Directors of Thai private limited companies hold powerful positions. Under the Thai Civil and Commercial Code they manage the company, control its bank accounts, sign its contracts, hire and fire its staff, and represent it before third parties. The flip side of that power is a strict legal duty toward the company and its shareholders. A recent stream of Supreme Court (ศาลฎีกา) judgments in the Commercial and Economic Division has tightened how those duties are enforced, and most importantly, how shareholders can hold directors to account when the company itself refuses to act.
This article walks through five Supreme Court judgments that, taken together, draw a coherent picture of director liability and shareholder remedies in Thailand today. The cases span tort liability for misuse of company assets, the duty of loyalty and non-competition, procedural rules for shareholders' meetings, and the right of a shareholder to bring criminal proceedings against a wrongdoing director on behalf of the company. They are essential reading for any founder, investor, or board member operating through a Thai company limited.
The reasoning unfolds as a classical syllogism. The major premise is the legal framework: Thai law assigns directors specific duties and gives shareholders specific tools when those duties are breached. The minor premise is the conduct that came before the courts: directors who used company produce for themselves, removed colleagues without proper notice, set up rival businesses, or pocketed corporate assets. The conclusion is the legal consequence that the Supreme Court drew, and the broader rule that every business owner and director in Thailand should now treat as binding.
The Legal Background: What Thai Law Asks of a Director
The Civil and Commercial Code (CCC), Book III, Title XXII, on Partnerships and Companies, is the spine of Thai corporate law. It is the framework within which all five judgments operate. To understand what the Supreme Court decided, one has to read the relevant sections together.
Section 1144 and the Source of a Director's Authority
Section 1144 places management of the company in the hands of the directors, who must act in accordance with the company's articles and under the control of the general meeting of shareholders. Authority and accountability are tied at the hip. A director does not have a private estate inside the company; the director runs a mandate.
Section 1168: The Standard of Care and the Duty Not to Compete
Section 1168 is the single most important provision on director conduct. It requires directors to apply the diligence of a careful businessman (in Thai, "ความเอื้อเฟื้อสอดส่องอย่างบุคคลค้าขายผู้ประกอบด้วยความระมัดระวัง"). In its second paragraph, it forbids a director, without consent of the general meeting, to undertake commercial transactions of the same nature as, and competing with, the business of the company, whether on the director's own account or on behalf of a third party. The same paragraph forbids being an unlimited-liability partner in a competing concern. Section 1168 is the Thai codification of the twin pillars of directors' fiduciary duties: duty of care and duty of loyalty.
Section 1169: The Shareholder Derivative Action
Section 1169 is the procedural backbone of director accountability. If a director causes damage to the company, the company may sue for compensation. If the company refuses or fails to act, "any of the shareholders" may bring the action on behalf of the company. Creditors may also enforce the claim to the extent their claims against the company remain unsatisfied. This is the Thai equivalent of the common-law shareholder derivative action, and the Supreme Court has read it broadly, as the cases below show.
Section 1151 and Section 1175: Removing a Director and Calling a Meeting
Section 1151 reserves the power to remove a director to the general meeting of shareholders. Section 1175 governs how that meeting is convened. A notice of meeting must be published in a local newspaper at least seven days in advance and sent in writing to every shareholder. Critically, paragraph two of Section 1175 requires the notice to state the place, day, time and nature of the business to be considered, and where a special resolution is to be passed, the actual text of the proposed resolution must be set out. The point of the rule is not formal: it is to give shareholders a real chance to prepare.
Sections 420 and 438: Tort and the Measure of Damages
Section 420 of the CCC is the general clause on wrongful acts (ละเมิด, lamoet). A person who, wilfully or negligently, injures the rights of another in life, body, health, liberty, property or any other right is bound to make compensation. Section 438 gives the court discretion to fix damages according to the circumstances and gravity of the wrong. Both sections regularly come into play when directors injure their companies, because a breach of a director's duties is, simultaneously, a breach of the general duty of care owed under Section 420.
