The Petitioner’s legal counsel Aji Setiadi at the preliminary hearing for the judicial review of Law No. 30 of 1999 on Arbitration, Monday (9/30/2024). Photo by MKRI/Bayu.
JAKARTA (MKRI) — PT Tanjung Bersinar Cemerlang, a coal export company, has filed a material judicial review petition of Article 67 and Article 68 paragraphs (1) and (2) of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (Arbitration Law) to the Constitutional Court (MK). Its executive director Eric Kurniadi revealed that the company has suffered constitutional impairment due to the enforcement of the a quo articles on international arbitration disputes.
“At the moment, the Petitioner is working out a dispute with a foreign company through the Singapore International Arbitration Centre (SIAC),” said legal counsel Aji Setiadi at the preliminary hearing on Monday, September 30, 2024 in the plenary courtroom.
He explained that the coal trade company has made many purchase and sales contracts with domestic and overseas companies. In coal purchase and sale contracts, arbitration is generally chosen for dispute resolution.
It depends on negotiation between the parties to the contract whether to go to arbitration domestically such as through the Indonesian National Arbitration Board (BANI), or overseas such as through the SIAC or the International Chamber of Commerce (ICC). In the event that the coal buyer is a foreign party, it is almost certain that a foreign board such as the SIAC or ICC will be chosen.
In an arbitration dispute at SIAC, the claimant may win or lose. If they win, they will be able to apply for recognition, enforcement, and execution of the SIAC arbitration award in the country of the counterpart’s domicile or wherever the counterpart has assets. This is possible because arbitral awards rendered in a country can in principle be recognized and enforced in all other countries that have ratified or acceded to the 1958 New York Convention, currently around 172 countries including Indonesia.
Similarly, if the claimant loses the dispute at the SIAC, the SIAC arbitral award in question, which is an international arbitral award for Indonesia, will be able to be recognized, enforced, and executed in Indonesia against the claimant. In Indonesia, the recognition and enforcement of international arbitral awards are regulated in Articles 65 to 69 of Law No. 30 of 1999. Based on Article 65, the authority to deal with the recognition and enforcement of international arbitration awards lies with the Central Jakarta District Court.
Based on Article 66 letter d, the international arbitration award can be executed in Indonesia after obtaining an order of execution from the chief judge of the Central Jakarta District Court. To obtain it, the award must be submitted and registered with the chief registrar of the Central Jakarta District Court and only after that can the winning party submit a request for enforcement to the chief judge of the Central Jakarta District Court.
In practice, the chief judge of the Central Jakarta District Court did not treat the “application” for enforcement as referred to in Article 67 as an “application of a contentious nature” even though according to Article 68 paragraphs (1) and (2) the product or result of the request is a “decision” either in the form of a decision granting enforcement or rejecting the request for enforcement, so as a result, the respondent for enforcement was not summoned at an open, public hearing and the decision was not pronounced at such a hearing. Even before the enactment of the Supreme Court Regulation No. 3 of 2023, the product of an “application” ex Article 67 of Law No. 30 of 1999 was a “decree” not a “decision.”
The Petitioner argued that the implementation of Article 67 and Article 68 paragraphs (1) and (2) by the Central Jakarta District Court and/or the Supreme Court is contrary to the substance and norms contained therein, in the context of arbitration law and civil procedure law as a whole. Therefore, they argued that the interpretation of the word “application” in Article 67 and the word “decision” in Article 68 paragraphs (1) and (2) by the chief judge of the Central Jakarta District Court and/or chief justice of the Supreme Court, which could potentially harm the Petitioner’s constitutional rights, needs to be interpreted by the Constitutional Court.
In addition, based on Article 68 paragraph (1), if the application for execution is granted by the Central Jakarta District Court, the respondent cannot file an appeal or cassation, but on the contrary, based on Article 68 paragraph (2), if the application for execution is rejected, the applicant can file a cassation. The Petitioner argued that Article 68 paragraph (1) discriminate between the execution applicant (which is generally a foreign party) and the execution respondent (which is generally an Indonesian party) due to the phrase “cannot be appealed or cassated”.
“The phrase could potentially violate the Petitioner’s rights if Article 68 paragraph (1) of Law No. 30 of 1999 is not given a constitutional interpretation by the Constitutional Court, that the phrase must be declared unconstitutional unless it is interpreted as ‘against which a cassation can be filed,’” said Aji.
In the petitums, the Petitioner asked the Court to declare the following unconstitutional and not legally binding: the word “application” in Article 67 if not interpreted as “contentious application;” the word “decision” in Article 68 paragraphs (1) and (2) if not interpreted as “decision pronounced at an open, public hearing;” the phrase “cannot be appealed or cassated” in Article 68 paragraph (1) if not interpreted as “against which a cassation can be filed.”
Justices’ Advice
The hearing for case No. 131/PUU-XXII/2024 was presided over by Constitutional Justices M. Guntur Hamzah (panel chair), Enny Nurbaningsih, and Asrul Sani. The justices highlighted the petition’s format, which needed much revision following the Constitutional Court Regulation (PMK) No. 2 of 2021.
Justice Enny said the Petitioner could elaborate briefly their concrete case as introduction to the petition. However, she urged them to explain their constitutional impairment due to the enforcement of the norms clearly as well as the causality between the impairment and the enforcement of the norms.
“Only then do [you] conclude that the Petitioner has legal standing. This can be elaborated one by one or with a narration, but the elaboration is required. [The current petition] talks more of the concrete case, but the elaboration of the impairment of constitutional rights is not yet comprehensive,” she explained.
Author : Mimi Kartika
Editor : Lulu Anjarsari P.
PR : Raisa Ayuditha
Translator : Yuniar Widiastuti (NL)
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.
Monday, September 30, 2024 | 15:44 WIB 108