Guest Column: Effects of the COVID-19 Outbreak on Creditors and Debtors

Effects of the COVID-19 Outbreak on Creditors’ Exercise of their Rights and Debtors’ Payment of Debts, and Legal Measures for the Prevention and Control of the Spread of the Pandemic

Due to the outbreak of COVID-19, government agencies have set out and implemented necessary measures to prevent and control the spread of the virus. The severity of the situation and these legal measures could affect creditors’ exercise of their rights and debtors’ performance of their obligations. My observations about the status of the rights and obligations of creditors and debtors during the ongoing outbreak of the COVID-19 are as follows:

Although no one knows how long this pandemic will last, it is certain that it will eventually end. It is therefore certain that the relationships between creditors and debtors continue to exist, unless it is agreed otherwise. Debtors are still obliged to pay their debts, while creditors are still entitled to demand payments. In most cases, debtors cannot use a disease outbreak as an excuse to refuse a debt payment. This is because a disease outbreak is temporary and therefore when the situation returns to normal, debtors will have to resume their performance of obligations, obligations which continued to exist throughout and despite the existence of the outbreak.

However, while creditors’ rights and debtors’ obligations remain intact, the public health crisis has resulted in the implementation of legal measures that restrict movement and business activities, prohibiting many people in Bangkok and other large cities from living normal lives. Such legal measures, such as government-mandated closures or a general societal lockdown, affect debtors’ performance of their obligations and exercise of their rights. If an illness or quarantine resulting from the pandemic or a legal measure implemented by the government does not allow a debtor to perform its obligation as scheduled, it is possible that such debtor may not yet be in default. This is because the current situation could be considered a temporary circumstance, of no fault of the debtor, which prevents performance of an obligation, according to Section 205 of the Civil and Commercial Code. Hence, the debtor may not be liable to the creditor for damages incurred from the late performance of the obligation. For example, if a debtor agrees to produce goods for a creditor but said production can only be performed at the debtor’s factory which is located in a lockdown zone, and it is impossible for the debtor to move production from the factory to another location, then if the debtor is late in the delivery of goods, the debtor is not legally liable for the delay and the creditor is obligated to accept the late delivery.

In the case of debts, generally the law considers that a debtor can always pay a debt, even during a disaster or economic crisis, because money is always available in an economic system. In other words, a disaster or economic crisis does not make it impossible to pay a debt. According to Supreme Court Judgments, a debtor’s inability to pay a debt due to not having enough money in itself is not an event that temporarily prevents the performance of an obligation under Section 205. However, if the debtor’s business is closed because of a law or a government order, making the debtor unable to pay the debt as scheduled, this could be considered an event that temporarily prevents the performance of the obligation, which may be raised by a debtor as an excuse for default. (See Supreme Court Judgment No. 16469/2557.) In short, a debtor’s inability to pay a debt caused by a temporary event such as the current COVID-19 outbreak, might exempt the debtor from being in default for payment of either the principal amount or interest. Hence, the debtor may not be liable for default interest or damages. However, for how long a debtor can be exempted under Section 205 depends on the overall outbreak situation and the debtor’s financial status.

Closure of several private places, such as department stores and markets, is a necessary measure to contain the spread of COVID-19. However, the closures cause business operators to lose income and makes them unable to pay rentals. In this case, the lessees will not be legally obligated to pay rentals to the lessors, because the situation had rendered it impossible for the lessors to perform their duty of enabling the lessees to use the leased space pursuant to their lease agreements. Because the lessors are unable to perform their duty, the lessees are, in turn, not obligated to pay rentals in exchange. This is based on the principle of bilateral agreements under Section 369 of the Civil and Commercial Code. This applies even though it is agreed in the lease agreement that the lessee is obligated to pay rentals although the lessee cannot use the leased space, because this contractual clause may become unenforceable or enforceable only to the extent that it is fair, pursuant to Section 4 of the Unfair Contract Terms Act. In cases where it is considered that a lease agreement is made between a business operator and a consumer, or is a standard agreement, which is not governed by the Unfair Contract Terms Act, it is my opinion that this clause should become void because it is contrary to public order and morality, under Section 150 of the Civil and Commercial Code. Once the situation returns to normal and the lessees are able to use the leased space, the lessees will be obligated to make full rental payments according to their lease agreements. (Rental payments are exempted only during the time when the lessees are unable to use the leased space.)