Penal Code Section 353 and the 1956 Act on Offences Relating to Companies
The criminal dimension matters too. Section 353 of the Penal Code criminalises misappropriation by a person entrusted with managing the property of another (in Thai, "ยักยอกในฐานะผู้รับมอบหมายให้จัดการทรัพย์"). The Act on Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499 (1956), notably Section 41, creates specific criminal offences for directors who dishonestly cause loss to the company. The Act sits alongside the Penal Code and the Civil and Commercial Code as the third pillar of the framework.
The Five Supreme Court Judgments at a Glance
The table below summarises the five judgments examined in this article. Read together, they trace the perimeter of director duties and shareholder remedies as Thai courts now apply them.
| Supreme Court Judgment | Core Statutory Basis | Question Decided | Holding in One Line |
|---|---|---|---|
| Dika 4456/2566 (2023) | CCC Sections 420 & 1169 | Can a director personally pocket revenue from company assets in defiance of a court order, and dismantle infrastructure without board consent? | No. Doing so is a tort against the company; a shareholder may sue derivatively to recover damages. |
| Dika 3413/2560 (2017) | CCC Sections 1151 & 1175, paragraph 2 | Can a general meeting remove a director under the agenda heading "other matters"? | No. Removal of a director is a serious matter that must be specifically stated in the notice of meeting; doing it under "other matters" makes the resolution unlawful. |
| Dika 2359/2567 (2024) | CCC Sections 420, 438, 1168 & 1169 | Is it lawful for a director of Company A to incorporate Company B in the same line of business while still in office, then route Company A's customers to Company B? | No. It breaches the duty not to compete under Section 1168 and is a tort under Section 420. Damages payable; the competing company cannot be forced to dissolve. |
| Dika 1041/2558 (2015) | Criminal Procedure Code Sections 2(4), 5(3), 28(2), 39(2); CCC Section 1169; Penal Code Section 353; 1956 Act Section 41 | Where directors misappropriate company assets, can a shareholder file a criminal complaint on behalf of the company, and does a generic "settlement" resolution in a general meeting extinguish criminal liability? | Yes, the shareholder can file the criminal complaint, and no, a vague settlement resolution is not a valid criminal compromise. |
| Recent Supreme Court guidance | Same statutory backbone | How should the courts read these duties together in close-corporation disputes? | Strictly, in favour of shareholder protection where directors abuse the management mandate. |
The remainder of this article examines each judgment in detail, explains the law it crystallises, and draws out what it means for businesses doing business in Thailand. Footnotes to authoritative Thai sources, including the Department of Business Development at the Ministry of Commerce and the Office of the Court of Justice, are embedded throughout.
Dika 4456/2566: A Director Cannot Use Company Property as Their Own
In Dika 4456/2566, decided by the Supreme Court's Commercial and Economic Division, a director of an oil palm company that operated on a national forest reserve concession had been ordered, by an interlocutory injunction of the Court of Appeal Region 8, to collect the palm fruit on disputed plots, sell it, deduct expenses, and deposit the net proceeds with the court together with the account books, month by month. Instead, the director farmed out the harvest to outsiders for "compensation," collected the money personally, and used it for his own purposes. He also unilaterally cut down twenty palm trees and dug drainage canals without consulting the other directors.
What the Supreme Court Said
The Court held that a director who farms out the company's productive assets and pockets the consideration is, in substance, selling the company's harvest. The money is the company's money, and it must be paid into court as the interlocutory order required. Using it personally is a wrongful act under Section 420 of the Civil and Commercial Code, and the shareholder who sued was a proper plaintiff under Section 1169, because the company itself, dominated by the wrongdoing director, had refused to act.
The Court also confirmed that managing the planting and cutting of palm trees, which was the company's core business objective, was a "significant" matter that could affect the company's revenue. A single director, even one with signing authority, cannot unilaterally cut down twenty trees and dig canals; the other directors had to be consulted. Acting alone, in a way that caused damage to the company, was held to be a tort and a breach of the director's mandate.
Why It Matters
The judgment closes a loophole that some directors of family-style Thai companies had used for years: contracting out the day-to-day work to a friendly third party, taking a cut, and claiming the company had simply "not produced" that year. The Supreme Court was clear: the source of the money is the company's productive asset; the money belongs to the company; the director cannot intercept it. The decision is also a reminder that a director with sole signing authority does not have sole decision-making authority. On a matter that affects the company's main business, the board must act collectively.
