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 rules with the seat of arbitration in Singapore.

When a dispute arose, the plaintiff nonetheless sued in the Thai court of first instance. The defendant moved to strike the case from the docket under section 14 of the Arbitration Act B.E. 2545 (2002), which so directs where an action falls within a valid arbitration agreement. The court of first instance granted the motion. The Court of Appeal then reversed the decision and directed the trial court to continue the proceedings, and the defendant obtained permission to appeal to the Supreme Court.

Of the two issues that the court had to rule on, the first was procedural: whether the Court of Appeal had jurisdiction to entertain the plaintiff’s appeal at all, given the restrictive appellate regime in section 45 of the Arbitration Act. The Supreme Court clarified that a section 14 striking-out order is appealable through the ordinary hierarchy under section 223 of the Civil Procedure Code, not the direct-to-Supreme-Court channel reserved for award challenges—a point of independent importance for Thai arbitration procedure. The second issue was substantive: whether the word “may” in clause 19.2.1 gave the plaintiff a choice between arbitration and litigation, such that the action was properly brought before the Thai courts.

“May”: Three Lines of Reasoning

On the substantive issue, the Supreme Court reversed the Court of Appeal and restored the first-instance order granting the motion to strike the case from the docket. Three strands of reasoning support the conclusion. First, the court read clauses 19.1 and 19.2.1 as an integrated dispute resolution mechanism. The parties had prescribed a sequence—good-faith consultation for sixty days, followed by arbitration if consultation failed—and by constructing that sequence they “implicitly demonstrated” that they did not intend disputes to be resolved through court proceedings. The permissive verb operated within, not against, that architecture: it identified who could commence arbitration and when, rather than whether arbitration was the exclusive forum. Secondly, the court accepted expert evidence that “may” conferred on either party the right to require arbitration once the sixty-day negotiation window closed without settlement; it did not offer the claimant an election between arbitration and litigation. Thirdly, the court relied on the testimony of the drafter of the subcontract, who stated that he had never intended disputes to be resolved before the Thai courts. The consistency between the expert and the drafter was, for the court, decisive: “may” could not reasonably be read as preserving recourse to the courts, and the plaintiff had no right to bring the action.

Aligning with the Dominant International Position

The result aligns Thailand with the dominant international position. Common-law courts have repeatedly held that permissive arbitration language binds both parties once one of them elects arbitration. In WSG Nimbus Pte Ltd v Board of Control for Cricket in Sri Lanka [2002] 3 SLR 603, the Singapore High Court construed a clause providing that either party “may elect to submit” a dispute to arbitration as obliging the counterparty to arbitrate once that election was made. In Anzen Ltd v Hermes One Ltd [2016] UKPC 1, the UK Privy Council—drawing together English, Canadian, and Singaporean authority—held that a clause stating that any party “may submit the dispute to binding arbitration” entitled a party sued in court to insist on arbitration and obtain a stay of the litigation, without having to commence an arbitration of its own. The Thai Supreme Court arrived at a functionally similar conclusion without citing any foreign authority: under section 14 of the Arbitration Act, the consequence is not a stay but the striking-out of the case altogether.

Extrinsic Evidence and the Limits of Drafter Testimony

Thai courts interpret juristic acts by ascertaining the true intention of the parties rather than adhering to the literal meaning of words, and extrinsic evidence is admissible to that end. Even so, the weight placed on the unilateral testimony of the drafter—called by the party resisting litigation—sits uneasily with the objective theory of contract, under which one side’s uncommunicated drafting intentions are ordinarily irrelevant. The safer reading is that the drafter’s evidence was confirmatory rather than foundational: the structural inference from the two-tier clause, reinforced by independent expert opinion, would likely have sufficed. Counsel should nonetheless note the forensic value, in Thai proceedings, of evidence explaining the genesis of a dispute resolution clause.

A Pro-Arbitration Signal for Foreign Parties

Read with section 14 and its striking-out remedy, the decision assures foreign parties that Thai courts will decline jurisdiction over disputes covered by institutional clauses seated abroad, even where the clause may be loosely worded. That predictability matters in a construction sector where claims of this magnitude—here nearly half a billion baht—are common, and it complements the broader trajectory of Thai arbitration law since the 2019 amendments to the Arbitration Act opened Thai-seated proceedings to foreign arbitrators and counsel.

Lessons for Drafters

For drafters, the practical lesson is to prevent such issues by drafting carefully. “May” survived scrutiny in this case, but only after three instances of litigation. The mandatory “shall,” coupled with an express exclusion of court jurisdiction save for interim measures, forecloses the argument at the outset. Tiered clauses should also define the trigger and expiry of the negotiation period with precision, since the sixty-day mechanism in clause 19.1 was integral to the court’s conclusion that arbitration was the compulsory terminus of the agreed process.

Conclusion

Judgment No. 3427/2562 establishes two propositions. Procedurally, a section 14 striking-out order follows the ordinary appellate route. Substantively, a tiered clause providing that either party “may” submit a dispute to arbitration is a binding agreement to arbitrate, excluding the jurisdiction of the Thai courts. The decision strengthens the enforceability of arbitration agreements in Thailand and harmonizes Thai practice with leading common-law authority, while reminding drafters that clarity remains the cheapest form of dispute avoidance.