Which Court Has Jurisdiction? Thailand or China When Foreign Partners Dispute Company Shares?

Registering a business partnership isn’t just about completing paperwork. From a legal standpoint, when business partners are from different countries such as a Chinese and a Thai national one key question often arises:
“If a dispute occurs, which country’s court has the authority to decide the case?”
This article explains the issue in simple terms, with real-world examples that often occur in international business operations.

Case Example: Thai–Chinese Partners with a Company in Thailand but Contract Signed in China

Mr. A, a Chinese citizen, and Mr. B, a Thai citizen, entered into a business contract in China. Later, Mr. A established a company in Thailand and allowed Mr. B to hold some shares, making him a business partner in the Thai company.
As the business grew, Mr. A, the real owner, decided that he should hold all the shares and wanted to sue to reclaim the shares from Mr. B.

This raises the question:
Should the lawsuit be filed in a Thai court or a Chinese court?
The answer depends on legal principles governing company registration and jurisdiction in each country.

Legal Principle: Jurisdiction (“Which Court Has Authority”)

The first issue to consider is which country the dispute directly concerns. For example:

• If the dispute relates to the business contract made in China, such as profit sharing or investment terms, then the case falls under Chinese jurisdiction.
• But if the dispute concerns shares in a company registered in Thailand, regardless of who the shareholders are, it must be filed in a Thai court, as it concerns a Thai legal entity governed by Thai law.

Therefore, if the shares in question belong to a company registered in Thailand, even if the agreement originated in China, the case should be brought before a Thai court.

Importance of Proper Company Registration

This case highlights how proper company or partnership registration directly affects jurisdiction and shareholder rights.

If Mr. A and Mr. B had clearly specified the governing law and jurisdiction clause in their initial contract for instance, naming which court would handle disputes the matter would have been simpler.
However, many business partners overlook this step, forcing courts to later determine where the dispute arose and which court has jurisdiction.

That’s why, when registering a company or partnership, especially one involving foreign investors, it’s essential to have a lawyer experienced in international law review the agreement to prevent future conflicts over jurisdiction and shareholder rights.

Filing a Lawsuit to Reclaim Shares in a Thai Company

In the above case, since the company is registered in Thailand, a lawsuit to reclaim the shares must be filed in a Thai civil court, such as:

• A petition to remove an unlawfully listed shareholder,
• A lawsuit to transfer the shares back, or
• A claim to recover dividends or benefits derived from the shares.

The Thai court will consider the case under the Civil and Commercial Code, along with corporate documents such as the company’s Articles of Association, shareholder list (Bor Chor 5), and proof of share payment.

If Mr. A also claims that the original contract made in China was breached, he may file a separate lawsuit in China, though its judgment will not directly affect the Thai share registry unless formally recognized by a Thai court, a process that can be complex and time-consuming.

Understanding “Two Legal Systems” in Cross-Border Business

International business partnerships require understanding both countries’ legal systems.
For example, if a Chinese national invests in Thailand, Chinese law may impose restrictions on foreign investment or currency transfers. Therefore, having a legal team familiar with both Thai and Chinese law is crucial to structuring the business properly and avoiding legal risks.

Wongsakorn Law Office Your Legal Partner in Thailand and China

If you or your company are facing disputes involving foreign shareholders or shares in a Thai-registered company, consult with a lawyer experienced in company registration and international business law.

Wongsakorn Law Office has a team of experts in both Thai and foreign law including Chinese lawyers based in our firm  who can handle and coordinate cases both in Thailand and China professionally.

Whether your case involves company registration, share transfer, or shareholder disputes,
We’re ready to represent and assist you across both Thailand and China.