Legal Issues in the Enforcement of Security Interests through Public Auction Pursuant to Section 40 of the Business Security Act B.E. 2558

Abstract

This study aims to examine the legal problems and practical obstacles in the enforcement of business collateral under Section 40 of the Business Collateral Act B.E. 2558 (2015), and to analyze why public auction enforcement mechanisms are rarely utilized in practice. Although the Act was enacted to enhance access to credit by allowing non-possessory and non-registered movable assets to be used as collateral, its effectiveness in practice remains limited. A qualitative documentary legal research methodology was employed. The study analyzed statutory provisions, ministerial regulations, academic literature, legal textbooks, and relevant legal documents concerning collateral enforcement. The population consisted of all relevant legal texts and academic sources, while the sample was selected through purposive sampling based on relevance to the research objectives. The research instrument was a documentary analysis form, and data were examined using content analysis combined with legal interpretative methods.

The findings reveal that, despite the legislative intention to facilitate access to finance and broaden the scope of usable collateral, the enforcement mechanism under Section 40 remains problematic in practice. Three major issues were identified. 1) The requirement for delivery and possession of collateral imposes additional costs and management burdens on the secured creditor. 2) The lack of clear procedural guidance regarding “public auction” results in legal ambiguity, as the Act does not specify standardized procedures nor allow parties sufficient contractual flexibility to determine alternative enforcement methods. 3) The provision allowing objections to sale prices by reference to civil execution procedures creates legal uncertainty, particularly because the referenced procedural provisions have been repealed. These legal uncertainties have contributed to low utilization of the statutory enforcement mechanism, with creditors often preferring to pursue claims as ordinary creditors through court litigation. The study highlights the need for legislative clarification and procedural reform to improve legal certainty and enhance the practical efficiency of secured transactions under the Act.