For any investor who has put money into a Thai limited company and is concerned about directorial overreach, Dika 4456/2566 confirms that what a shareholder can do against a director in a Thai private company includes not just an internal remedy but a direct claim, on behalf of the company, before the civil courts.
Dika 3413/2560: The "Other Matters" Loophole Is Closed
Dika 3413/2560 dealt with a hotel-operating company. A shareholder, who was also a director and one of six administrators of the estate of a deceased major shareholder, was removed from the board at a general meeting held on 25 April 2013. The agenda of the meeting, as set out in the notice sent to shareholders, listed four items: minutes of the previous meeting; approval of the audited accounts; appointment of auditors; and "other matters (if any)". Under the "other matters" heading, the meeting voted to remove the plaintiff as a director.
What the Supreme Court Said
The Court anchored its analysis in Section 1175 paragraph two of the Civil and Commercial Code, which requires the notice of meeting to state the nature of the business to be considered. The point of that requirement, the Court emphasised, is to allow shareholders to prepare, to formulate questions, and to take advice before voting. "Other matters (if any)" is acceptable for minor questions of the day, but it cannot be used to push through significant decisions.
Removing a director is, in the Court's words, a serious matter that directly affects the interests of shareholders, because it changes the identity of those who control the company on their behalf. Section 1151 reserves removal to the general meeting precisely because of that significance. A general meeting that votes to remove a director under the cover of "other matters", without that item appearing in the notice, has acted contrary to law. The resolution is invalid, and the related changes filed at the Department of Business Development can be cancelled.
Why It Matters
This decision is in harmony with earlier authority, including Dika 9127/2559, which the Department of Business Development cites in its own guidance on the management of limited companies. Both rulings confirm that the "other matters" agenda heading is a narrow channel reserved for housekeeping, not a back door for board reshuffles. Anyone who has been removed under such a heading should obtain a copy of the meeting notice immediately and consider whether to file a petition under Section 1195 to set aside the resolution. The deadline is short, just one month from the date of the resolution.
If you are conducting corporate due diligence on a target Thai company, board changes voted under "other matters" should be flagged immediately as a potential ground for unwinding the change. A clean chain of valid resolutions is a basic indicator of a well-run company.
Dika 2359/2567: The Duty Not to Compete Has Real Bite
Dika 2359/2567 is the most commercially significant of the recent set. A Japanese-Thai joint venture, formed in 2012 to manufacture car-seat frames and related automotive parts, was at the centre of the dispute. The Japanese parent was the 51 percent majority shareholder. The Thai parent was the 48 percent minority. In 2017, the Japanese parent terminated the joint venture, and through its president and one of its trusted Thai employees, set up a new Thai company in essentially the same line of business. Within months, the joint venture's largest customer, an automotive group, had rerouted its orders to the new company.
What the Supreme Court Said
The Court worked through the case carefully. On Section 1168, the question was whether the new company really competed with the joint venture. The defendants argued that the products were different and that the new company had not yet generated revenue when the director resigned. The Court rejected both arguments. Date of incorporation, not date of first invoice, is the moment a company is said to commence business. And similarity of business is judged on broad commercial terms, not on a narrow comparison of model numbers. When the same large customer that bought from one entity starts buying the same category of parts from the second entity, the two businesses are competing.
Once Section 1168 is engaged, two consequences follow. First, the director who set up the rival company while still serving on the board has breached the statutory duty and is liable to the joint venture in damages. The Court treated the breach as simultaneously a tort under Section 420. Second, the rival company, having joined in the scheme and benefited from it, is jointly liable as a co-tortfeasor. The Court held all three defendants, the director, the trusted Thai employee who acted as co-founder, and the new company, jointly liable for the resulting loss. Damages were assessed under Section 438, which gives the court discretion based on the gravity of the wrong, at THB 1,000,000 plus default interest.
Significantly, the Court refused to order the rival company to dissolve or to delete the competing objects from its registered objectives. The remedy for breach of Section 1168 is monetary, not corporate. The wronged company can recover damages; it cannot use Section 1168 as a sword to drive a competitor out of the market.
