The declaration of intention to extinguish obligations by set-off in Administrative Contract

Abstract

     Set-off operates as a means of extinguishing obligations in which both parties are debtors and creditors of each other, and the amounts owed correspond. The legal effect of set-off is that the obligations are discharged from both parties; therefore, it can be seen that the extinguishment of obligations by set-off essentially depends upon the intentions of both parties. The Administrative Court procedure recognizes the declaration of intention by the parties in the form of specified reliefs sought by the plaintiff in a submission of a claim or counter-claim. In addition, Administrative Court procedure also recognizes the declaration of intention by the parties where there is no specified relief sought but the parties admit or deny the matter of a certain fact or law in the pleading. In this latter case, the declaration of intention clearly conveyed in the pleading is sufficient to be recognized by the court without the need to submit a plaint or counter-claim. Consequently, the question regarding whether the extinguishment of obligation by set-off in the Administrative Court proceeding can be applied only when the parties file a plaint or counter-claim seeking a relief to set-off their debt or not must be addressed.

     This article examines Italian law regarding the extinguishment of an obligation by set-off in a court proceeding which grants the court the power to ascertain the sum of the debts and adjudicate by setting off those debts as requested by both parties without the need to file a new case with the court. In other words, each party does not have to file separate plaints to acquire the court judgments ascertaining the amount of debt and eventually compensate each other accordingly afterward since the court can extinguish the obligations by set-off. By examining Italian law regarding the extinguishment of obligation by set-off in the court proceeding, this article aims to resolve some unsettled issues presented in Thai Administrative Court procedure regarding the extinguishment of obligation by set-off by the Court. The issues addressed in this article can range from the matter of the Court’s power to determine any decree in the judgment to the matter of Court fees in the case where there is no separate plaint or counter-claim filed with the Court. Moreover, the most prominent issue that this article aims to address is whether mere declarations from both parties admitting that they owned certain debts to each other can be deemed as a specific denial of the existence and amount of debts, which means that those debts are still in dispute and not capable of being set off against each other. For Thai Administrative Court to be able to ascertain the amount of debts arising from an administrative contract and exercise a set-off in judicial proceeding on debts that are still in dispute, it is argued in this article that the Court can conduct the proceeding by identifying the issue for the parties to further submit explanations regarding the debts incurred between parties and granting the parties the opportunities to make a declaration of intention in the form of a supplementary plaint or counter-claim seeking a decree for those debts in the judgment. By doing so, the Court exercises its power in accordance with the Administrative Court procedure, which enables the set-off in a judicial proceeding to deliver justice to both parties and uphold the essence of the set-off principle.