No arbitration clause,
no loan says Japan
Thai court system not an option for mass transit loan
By Jon Fernquest
A
legal system that can act quickly to protect the rights of creditors is important if a country
wants to attract loans and investment capital.The Japanese government was set to finance Thailand's next phase of mass transportation rail lines in Bangkok.
The loan agreements included an arbitration clause.
This meant that if problems arose and loans could not be paid back in a timely manner any dispute would be resolved by an independent group of arbitration experts outside the legal system.
The need to go around the Thai legal system like this may indicate a lack of confidence in the legal system.
The article begins after the vocabulary:
arbitration, arbitration in disputes
- the judging and settling of a dispute or disagreement by a neutral
party (not involved in dispute)
a clause - one item or detail in an agreement
an arbitration clause in an agreement - an item in an agreement calling for arbitration if a dispute arises
set to finance - ready to finance
creditors - people who have provided loans but have not been paid back yet
resolve a dispute - end a dispute (by getting both sides to agree to a compromise)
independent of Y - acting alone (not a friend or partner of Y)
a clause - one item or detail in an agreement
an arbitration clause in an agreement - an item in an agreement calling for arbitration if a dispute arises
set to finance - ready to finance
creditors - people who have provided loans but have not been paid back yet
resolve a dispute - end a dispute (by getting both sides to agree to a compromise)
independent of Y - acting alone (not a friend or partner of Y)
Local News
TRANSPORT
MRTA backs rail arbitration
AMORNRAT MAHITTHIROOK24/09/2009
The Mass Rapid Transit Authority is asking the cabinet to accept arbitration in disputes involving its Purple Line electric railway project, to help secure financing.
The creditor, Japan International Cooperation Agency (Jica), wants recourse to arbitration in the event of a dispute.
But in a July 28 decision, the cabinet decided to exclude the arbitration option.
Mass Rapid
Transit Authority of Thailand (MRTA) - the government agency
responsible for mass transportation in and around Bangkok, founded in
1992 under Prime Minister Anand (See website
and Wikipedia
on Bangkok Metro)
X backs Y - X supports Y, wants Y to happen
Purple Line electric railway - Bangkok mass transit rail line to be built from Bang Sue to Nonthaburi (See Wikipedia and map)
secure financing - get financing
Japan International Co-operation Agency (JICA) - an independent governmental agency that coordinates official development assistance (ODA) for the government of Japan (See website and Wikipedia)
recourse to arbitration in the event of a dispute - use arbitration if there is a dispute
the arbitration option - the possible choice to use arbitration
exclude the arbitration option - not allow arbitration to be chosen
X backs Y - X supports Y, wants Y to happen
Purple Line electric railway - Bangkok mass transit rail line to be built from Bang Sue to Nonthaburi (See Wikipedia and map)
secure financing - get financing
Japan International Co-operation Agency (JICA) - an independent governmental agency that coordinates official development assistance (ODA) for the government of Japan (See website and Wikipedia)
recourse to arbitration in the event of a dispute - use arbitration if there is a dispute
the arbitration option - the possible choice to use arbitration
exclude the arbitration option - not allow arbitration to be chosen
Trying to restore arbitration clause
MRTA chairman Supoj Saplorm met Transport Minister Sohpon Zarum yesterday to discuss the cabinet's decision to exclude the option of an arbitration committee to resolve any dispute involving the Purple Line which will link Bang Sue and Bang Yai.Mr Supoj asked the minister to try to convince the cabinet next Tuesday to restore the arbitration condition in the 50 billion baht electric railway project, because without the condition Jica would not finance the work.
An arbitration committee would consist of a representative of the government, a representative of its contractor and a third member acceptable to the government and the contractor.
restore the arbitration condition
-
contractor -
representative of its contractor -
contractor -
representative of its contractor -
Arbitration internationally recognized
Mr Sohpon said arbitration was an internationally recognised mechanism to speed up the process of dispute resolution which otherwise could become bogged down in court.However, the cabinet decided to exclude arbitration from government-private projects because the mechanism had failed in the past to benefit the state.
"Arbitration is an international principle," the minister said.
"It is applied overseas without a problem but it always causes problems in our country and the government is at a disadvantage.
"I know well what is going on but cannot elaborate. The problems rest with the people who implement it. As there are problems, the government resolved to exclude it and ordered compliance with Thai law in the event of a dispute."
MRTA deputy governor Chukiat Photayanuwat said Jica believed the contracts for the Purple Line project were international agreements and should include the arbitration option.
MRTA chairman Supoj said with the arbitration issue unsettled, work on the Purple Line could not start even though the MRTA had signed one of three contracts for the project.
internationally recognised
mechanism to speed up the process of dispute resolution
bogged down - going slowly, not moving forward anymore
what is going on - what is happening
elaborate - provide details
cannot elaborate - cannot provide details (because private or confidential)
confidential - private information that should be kept a secret
X resolved to do Y - X has made a decision to do Y (and won't change the decision)
compliance with Thai law - following Thai law
an issue - an important subject that people disagree about (and are discussing or arguing about)
settle an issue - make people agree about an issue they disagree about
issue unsettled - people do not agree yet about the issue
bogged down - going slowly, not moving forward anymore
what is going on - what is happening
elaborate - provide details
cannot elaborate - cannot provide details (because private or confidential)
confidential - private information that should be kept a secret
X resolved to do Y - X has made a decision to do Y (and won't change the decision)
compliance with Thai law - following Thai law
an issue - an important subject that people disagree about (and are discussing or arguing about)
settle an issue - make people agree about an issue they disagree about
issue unsettled - people do not agree yet about the issue
(Source: MRTA backs rail arbitration, AMORNRAT MAHITTHIROOK, 24/09/2009, link)
