Act and Administrative Contracts
Conflict is inherent in human relations.
Published in Public Law Net On Thursday November, 2004
Interpretation of the General Meeting of the Judges of the Supreme Administrative
clarify the matter, the General Meeting of the Judges of the Supreme
Administrative Court No. 6/2544 (2001) dated 10 October 2001 considered
the meaning of the administrative contract. Apart from the
meaning provided by the Administrative Act, the General Meeting concluded
that administrative contract also includes an agreement
containing a term exhibiting a special characteristic of the States
privilege so that the exercise of the State powers or provision of the
administrative affairs which is a form of public service can be achieved.
Thus, if any agreement made by an administrative agency or a person
acting on behalf of the State intends to bind itself with the other
party on the basis of voluntary equality and such agreement does not
exhibit such characteristic, such agreement is a civil contract.
Decisions of the Supreme Administrative Court
Supreme Administrative Court ruled that the housing hire-purchase agreement
between National Housing Authority (NHA) and its lessee was not an administrative
contract (Order No. 27/2001). In this case, the NHA acted as a private
party and did not exercise any administrative power. The contract was
a civil one. The Court found that a contract between a private construction
company and Chiang Mai University, a public university (which is an
administrative agency), for the construction of a dormitory was an administrative
contract, and thus, within its jurisdiction (Order No. 104/2001). In
addition, the Court ruled that the Commercial Building Lease Agreement
between the State Railway of Thailand and private party was not an administrative
contract (Order No. 91/2002).
the Court held that the government service agreement between the Royal
Thai Navy (RTN) and its former officer, whereas the officer was required
to serve in the RTN for a certain period after graduation or to reimburse
three times the income and expenses in connection with his education,
was an administrative contract (Order No. 127/2001). This is because
the contract contained a term exhibiting a special characteristic of
the States privilege and its nature is to require the officer
to serve in the RTN, which is a public service.
of the Central Administrative Court
Central Administrative Court also ruled on certain cases. Some cases
(including the RTN case discussed above) were overruled by the the Supreme
Administrative Court. The Court ruled that the telephone service agreements
between TOT Corporation Public Company Limited, the successor of the
Telephone Organization of Thailand (TOT), and its customers or users,
were not administrative contracts (Red Case Nos. 1733-1734/2002).
rationale is that the agreements were made on a voluntary basis and
were not made for the provision of a telephone network, which were the
contracts for the provision of public utilities. In this case, the Court
also ruled that although TOT was corporatised and no longer a State
Enterprise established under the Act or Royal Decree, TOT Corporation
Public Company Limited remained an administrative agency being subject
to the jurisdiction of the Administrative Courts.
Decisions of the Commission on Jurisdiction of Courts
there are more than two courts, a jurisdictional dispute will arise.
Which court has jurisdiction over a particular case? To solve this issue,
the Constitution of 1997 provides that a dispute on the competent jurisdiction
among the Court of Justice, the Administrative Courts, Military Courts
or any other Courts must be decided by a Commission. This Commission
is known as the Commission on Jurisdiction of Courts.
currently consists of the President of the Supreme Court of Justice
as Chairman, the President of the Supreme Administrative Court, and
others judges. The Act Concerning the Settlement of Disputes on the
Competent Jurisdiction among the Courts B.E. 2542 (1999) was enacted
to deal with this jurisdictional dispute. The Commissions decision
is final and all the courts must comply with its decision. In line with
other countries adopting multi-court system, the cost of the Commission
is necessary and is naturally a price to pay for opting multi-court
response to the disputes between the Court of Justice and the Administrative
Court, the Commission has ruled on numerous matters regarding administrative
contracts. For example, the Commission ruled that the contract for construction
of a hospital building between Chumporn Province and contractor was
an administrative contract and thus the Administrative Court, not the
Court of Justice, had competent jurisdiction over the dispute of such
contract (Decision No. 10/2002). In other case, the Commission ruled
that the contract for construction and laying-down of water pipelines
between a local government and a contractor was an administrative contract
(Decision No. 14/2002).
was also ruled that the contract for construction of a scientific laboratory
and equipment center building between a public university (Prince of
Songkla University) and a contractor was an administrative contract
(Decision No. 18/2002). This is because the contract was for the provision
of public utilities as the building was an element and instrumental
in providing education, which was a public service. In addition, the
Commission held that an agreement to sell and purchase land to be expropriated
by the State (Bangkok Metropolitan Administration (BMA)) pursuant to
the expropriation law was an administrative court (Decision No. 23/2002).
The BMA exercised administrative power to compel the landowner to sell
the land and the contract was for the road construction. It was a contract
for the provision of public utilities.
in an related case, the Commission ruled that the dispute arising from
a breach of auction sale by the Customs Department and its customer
was within the jurisdiction of Court of Justice, not Administrative
Court (Decision No. 21/2002). The auction sale was a civil matter under
the civil and commercial law.
Grounds for Setting Aside the Award
the former one, the New Act sets forth for the first time grounds for
revoking or setting aside an arbitral award. Any party may apply to
the Court to set aside the award within ninety days. An award may be
set aside by the Court if it finds that (a) the award deals with the
subject-matter of the dispute which cannot be settled by arbitration
under the law; or (b) the recognition or enforcement of the award is
in conflict with public order or good morals. There is no precedent
on this provision.
the new Arbitration Act, arbitration clauses in administrative contracts
are a public matter in the sense that arbitration awards will affect
the State administration or the States budget. This is in line
with the law on administrative courts and administrative court procedure.
One of the explicit reasons for setting up the Administrative Court
system is to establish a forum for the review of cases and administrative
contracts which may affect State administration or implicate public
you may be aware, the new Arbitration Act resolves that the arbitration
clauses administrative contracts are valid and enforceable. However,
the issue of which contract is an administrative contract is not entirely
settled. In addition, there is no precedent on what type of arbitral
awards can be revoked or set aside by the courts. Inevitably, more and
more disputes will be decided and precedents set in the future.
under the new Act, the Administrative Courts has a bigger role in shaping
the arbitration in administrative contracts. How effective and efficient
the role played by the Administrative Courts still remains to be seen
in the years to come.
and Arbitration Practice Group, and Administrative and Constitutional
Law Practice Group