What should a Consortium Agreement include under Thai law?

1. Definitions and Interpretation
2. Nature of the Consortium
3. Term
4. Exclusivity
5. Lead Member
6. Scope and Work Shares
7. Decision-Making
8. Costs and Securities
9. Liability
10. Payments
11. Members' Obligations
12. Anti-Bribery and Fair Competition
13. Withdrawal and Default
14. Confidentiality and Personal Data
15. Intellectual Property
16. Notices
17. Governing Law and Disputes
18. General

• This is an agreement between companies that bid together and each do their own part of one project. It does not create a new company or a partnership: the members do not share profits or losses (Clause 2.2). Under Thai law, a partnership is a contract to carry on business together with a view to sharing profits (Civil and Commercial Code section 1012). Keep your accounts and invoices consistent with that — each member books the income and cost of its own Scope.
• If you want to set up a company together and share its profits, you need a joint venture and shareholders' agreement instead.

• Read the tender documents against this Agreement. Many Thai government tenders prescribe their own joint-venture or consortium form, ask for a Thai-language version, set a minimum share for the lead member, or require each member's own qualifications. Sign what the tender requires, in the same content, and keep this Agreement for the relationship between the members (Clause 18.2 and Clause 18.8).
• Each member other than the Lead Member signs a power of attorney in the form the tender requires within 5 Business Days after the Lead Member asks (Clause 5.3). A power of attorney made in Thailand carries stamp duty of 10 THB for a single act or 30 THB for more than one act (Instrument 7 of the Stamp Duty Schedule).
• Approve the bid price and the final bid in writing by all members at least 2 Business Days before the Bid Deadline (Clause 7.4). Keep the signed approval — it is your evidence if the bid later turns out to be loss-making.
• Agree the budget for common costs early (Clause 8.1). Costs outside an approved budget stay with the member that spent them.

• You chose joint and several liability. The Project Owner may claim the whole of any debt under the Project Contract from any one member (Civil and Commercial Code section 291). That member must then recover from the member at fault under Clause 9.2 — so the other members' ability to pay matters as much as their technical skills.
• You chose several liability, where each member answers only for its own Scope. Use it only if the tender documents clearly allow it; otherwise the Project Owner's documents prevail and the members will be jointly liable anyway.
• Liquidated damages, retention and security calls are passed to the member that caused them (Clause 8.3 and Clause 10.2). Record every delay and its cause in the Steering Committee minutes as it happens.

• No stamp duty is payable on this Agreement. A consortium agreement is not listed in the Stamp Duty Schedule of the Thai Revenue Code. It is not a partnership agreement (Instrument 27), because the members do not share profits.
• The Project Contract itself may carry stamp duty, for example as a contract for hire of work, depending on its content. Check it when the contract is signed.

• Each member is taxed on the income from its own Scope (Clause 10.3).
• You chose to have the Lead Member receive all payments. If the members carry on the Project jointly and the income is received jointly, the Revenue Department may treat the consortium as a joint venture that is a separate taxpayer, with its own tax identification number, VAT registration and tax returns. Take tax advice before the first invoice. The Lead Member should keep the project account separate and pass each member's share on within … Business Days (Clause 10.1).
• You chose to have each member invoice the Project Owner for its own Scope. This is the simplest structure for tax, because each member issues its own tax invoice and receives its own withholding tax certificates. Confirm that the Project Owner accepts separate invoices.
• Government agencies and companies usually withhold tax from payments for services and hire of work, and may require a withholding tax certificate in the name of the member that receives the payment.

• A foreign company generally needs a Foreign Business Licence or a Foreign Business Certificate before it performs services or construction in Thailand, and its foreign staff need work permits. Clause 11.1(c) makes this each member's own responsibility. Apply early — the process can take several months.
• Documents from a foreign member (certificate of incorporation, power of attorney) are often required by the Project Owner in notarised and legalised form, with a certified Thai translation.

• Thai law punishes bribery of officials and collusion between bidders, and a company can be liable for a bribe paid by its representative if it had no proper internal controls. Clause 12 makes either an immediate Default.
• Keep a record of all gifts and hospitality to anyone connected with the Project Owner, and do not share bid prices with any other bidder.

• The signed Agreement with Schedule 1, the powers of attorney, and every Steering Committee decision on a Reserved Matter (Clause 7.2).
• The Bid as submitted, all communications with the Project Owner (Clause 5.1), and the payment certificates and distribution records.
• Emails used as notices, with the header showing the time sent and any bounce message.

• Each member should sign through the director or directors authorised in its latest company affidavit or home-country equivalent, and affix the company seal if its rules or the tender require one.
• Clause 18.7 allows electronic signatures unless the tender requires original signatures. For a government tender, sign in wet ink unless the tender says otherwise.

• A Thai court works in Thai. A member that relies on this Agreement or on English emails in a Thai court must file a Thai translation certified as accurate. As between the members, Clause 18.8 says the English text prevails.
• An arbitral award made in Bangkok can be enforced against a foreign member in most countries under the New York Convention of 1958.

Compiled from the notes that accompany the English contract templates on this site, published by Phuwara Krobtaku (ภูวรา ครอบตะคุ), Thai attorney-at-law, licence no. 477/2558. The short answer and summary at the top of this page are put together by the site from the template's clause headings and notes. Statutes are quoted only in the official Thai text: Thai is the only official language of Thai legislation, and an unofficial translation can mislead. Article registry OKC-6E5FB8. If you reuse this content, please credit the author and link to the original.