Thai Central Administrative Court axes on-going construction of high-rise condominium

Construction News

Thai Central Administrative Court axes on-going construction of high-rise condominium

DLA Piper has represented The Met Condominium Juristic Person and its co-owners (collectively, “The Met”) in a high-profile dispute, which resulted in a decisive victory on 27 September 2023 in the Thai Central Administrative Court (“Court”). The Met successfully challenged the approval of the Environmental Impact Assessment Report (“EIA Report”) in relation to the construction of a twin-tower condo project on a neighbouring plot of land on South Sathorn Road in Bangkok, known as the 125 Sathorn Project. Three regulatory agencies were involved in the dispute, with PMT Property Co., Ltd. (PMT) as the project developer and Interpleader. These agencies played a role in the approval of the EIA Report and the issuance of the project’s construction permit.

Key findings

The Court found that the Expert Committee’s (“EC”) resolution approving the EIA Report was not legitimate, because the measurements used to determine if planning regulations were being adhered to were not accurate. Had the EC been prudent and recalculated the measurements itself so that the correct measurements were indeed used, the specifications of the 125 Sathorn Project would never have been accepted, since they exceed the permissible limit allowed by the planning regulations.

The Court primarily based its findings on the Town Planning regulations’ ‘Designated Plot Rule’. The rule provides that where a plot of land has been utilised, and if that plot is then sub-divided or transferred, all the plots of land combined must not exceed the original floor-area-to-land-size ratio permitted. The 125 Sathorn Project’s plot of land was sub-divided from The Met’s plot of land, meaning that the project should have considered The Met’s floor area to ensure that the overall plot did not exceed the permitted ratio.

Further to these findings, the Court also found that the construction permit obtained was not legitimately issued. This is because it was issued on the basis of the EC’s resolution approving the EIA Report, which the Court found to be illegitimate.

Given these findings, the Court revoked both the EC’s resolution to approve the EIA Report and the construction permit. These revocations are to take effect retroactively from the time the resolution and the permit were granted.

Implications for future developments

This judgment clearly highlights how critically important it is for developers to pay close attention to the regulations from the outset of a construction project.

The judgment now calls into question what the project’s developers, PMT, and the property’s buyers will do with the commenced construction and partly sold units. The respondents may still appeal the decision within 30 days from the date of the judgment. However, if the appeal is unsuccessful or the appeal timeframe lapses, the Court’s judgment will be considered final. PMT Property will then need to adjust the design accordingly to comply with town planning and building regulations.

The DLA Piper team was led by Litigation and Regulatory Partner Don Rojanapenkul with support from Of Counsel Akyn Suttawatanadech, and Associate Prin Laomanutsak, all based in Bangkok.

Source: DLA Piper press release