Company Directors' Duties under the Good Corporate Governance Systems and Lessons from the Pin Chakkaphak Case
The article analyses the major principles of the good corporate governance in the common law in comparison with those in the Thai legal system. It focuses, in particular, on the standards of a duty of care and diligence applied to company directors in Australian and English cases, and compares the different standards set out in the Australian Corporations Act 2001 (Cth) and Thai Public Company Limited Act BE 2535 (1992). It goes on to discuss in detail Pin Chakkaphak v Government of Thailand (2001) and the failure on the part of the Thai Government in the case in the English High Court to extradite Mr Pin Chakkaphak, the former president of Finance One Co Ltd, from the UK. The article argues that the Pin Chakkaphak case clearly demonstrates a number of loopholes in Thai corporate laws and financial regulations, which need to be substantially reformed by incorporating an objective standard of a duty of care imposed on company directors and a duty to avoid insolvent trading.
Rectification of Documents: Removing Unnecessary Complexity
Within the equitable doctrine of rectification, a distinction between common or mutual mistake and unilateral mistake is currently adopted by courts, litigants and scholars. Based on this distinction the focus of a court is to identify who made a mistake and who had knowledge of any mistake. This approach is unhelpful and has led to unnecessary complexity which has been identified by judges and scholars in several recent cases in England and Australia. In addition, the boundary between common law construction and the equitable doctrine of rectification has become less clear. To address the complexity of the law and the uncertain boundary between construction and rectification this thesis examines the scope of the common law approach to construction, identifies the current law relating to when rectification will be granted, outlines in what ways is it difficult to reconcile the current case law, and explains where the law of rectification went wrong. After addressing those matters the thesis explains how the case law on the equitable doctrine of rectification needs to be restated, in accordance with principles established in earlier case law, so that the law is coherent and principled. This provides a comprehensive solution to the uncertainty and complexity in the law of rectification. The solution includes arguing that the distinction between common or mutual mistake and unilateral mistake should be rejected and that the correct distinction is between two different types of mistakes: mistakes made in the recording of agreements and mistakes made during the formation of agreements. In addition, courts in recent decades have focused on the intention of the parties rather than on agreements made by contracting parties. It is argued that a focus on the type of mistake made, and a focus on agreements rather than intentions, will remove the current complexity and uncertainty in the law of rectification that has emerged in recent cases.
Company Directors' Obligations and Liabilities in Relation to Insolvent Trading in Thailand: A Comparative Perspective
Inadequate provisions for dealing with corporate insolvency are a significant obstacle in the economic development of Thailand. Companies which continue to trade even after they are unable to pay their debts (insolvent trading), often experience meltdowns that result in deep insolvencies that severely impact their creditors. In the Asian Financial Crisis in 1997, the Thai economy was significantly impacted by the insolvent trading practices of Thai companies. The Pin Chakkaphak case, in which the Thai government unsuccessfully sought a UK court to extradite Pin Chakkaphak, the then CEO of Fin One, for providing uncommercial loans to insolvent subsidiary companies, is a leading example of how Thai laws are neither effective nor adequate to deal with the problem of insolvent trading. Nevertheless, in spite of the known problems, current Thai corporate and insolvency laws still do not provide specific provisions or measures to regulate insolvent trading. Developed countries, such as the United Kingdom, Australia, the United States and Germany, have specific statutory or common law provisions to control insolvent trading. In addition, the United Nations Commission on International Trade Law (UNCITRAL), provides the 'Legislative Guide on Insolvency Law' by recommending the imposition of specific obligations on company directors to take appropriate action in order to minimise potential losses in the period approaching insolvency. An essential component of good corporate governance frameworks, whether at the domestic or international level, is the specification of the director's obligations and liabilities with respect to insolvent trading.