attempt to recover any losses.

A third party whose property is subject to a freezing order or who is likely to be adversely affected by the freezing order may file a petition to the Court requesting that the Court withdraw, revoke, or amend the order. As noted above, this petition could be based on the third party’s good-faith possession of the property. Similarly, it could also be based on the applicant’s misunderstanding or mistake regarding the ownership of the property (i.e. that the respondent is not the true owner of the property or that the third party is a proper co-owner of the property).

15. What are the consequences of breach of a freezing (or equivalent) order?

A respondent or a third party who knowingly breaches the terms of a freezing order may be imprisoned, fined, or have their assets seized.

16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?

Yes. A third party who breaches a freezing order may be imprisoned, fined, or have their assets seized.

17. Can a freezing (or equivalent) order be enforced abroad?

As noted in the response to question 1, a Thai Court is unlikely to include assets located outside of Thailand in a freezing order. The enforceability of a Thai freezing order abroad would depend on the laws in the jurisdiction in which the freezing order is to be enforced. There is, however, nothing under Thai law preventing someone from attempting to enforce a freezing order abroad.

18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?

No. A Thai Court will not recognize a freezing order issued by a foreign jurisdiction.

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