Recent Amendment to Regulations on Vehicle Hire-Purchase Agreements

January 27, 2023
Following the 2018 enactment of regulations governing contractual terms contained in vehicle hire-purchase agreements, the Office of the Consumer Protection Board (“OCPB”) has recently resolved to adjust such regulatory scheme as part of their initiatives to alleviate the ongoing economic downturn and financial hardships suffered by consumers as a result of the pandemic, and to prevent consumers being subject to any unfair contractual terms in this respect.  The Notification of Contracts Committee Re: Prescribing Hire Purchase for Vehicle and Motorcycle Business as Contract-Controlled Business, B.E. 2565 (2022) (the “Notification“), which was enacted on 13 October 2022 and will become effective on 10 January 2023, repeals the previous regulations and amends four major aspects thereof as detailed below. 1. Hire-Purchase Interest Rate Previous Regulation Newly Enacted Notification Flat interest rate (i.e., calculated from the initial principal) Effective interest rate (calculated from the outstanding principal), with the prescribed ceiling according to the age and type of vehicle; New car: not exceeding 10% per annum; Used car: not exceeding 15% per annum; and Motorcycle: not exceeding 23% per annum.    2. Early Debt Repayment  If the Debtor intends to pay off the entire outstanding balance, regardless of the scheduled installments; Previous Regulation Newly Enacted Notification The Creditor shall offer a discount to the Debtor of at least 50% of the remaining interest payable (which is not yet due). Creditor shall offer discounts to the Debtor at the following rates, depending on the proportion of the installments already paid; If less than 33% of the total outstanding balance has been paid, a discount of at least 60% on the interest which is not...

Third Party Funding in Thailand – Is it Possible and Relevant? With Special Insights from Deminor Litigation Funding

January 13, 2023
One of the common complaints that commercial entities have about international arbitration in Thailand is the costs. Whilst in the past, international arbitration has been promoted as being cheaper than court litigation, in practice this has not always been the case, particularly in the case of complex commercial disputes or investor state arbitration. Third party funding can dramatically change this landscape. The definition of third party funding, simply put, is where a third party funds the costs of a litigation or arbitration on behalf of one of the parties in return for an agreed return. For parties who wish to pursue litigation or arbitration but cannot afford the costs – or the financial risk – of doing so, this could be an answer to their problems. It may also make a way for arbitrations to become more accessible and pursued in Thailand.  In this article, Kudun and Partners and third party funder, Deminor Litigation Funding, examine the possibility of third party funding in Thailand by exploring the current landscape and providing a comparative analysis with the situation in Hong Kong and Singapore. The article concludes with some food for thought as to whether third party funding could be a possible way forward for Thailand. Current landscape in Thailand Third party funding is not allowed in a number of jurisdictions as a result of the common law doctrines of maintenance and champerty.  Maintenance occurs when one “officiously intermeddles” in a legal action by maintaining or assisting a party with money (or otherwise) to prosecute or defend the action, when one has neither an interest in the action nor any other...

Does the New Manufacturing of Alcoholic Beverages Regulation Open Things up for New Players, or Simply Impose New Restrictions?

January 13, 2023
Thailand’s traditional alcoholic beverages have been developed for centuries and their growth potential has been recognized in the global market. Several indigenous alcoholic beverage brands have received international recognition and are sold globally. This has continued even though Thailand’s manufacturing of alcoholic beverages-related laws (the “Laws”) are very restrictive. Such limitations include (but are not limited to) minimum capital and minimum production capacity requirements. Due to these restrictions, the majority of Thai small players have decided to proceed with the manufacturing of their alcoholic beverages outside of Thailand.  Back in 2019, the Move Forward Party, a political party in Thailand, proposed the Progressive Liquor Bill (the “Bill”), which was aimed at loosening the limitations under the Laws that favor existing players and has spent the past three years campaigning for the Bill to come into effect. On November 1, 2022, the Ministry of Finance issued the Ministerial Regulation on the Manufacturing of Alcoholic Beverages, B.E. 2565 (2022) (the “New Regulation”), which came into effect on the following day, to replace the previous ministerial regulations. Following that, the Bill was put to the vote but was rejected on November 2, 2022. The main reasons given by the government for such rejection were concerns about bootlegging, sanitation, and health hazards to consumers that may arise from non-standard production processes, despite the fact that hygiene falls directly under the responsibility of the Ministry of Public Health, Ministry of Industry, and other governmental organizations. It would appear that the New Regulation is designed only to relax (but not liberalize) legal or regulatory requirements and restrictions to enable small players who has limited capital...