Regarding agreements for services, such as hotel reservation, air transportation, etc., if the service providers are unable to perform their obligations under the agreements because, for example, their places of business are ordered to be closed, making it impossible to provide services normally, the customers should not be obliged to pay charges for the services that cannot be delivered, based on the principle of bilateral agreements. If service charges are paid in advance, the service charges should be returned, or the customers should be allowed to use the services later (e.g. in the case of hotel reservations). If a customer wants to cancel a hotel reservation or is unable to stay at the accommodation because he is infected with COVID-19 or because he is concerned about exposure to COVID-19, although this is the customer’s viewpoint and it is not that the place of business is ordered to be closed or the service provider is not ready to provide the service, the customer should be able to raise the change of circumstances as an excuse for non-performance of his contractual obligation. This is because at the time when the debtor and creditor enter into the agreement, both parties intended to perform their contractual obligations under normal circumstances. This current situation is not under normal circumstances, and is unprecedented and unexpected. Although the principle in this regard under Thai law is not as clear as foreign law, the principle of bona fides broadly prescribed in Section 5 and Section 368 of the Civil and Commercial Code provides sufficient legal grounds for non-performance of obligations by customers in the above situations.

Whether a debtor can successfully argue late or non-payment according to the above legal provisions will be subsequently judged by the court. One certain thing is the economy will impact creditors’ exercise of their rights and debtors’ performance of their obligations to some degree. As such, creditors and debtors may negotiate to loosen certain contractual obligations and defer payments until a future agreed time (e.g. after this crisis ends). For the reasons stated above, strict enforcement of debts at this time may be counterproductive. Debtors may become bankrupt and the creditors would be unable to gain anything from the debtors. Formal legal proceedings also require a lot of money and take years before they become final.

August 11, 2026

Cambodia Launches Online Platform for Forced-Sale Auction Notices

Cambodia’s Ministry of Justice has launched a new platform on its official website to publish notices of forced sales issued by each municipal and provincial court of first instance. The platform’s stated purpose is to inform the public and facilitate greater participation in forced-sale auctions conducted in connection with court-ordered enforcement proceedings. How the Platform Works The platform publishes forced-sale notices from courts of first instance across Cambodia’s municipalities and provinces and includes a link where the public can view properties currently subject to forced sale. To participate in a forced-sale auction, individuals can download Khmer-language bidding application forms through links provided on the platform. The form typically requires the applicant’s name, sex, year of birth, identity card number and issue date, and address, together with details identifying the immovable property (including its ownership certificate number), the relevant enforcement case number and date, and the reference to the public auction or tender announcement issued by the court. Completed application forms must be submitted directly to the specific municipal or provincial court that issued the forced sale. For further inquiries about a particular forced sale, interested parties should likewise contact the relevant municipal or provincial court. Forced Sale of Immovable Property in Cambodia The publication of these notices relates to the forced sale procedure for immovable property under Cambodia’s Code of Civil Procedure (CPC). Unlike property seizure by a court, a forced sale is a compulsory execution proceeding—a subsequent enforcement step that arises only after an underlying dispute has been adjudicated and a debtor fails to pay the debt or outstanding amount due under a final and binding judgment or other enforceable title of execution. For the purposes of this procedure, the term “immovable property” under the CPC refers to land, registered buildings, jointly held shares of such property, registered

August 6, 2026

Know Your Supplier: Protecting Input VAT in Thailand’s Digital Economy

Every month, VAT-registered businesses in Thailand calculate their output and input VAT and file a return to pay the net amount due or claim a refund. Yet a common and costly dispute arises when a business that has paid input VAT to its supplier—and done everything asked of it—later finds that input VAT rejected on the grounds that the tax invoice was issued by “a person not entitled to issue tax invoices.” In these cases, a buyer may have confirmed the supplier’s VAT registration on the Revenue Department’s website, paid through the banking system, received a complete tax invoice, and kept full payment and inventory records. Even so, if the Revenue Department later determines that the supplier did not genuinely make the sale or collected the VAT without remitting it, the department can disallow the input VAT and assess additional tax, surcharge, and penalty—often more than a year after the transaction. A new article from tax and dispute resolution specialists at Tilleke & Gibbins in Bangkok examines how the Revenue Department and the courts approach these disputes, including two recent Supreme Court (Tax Division) decisions confirming that the taxpayer bears the burden of proving a supplier genuinely sold and delivered the goods and received payment. It considers why the VAT registration system offers no legal safe harbor, why the evidentiary burden falls hardest on online and cross-border transactions where buyers and sellers never meet, and how the Revenue Department’s own digital infrastructure could detect non-remitting suppliers at the source rather than shifting the loss to good-faith buyers. The article also sets out practical guidance: how to build a comprehensive “know-your-supplier” file at the time of a transaction, the procedural steps and strict deadlines for challenging a VAT assessment, and why dispute readiness belongs alongside tax planning at the center