Why It Matters
For inbound investors, Dika 2359/2567 is a sharp reminder that the duty not to compete is not a polite suggestion. A foreign parent that wants to exit a Thai joint venture and continue in the same business by itself must terminate the joint venture cleanly, allow the director to resign and register that resignation before incorporating any competing entity, and avoid using personnel who are still tied to the old joint venture. The sequencing matters. Done out of order, what looks like a graceful exit can become an expensive tort.
The judgment is also a guide for minority shareholders. If you are the minority in a 51-49 joint venture and the majority's representatives have started a parallel business in Thailand, you may have a direct civil claim and a derivative claim under Section 1169. Speak to a Thai lawyer early, document the customer migration, and preserve the corporate paper trail.
Whether you are setting up a joint venture in Thailand, unwinding it, or planning a corporate restructuring, the lesson is to map the directors' duties first and the commercial steps second.
Dika 1041/2558: Shareholders Can Bring Criminal Proceedings When the Company Will Not
The fifth judgment, Dika 1041/2558, is the criminal counterpart to the civil rules just described. The plaintiff was a shareholder of a Thai sporting-goods company. Three of the directors, who had joint signing authority for the company, had misappropriated its assets. The company itself could not realistically file a criminal complaint, because the very people who would have to authorise the filing were the alleged wrongdoers. The directors argued that a general-meeting resolution to "cease litigation and end disputes between shareholders and the directing board" amounted to a criminal compromise that extinguished the case.
What the Supreme Court Said
The Court ruled for the shareholder on both points. First, on standing. Under Section 5(3) of the Criminal Procedure Code, read with Section 4 of the Act on the Establishment of the Provincial Courts and the Criminal Procedure in Provincial Courts B.E. 2499, criminal complaints on behalf of a juristic person are filed by its manager or other representatives. Where those representatives are themselves the alleged wrongdoers, they will not file the complaint, and the juristic person is effectively paralysed. The Court held that Section 1169 of the Civil and Commercial Code, by allowing a shareholder to bring a derivative action when the company refuses, extends to this criminal context. A shareholder with an economic interest aligned with the company is an injured party who may file the criminal complaint, and the complaint is treated as filed on behalf of the company.
Second, on the alleged compromise. The Court parsed the wording of the general-meeting resolution. It did not contain any clear statement that shareholders, including the plaintiff, agreed not to pursue criminal action against the wrongdoing directors. A criminal compromise under Section 39(2) of the Criminal Procedure Code must be specific and unambiguous. A general pledge to "cease the dispute" cannot strip a victim of the right to bring a criminal case, particularly where the offence, here misappropriation under Section 353 of the Penal Code and the dedicated offence under Section 41 of the 1956 Act on Offences Relating to Companies, was the very dispute supposedly being settled.
Why It Matters
Dika 1041/2558 is the cornerstone for a shareholder facing a board that has captured the company. Without the rule it lays down, a wrongdoing board could ensure impunity simply by refusing to authorise a criminal complaint against itself. The judgment also warns drafters of settlement resolutions and shareholders' agreements that vague waivers will not be read as criminal compromises. If a settlement is intended to bar criminal action, it must say so in unmistakable terms, and the offence must be one that the law permits to be compromised in the first place. Many of the most serious corporate offences, including breaches of Section 41 of the 1956 Act, are non-compoundable.
If you are caught in this situation, your Thai counsel will typically pair a civil action under Section 1169 with a criminal complaint. The civil action recovers money. The criminal complaint creates leverage and, where the facts support it, exposes the directors to personal liability of a different order. Our commercial and corporate disputes and economic crime teams handle these dual-track cases routinely.
The Common Theme: A Coherent Doctrine of Director Accountability
It would be a mistake to read these five judgments in isolation. Read together, they describe a single doctrine that the Supreme Court is articulating, case by case, on how Thai law disciplines director conduct in private limited companies.
The doctrine has four limbs.
The first limb is the duty itself. Section 1168 is read substantively, not formally. A director is held to the standard of a careful businessman, on every matter that materially affects the company's revenue or core business. Section 1168 paragraph two has been treated as a hard rule against parallel business, with similarity of business judged in commercial terms.
