Country overview and commercial context
Insolvency proceedings in Thailand are governed by the Bankruptcy Act. In 1998, a form of
court-sanctioned rehabilitation proceedings was introduced, allowing creditors, the debtor or
a government agency to file a petition for rehabilitation of a debtor’s business. A specialised
Bankruptcy Court was established in 1999 to deal with bankruptcy and rehabilitation cases.
Since 1998, there have been over 300 rehabilitation cases. A significant number of these
companies undergoing rehabilitation are either in the process of implementing their court-
approved plans or have completed the rehabilitation process and have been released from
rehabilitation proceedings. A number of the more successful rehabilitation cases have
involved situations where, prior to filing the rehabilitation petition, there has been general
agreement between the main creditors and the debtor on the terms of the restructuring.
There have, however, been instances where debtors have engaged in tactics such as
warehousing debt to enable them to influence creditor approval of the plan.
In many informal rescue cases completed since the economic crisis of 1997, the
restructuring comprised little more than a rescheduling of debt with concessional interest
rates. However, a number of large companies have successfully restructured with many
completing subsequent refinancings to eliminate foreign currency debt and take advantage
of relatively low interest rates available through the Thai bond market.
1 Legal framework and the effectiveness of court processes/legal remedies
1.1 Describe the nature and effectiveness of the following processes:
(a) Debt recovery remedies where the creditor has no security?
Unsecured creditors need to commence legal proceedings in a Thai civil court. One of the
specialised courts, the Intellectual Property and International Trade Court (IP&IT Court)
normally deals with matters involving foreign creditors. Civil court proceedings can be