July 15, 2026

Thailand Introduces New Licensing and Public Service Facilitation Framework

On July 8, 2026, Thailand enacted a new law significantly expanding the framework for government service delivery and licensing facilitation. The Facilitation of Licensing and Public Services Consideration Act B.E. 2569 (2026) (Facilitation Act 2026) replaces and expands the framework of governmental services under the Facilitation of Official Licensing Consideration Act B.E. 2558 (2015) (Facilitation Act 2015) and broadens its scope to cover public services, administrative processes, and public benefits. The Facilitation Act 2026 aims to modernize government services by promoting e-filing, reducing administrative burdens and repeated document requests, and improving predictability. For businesses, this should ease compliance and shorten approval timelines, subject to implementing regulations and agency readiness. Public Services Facilitation Scope The Facilitation Act 2015 applied mainly to permissions, registrations, and notifications required before conducting activities that require licenses, certificates, permits, approvals, or registrations. The Facilitation Act 2026 broadens this framework to include public services and other benefits, such as welfare, subsidies, and grants, provided to Thai citizens, expanding government agencies’ responsibilities beyond licensing facilitation into a wider administrative-service framework. It also introduces a broader definition of “government agency” to include central, regional, and local government bodies, state enterprises, public organizations, and other state entities. Licensing Changes The Facilitation Act 2026 introduces a “super license” (termed a “main license” under the act) that exempts the holder from obtaining multiple related or ancillary licenses issued by different government agencies. Obtaining a super license deems the licensee to have automatically obtained the related “sublicenses” required to conduct the relevant activities. The cabinet will designate eligible activities by royal decree. The act also introduces an expedited licensing option, allowing applicants to pay an additional fee to fast-track their applications in urgent cases. Expedited processing must not interfere with standard application timelines. The criteria, procedures, conditions, and fees for expedited licensing

July 10, 2026

Vietnam Issues New Requirements for E-Commerce Platforms

Vietnam has taken a significant step in regulating its e-commerce sector with the issuance of a new decree guiding the country’s recently enacted Law on E-Commerce. Decree No. 248/2026/ND-CP, issued on June 30, 2026, and taking effect the following day, addresses mandatory platform policies, registration requirements for offshore platforms, additional obligations on platform operators, and market access conditions for foreign investors. Mandatory Policy Contents The decree sets out detailed guidance on the required contents of various platform policies, covering pricing, payment, display priority, livestream sales, delivery, returns, method of service provision, and service termination and refunds. Clarification of Obligations for Platform Operators The decree provides clarification of the obligations applicable to platform operators. Notably, intermediary e-commerce platform operators with online ordering functions must: Collect specific information to implement electronic identity verification of sellers; Cooperate with regulators by reporting online through the state e-commerce management system and by blocking, suspending, or removing content upon request of a competent authority; Maintain a mechanism to store contract data, including price, product or service information, and parties’ information, for at least three years from the date of contract conclusion; and If qualifying as a “large digital platform” under consumer protection law, maintain an online system for receiving and handling complaints and requests, and comply with enhanced content-removal requirements. Registration Requirements for Offshore Platforms Offshore e-commerce platforms, whether direct-sales, intermediary, social-network-based, or integrated, that conduct e-commerce activity in Vietnam must register with the Ministry of Industry and Trade if the platform: Allows Vietnamese-language selection; Uses a “.vn” domain; or Reaches 100,000 or more transactions with Vietnam-based buyers within a calendar year. Notably, the registration requirement now captures not only traditional intermediary platforms, but also direct-sales platforms. Foreign Investment Conditions Foreign investors holding a controlling interest in an intermediary e-commerce platform, a social media platform

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March 30, 2020