The second limb is liability for breach. The Court has freely combined the duty under Section 1168 with the general tort liability under Section 420. The two are alternative bases for the same factual conduct, and damages are assessed under Section 438. The remedy is monetary; injunctive relief against the wrongdoing director can be ordered, but not against a separate company merely because it benefited from the breach.
The third limb is shareholder standing. Section 1169 is given a broad and practical reading. The Court has applied it civilly (Dika 4456/2566, Dika 2359/2567), and criminally (Dika 1041/2558), to ensure that a wrongdoing board cannot defeat accountability simply by refusing to authorise litigation against itself.
The fourth limb is procedural integrity at shareholder meetings. Section 1175 paragraph two is taken seriously. The "other matters" agenda heading cannot be used to ambush shareholders with important decisions, and the right to remove a director under Section 1151 must be exercised with full notice. Procedurally defective decisions can be reversed under Section 1195 within the one-month window, or, where no real meeting actually took place, attacked outside that window under the general ten-year prescription period set out in Section 193/30 of the CCC, following Dika 5402/2562, as the Department of Business Development confirms in its own guidance.
The thread that runs through all four limbs is a tilt toward minority and outside shareholders. The Court is reading the statutory framework of 1925 in light of the realities of modern Thai close corporations, where minority shareholders often face a dominant founder or majority family who control both the board and the day-to-day operations.
How This Fits Into the Thai Legal and Business Environment
Thailand's economy is built overwhelmingly on private limited companies. Department of Business Development statistics, published on dbd.go.th, show that the limited company is by far the most common form of business entity registered each year, both for domestic ventures and for inbound foreign investment through Thai-registered subsidiaries, joint ventures, and BOI-promoted projects. Foreign investors typically operate either via a wholly-owned branch office, through a Thai-shareholder joint venture, or via a foreign-majority limited company under the US Amity Treaty, the TAFTA framework, or BOI promotion.
In every one of these structures, the locus of operational power is the board of directors. The shareholder agreement may say one thing, but as a matter of Thai law, it is the directors who sign the contracts, hold the bank mandates, and represent the company before authorities. The five judgments examined here matter precisely because they govern how that operational power is checked. They are particularly relevant in four common scenarios that we see at our firm:
- Family-style Thai companies. A founder-director controls a Thai-only company. Minority shareholders, often siblings or children, suspect that the director is siphoning value out of the operating company through related-party transactions or off-the-books production. Dika 4456/2566 is the template here.
- Foreign-Thai joint ventures. A 51-49 joint venture sours. The majority's representatives quietly set up a parallel Thai entity. Dika 2359/2567 is now the leading case.
- Boardroom coups. A faction calls a general meeting and removes a director under cover of "other matters." Dika 3413/2560 is the answer.
- Outright misappropriation. Directors empty the corporate bank account. The board will not authorise a criminal complaint against itself. Dika 1041/2558 is the route to a criminal prosecution.
For each scenario, the underlying lesson is the same: directors run the company, but they do not own it. Both Thai law and Thai courts are now firm on that point.
Practical Guidance for Directors, Shareholders and Investors
The judgments translate into concrete, do-this-now action items for each role around the boardroom table.
If You Are a Director
Do not assume that signing authority equates to decision-making authority. On any matter that materially affects the company's revenue or core business, document the consent of your fellow directors. Avoid serving on the boards of two companies in the same line of business; if you must, obtain written consent from the general meeting under Section 1168. Treat company funds as the company's; if you are an investor-director taking a return from a related entity, structure it as a properly disclosed related-party transaction, not as a personal collection of company revenue.
If You Are a Shareholder
Read every notice of meeting carefully. If a major decision appears to be hidden under "other matters", flag it before the meeting, write to the chairman, and reserve your rights. After the meeting, if a significant resolution was passed without being on the agenda, consider filing a petition to set it aside under Section 1195. The window is short, one month from the date of the resolution. Where a director is causing financial damage to the company, demand action under Section 1169; if the board refuses, you can sue in your own name on behalf of the company. Pair the civil action with a criminal complaint where misappropriation is involved.
If You Are an Inbound Foreign Investor
Before forming a Thai company or buying into one, conduct full corporate due diligence, including a careful review of past board resolutions and shareholders' meetings. Look in particular at how directors have been appointed and removed. Negotiate a shareholders' agreement that complements, rather than contradicts, the CCC: reserved matters, board composition, deadlock breakers, and a clear non-compete provision binding on the directors who are nominated by each side. Anticipate a 51-49 dispute the way you would anticipate a contractual breach.
