LEGAL REASONING OF THAI CONSTITUTIONAL COURT IN THE CASE THAI STEEL GALVANIZED LTD(1)

By Alexander Shytov

The Background of The Case
This case was heard by the Thai Constitutional Court in April 2003. Its background is following. The case was referred to the Constitutional Court by a civil court in Bangkok according to the procedure of submitting complaints to the Court. The civil court was hearing four separate but almost identical cases in which there was one plaintiff - the Thai Bank who sued different companies and individuals among whom Thai Steel Galvanised Ltd was numbered the first. The Thai Bank was attempting to recover the debt which the defendants owed to different financial companies whose assets had been transferred to the Thai Bank according to governmental regulations. Some of the defendants were guarantors of the debtors. The plaintiff asked to enforce the return of debts through seizure of property belonging to the defendants and its subsequent sale. The defendants challenged the right of the Thai Bank to claim the repayment of debts though questioning the legality of the merger between the bank and the creditors of the defendants. This legality was dependant on the governmental regulations which sanctioned such a merger.

Thus, the issue of the case was whether those governmental regulations concerning investment companies and banks violated Thai Constitution. The defendants appealed to Section 29 of the Constitution. The Section states that:

Part  2

(1) *Originally Published in the Journal of Political Science of Chang Mai University, Thailand. – Journal No: 1, Vol. 39, 2004.
** The author is a law lecturer at School of Law, Faculty of Social Sciences, Chiang Mai University, Chiang Mai 50200 Thailand.
(2) Constitutional Court Decision 11/2546 at: http://www.concourt.or.th/decis/y03d.html
(3) Constitution of Thailand, 1997. Section 264.