Draft Regulation on Cross-Border Transfer of Personal Data Outside of Thailand

January 13, 2023
The Office of the Personal Data Protection Committee (the “PDPA Committee”) published a draft regulation issued under the Personal Data Protection Act (2019) (the “PDPA”) relating to the cross-border transfer of personal data outside of Thailand (the “Draft Regulation”) on its website in September 2022.  Cross-Border Transfer of Personal Data under the Current Provisions of the PDPA According to Section 28 of the PDPA, a data controller can transfer personal data to a foreign country if the receiving country has in place adequate personal data protection measures that are in line with the adequacy criteria issued by the PDPA Committee. The PDPA Committee will announce a list of countries that have in place such personal data protection measures (the “Whitelist Countries”) later on. However, if the personal data is not transferred to any Whitelist Countries, the cross-border transfer can still be conducted if the exemptions under Section 28 apply.   Moreover, Section 29 (Paragraphs 1 and 2) of the PDPA provides an alternative method to transfer personal data to a foreign country. It states that the transfer of personal data is permitted within the same group of companies that have established binding corporate rules (the “BCR”) relating to data protection, which must be reviewed and certified by the PDPA Committee pursuant to the regulations issued by the PDPA Committee. If the company has certified BCR, Section 28 no longer applies to the transfer of such personal data.  Under Section 29 (Paragraph 3) of the PDPA, the cross-border transfer of personal data may be carried out in the absence of any Whitelist Countries or certified BCR if the transferor provides appropriate...

Employees’ Organizations at the Enterprise-level & Grassroots Trade Unions

December 28, 2022
In Vietnam, the ‘Trade union’ was the only organization dedicated to protecting employees’ legitimate rights and interests from the implementation of the first Labor Code in 1994 until the Labor Code of 2012 was enacted. Under the 2012 Labor Code, the term referring to trade unions was changed to “Representative organization of a grassroots-level employees’ collective”.  However, the essence of this organization remained and was defined as “the Executive committee of a grassroots trade union or the Executive committee of the immediate upper-level trade union in a non-unionized enterprise”.  As such, it could be said that it was old wine in a new bottle. The 2019 Labor Code revised the term to “Employees’ representative organizations at the grassroots level”, comprising grassroots trade unions and employees’ organizations at all enterprises.  Specifically, Article 3.3 of the 2019 Labor Code stipulates: “The employees’ representative organizations at the grassroots level means an internal organization voluntarily established by employees of an employer which protects the employees’ legitimate rights and interests in labor relations through collective bargaining or other methods prescribed by labor laws.  The employees’ representative organizations at the grassroots level comprise the grassroots trade union and the employees’ organization at enterprise-level.” Why was there a change to “the Employees’ Organization at Enterprise-level” from the previous Trade Union definition? In practice it was proven that the Trade Union had not been influential and could not competently perform its function as an independent representative organization for the rights and interests of employees because the Trade Union’s organizational structure and operational mechanism were still dependent on the enterprise. The leaders of the Grassroots Trade Unions remained employees of the enterprise and received wages and benefits from the...

Legitimising Electronic Signatures

December 28, 2022
As cross-border transactions are becoming increasingly common, businesses and individuals are turning to electronic means to save time and costs. Instead of waiting for documents to be transported by courier around the globe, the relevant parties can finalize and execute their contract in a matter of seconds, in the comfort of their own base. The steady rise of globalization, coupled with the social distancing protocol of COVID-19, is further accelerating the popularity of electronic signatures in 2020. Their growing prevalence brings forth questions about their legitimacy, effectiveness, and security. Fortunately, the technological advancement behind their conception and the maturing legal infrastructure built around electronic sign-offs are attesting to their positive values: electronic execution of contracts is a sufficient alternative to, if not a replacement of, in-person procedures. Legal Infrastructure In order for electronic signatures to be widely used, they have to be deemed legally valid under the relevant jurisdiction. As early as the late 1990s, legislative bodies around the world have come to grant electronic signatures the same legal status as handwritten signatures, encouraging businesses to adopt the paperless practice. In 2020, electronic signatures are legally recognized in over 60 countries. In Vietnam, electronic signatures have been given legal effect and enforceability since 2005. According to Article 21.1, Law on E-transactions 2005, “an [electronic] signature is established in the form of words, letters, numbers, symbols, sound, or other forms by electronic means, logically attached with or associated with a data message, which has an ability to certify the person who signs the data message and to certify the approval of such person to the content of the signed data...