If You Are Drafting a Settlement
If the parties intend a criminal compromise, name the offences and the alleged conduct in clear terms, and verify that the offences are compoundable. A generic "the parties cease their dispute" clause will not, on the authority of Dika 1041/2558, prevent a shareholder from later filing a criminal complaint for misappropriation. Where the offence is not compoundable in any event, no clause can do the job.
The Procedural Toolkit at a Glance
The next table summarises the procedural avenues available to shareholders and companies in disputes of this kind.
| Goal | Statutory Basis | Limitation Period | Forum |
|---|---|---|---|
| Set aside an irregular meeting resolution | CCC Section 1195 | One month from the date of resolution | Civil Court |
| Declare a fake meeting void | CCC general rules, following Dika 5402/2562 | Ten years (Section 193/30) | Civil Court |
| Damages from a director (direct corporate action) | CCC Sections 420, 438, 1168 | One year from knowledge of the wrongful act and the person liable (Section 448) | Civil Court / Commercial & Economic Division |
| Derivative civil action by shareholder | CCC Section 1169 | Same as the underlying claim | Civil Court / Commercial & Economic Division |
| Criminal complaint for misappropriation | Penal Code Section 353; Section 41 of the 1956 Act on Offences | Standard Penal Code limitations by offence severity | Criminal Court / Court of Justice prosecution |
| Interim protective relief | Civil Procedure Code Section 254 et seq. | Available from filing through final judgment | Civil Court |
Choosing the right combination of these tools, and sequencing them correctly, is what distinguishes a well-run case from one that drains the client without producing a result.
The Conclusion: A Strict but Reasoned Doctrine
The five Supreme Court judgments discussed here do not invent new rules. They apply the existing framework of the Civil and Commercial Code, the Penal Code, the Criminal Procedure Code and the 1956 Act on Offences Relating to Companies, in a way that is consistent with the original intent of those statutes and with the modern reality of how Thai private companies operate.
The major premise, that directors run the company under a mandate and owe specific duties to it, is restated. The minor premise, that the directors before the courts in each case acted outside that mandate, is established on the facts. The conclusion, that the law provides shareholders and the company itself with civil and criminal remedies that the courts will enforce, is the practical message that every business owner, investor and director should take from the cases.
If you are facing a director who has crossed the line, or you are a director who would like to make sure you have not, the team at Juslaws & Consult would be glad to help. Our litigation, corporate and economic-crime departments work together on disputes of this kind every week. Contact us through our contact page or speak directly with one of our lawyers. For background reading on the broader framework, see also rights protection of minority shareholders in Thailand and what a shareholder can do against a director in a Thai private company.
Frequently Asked Questions
What is a shareholder derivative action under Thai law?
A shareholder derivative action is a lawsuit brought by a shareholder, in the shareholder's own name, on behalf of the company. The statutory basis in Thailand is Section 1169 of the Civil and Commercial Code. It is available when the company has suffered damage caused by its directors and the company itself refuses or fails to sue them. Any shareholder, regardless of shareholding size, may bring the action. The Supreme Court has confirmed, in Dika 1041/2558, that the rule also applies to criminal complaints where the wrongdoing directors are the very persons who would otherwise have to authorise the filing of the complaint.
Can a director of a Thai company also sit on the board of a competing company?
Only with the consent of the general meeting of shareholders. Section 1168 paragraph two of the Civil and Commercial Code forbids a director from undertaking commercial transactions of the same nature as, and competing with, the business of the company, whether on the director's own account or on behalf of a third party. The same paragraph forbids being an unlimited-liability partner in a competing business. Dika 2359/2567 confirmed that this duty is read in commercial terms, not in narrow product terms, and that breach gives rise to liability in damages under Section 420 and Section 438, jointly with anyone who knowingly took part in the scheme.
How can a director be removed from a Thai private limited company?
