The Enforcement of a Preferential Right in Civil Cases and Bankruptcy Proceedings: A Comparative Study of Japanese and Thai Legal Systems
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Abstract
This paper provides a comparative study of the Thai and Japanese Bankruptcy Acts and proposes a rearrangement of the ranks of preferential rights in the Thai Bankruptcy Act. Particularly, according to Section 6 of the Thai Bankruptcy Act, a holder of preferential right shall be considered a secured creditor only if his right can be enforced in the same way as a pledgee. Moreover, the preferential claims under Article 130 of the Thai Bankruptcy Act do not embrace all general preferential rights established by the Thai Civil and Commercial Code. That is, a preferential right in respect of common benefit expenses, a preferential right in respect of funeral expenses, a preferential right in respect of money to which an employee is entitled in return for the work performed for the employer debtor, and a preferential right in respect of taxes shall be treated as preferential claims in bankruptcy proceedings. But a preferential right in respect of costs of daily necessary consumables is excluded and is considered an ordinary creditor under the Thai Bankruptcy Act. While embracing all preferential rights under the Thai Civil and Commercial Code into Article 130 of the Thai Bankruptcy Act may bring about consistency, this may adversely affect the rights of other creditors who are unaware of those rights due to the absence of publicity. Moreover, unlike the Thai Bankruptcy Act, a claim in respect of common expenses is considered a “claim on the estate” under the Japanese Bankruptcy Act under which such expenses can be paid from the debtor’s estate at the very beginning of the bankruptcy proceedings. Unfortunately, the concept of “claim on the estate” is not recognized in the Thai Bankruptcy Act.
To address the aforesaid issues, this paper explores the Thai supreme court cases, and relevant theories in comparison with that of Japan. Moreover, the provisions of the Japanese Civil Execution Act and Bankruptcy Act are synthesized as they provide some guidance on amendment of the Thai Civil Procedure Code and Bankruptcy Act in the future.
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