By a resolution of the general meeting of shareholders, as provided by Section 1151 of the Civil and Commercial Code. The notice of meeting must specifically state that removal of a named director is on the agenda, in line with Section 1175 paragraph two. Removal cannot be voted on under the generic heading "other matters (if any)". A resolution voted in breach of these rules is unlawful and can be set aside by petition within one month, under Section 1195. Both Dika 3413/2560 and Dika 9127/2559 establish this position, and the Department of Business Development relies on the same line of authority in its published guidance.
What deadline applies to challenging an irregular shareholders' meeting?
One month from the date of the resolution if the meeting actually took place but was conducted irregularly. The basis is Section 1195 of the Civil and Commercial Code. If the meeting never actually took place, and the minutes are a fabrication, the one-month deadline does not apply; the general ten-year prescription period in Section 193/30 of the CCC governs. The Supreme Court set out this distinction in Dika 5402/2562, as discussed in the Department of Business Development's own briefing note on the subject.
What damages can be recovered from a director who breaches their duties?
Damages are fixed by the court under Section 438 of the Civil and Commercial Code, taking into account the gravity of the wrong and all the circumstances. Default interest runs at 5 percent per annum from 11 April 2021, the date the emergency decree amending Sections 7 and 224 of the CCC took effect, or at any updated rate fixed by ministerial regulation, plus a margin of 2 percent per annum. For periods before 11 April 2021, the previous statutory rate of 7.5 percent per annum continues to apply, as both Dika 4456/2566 and Dika 2359/2567 make clear. The Court will not normally order a competing company to dissolve under Section 1168 (Dika 2359/2567); the remedy is monetary.
Can a settlement agreement bar a future criminal complaint against directors?
Only if the agreement is specific and the offence is one that the law allows to be compromised. A general resolution to "end disputes" between shareholders and the board is not enough. Dika 1041/2558 held that such language did not amount to a criminal compromise within the meaning of Section 39(2) of the Criminal Procedure Code, and the shareholder retained the right to file a criminal complaint for misappropriation under Section 353 of the Penal Code. In any event, certain offences, including under Section 41 of the Act on Offences Relating to Registered Partnerships, Limited Partnerships, Limited Companies, Associations and Foundations B.E. 2499, are not compoundable.
What protective measures can be obtained while litigation is ongoing?
The Civil Procedure Code, in Section 254 and following, allows a plaintiff to apply for interim protective measures, including seizure of assets, freezing orders, and orders restraining specific acts. In a director-misconduct case, an order of the kind issued by the Court of Appeal Region 8 in the matter that ultimately reached the Supreme Court in Dika 4456/2566, which obliged the company to collect produce, sell it and deposit the proceeds with the court, is a striking example. Practical experience suggests that interim relief is granted where there is clear evidence of ongoing harm to the company and a real risk that assets will be dissipated.
Where can I read the Thai Supreme Court judgments themselves?
The Supreme Court of Thailand maintains a public database of selected judgments at deka.supremecourt.or.th. Judgments can be cited by number and year, for example "Dika 4456/2566", and full Thai-language text is available. The Office of the Court of Justice also publishes scholarly articles on cases of general interest, and the Department of Business Development at the Ministry of Commerce regularly issues practical commentary on company-law decisions at dbd.go.th. For English-language access, our firm publishes commentary at News & Insights and can prepare certified translations of any specific judgment on request.
How does this differ from the rules for Thai public limited companies?
The rules discussed in this article apply to private limited companies governed by Book III, Title XXII of the Civil and Commercial Code. Public limited companies are governed by the separate Public Limited Companies Act B.E. 2535 (1992), as amended, which contains its own provisions on director duties, derivative actions, and shareholder meetings, and which imposes additional disclosure and corporate-governance obligations under the supervision of the Securities and Exchange Commission. Many of the underlying principles are similar, but the statutory text and the procedural steps are different, and listed-company directors face additional rules under the Securities and Exchange Act B.E. 2535.
How can Juslaws & Consult help with a director or shareholder dispute?
Our firm has a dedicated commercial and corporate disputes practice that handles director-liability cases, shareholder derivative actions, meeting challenges, and related criminal proceedings. We are routinely instructed in 51-49 joint-venture disputes, family-business succession fights, and private-equity exit conflicts. We work in English, Thai, French, Mandarin and Japanese. To start a confidential discussion, contact us through our contact page.
