Deputy Chairman of Indonesia National Arbitration Agency (BANI), Prof. Huala Adolf, delivered a testimony as a related party during a judicial review hearing of Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution (AAPS Law/Arbitrary Law) at the Plenary Courtroom on Monday (4/11). Photo by MKRI/Panji.

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Jakarta, MKRI—Deputy Chairman of Indonesia National Arbitration Agency (BANI), Prof. Huala Adolf, explained two main issues regarding the implementation of international arbitration in Indonesia during a judicial review hearing of Case Number 100/PUU-XXII/2024. The case is to review Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution (UU AAPS/Arbitrary Law). The agenda of the hearing on Monday, November 11, 2024, was to hear testimonies from the House of Representatives and BANI as related parties.

“Based on our observations, basically, there are two main issues of the international arbitration implementation in Indonesia,” Huala said during the Plenary Hearing.

Two main issues are related to the requirements to implement arbitration awards and the length of the execution process of the petition to carry out the international arbitration awards in court. Huala said that the requirement to carry out the international arbitration submits to inefficient requirements, including in practice, among other things, the registration of international arbitration awards by the arbitrators or their representatives to the Registrar of the District Court of the Central Jakarta and the requirements to acquire statement letter from the diplomatic representative of the Republic of Indonesia in the country where an international arbitration award is issued, which state that the requesting country is bound to an agreement, both bilaterally and multilaterally to Indonesia related to the acknowledgment and implementation of International Arbitration Awards.

He said in practice it is not easy for applicants who want to request the enforcement of arbitration awards in Indonesia to convince foreign arbitrators (or through their attorneys) to register their arbitration awards with the Central Jakarta District Court. Foreign arbitrators generally consider that with the arbitration award they have issued, their duties as arbitrators are complete. The same applies to the applicant's efforts to obtain a certificate from the diplomatic representative of Indonesia in the country where the arbitral award was issued. This requirement also takes extra time to obtain.

Execution requirements that must be requested must first be registered at the Registrar of the Central Jakarta District Court. If the Central Jakarta Court assesses that the request for enforcement of the International Arbitration Award meets the requirements and does not violate the provisions of Indonesian law, the Court will grant this enforcement. Furthermore, the applicant again submits a request for enforcement so that the arbitration award can be ordered to be implemented by the respondent.

In addition, the Professor of the Faculty of Law at Padjajaran University also said that practice shows that it takes quite a long time, even up to months, to obtain enforcement and execution orders from the Central Jakarta District Court. To improve the above conditions, the Supreme Court has issued Supreme Court Regulation Number 3 Year 2023 on the Procedure for Appointment of Arbitrators by Courts, Implementation and Cancellation of Arbitration Awards. Article 16 (4) of this Supreme Court Regulation requires 14 days or 2 weeks from the time the request is registered for the President of the Central Jakarta District Court to decide whether to grant or deny the request for enforcement of the international arbitration award.

“The Supreme Court Regulation 2023 is still relatively new, so its effectiveness needs to be tested in practice. The main problem is the lengthy requirements that must be met by applicants to complete their execution requests and register them with the Central Jakarta District Court,” Huala said.

In addition, in August 2023, BANI submitted an Academic Paper (N/A) on the Amendment to Law No. 30/1999 to the Director General of Legislation of the Ministry of Law and Human Rights of the Republic of Indonesia. Against this Academic Paper, the National Law Development Agency has invited BANI to discuss the provisions of the amendment to the Arbitration Law. One of the provisions proposed to be amended is to replace Article 1 number (9) of the Arbitration Law with the formulation of international arbitration based on Article 1 number 3 of the UNCITRAL (United Nations Commission on International Trade Law) Model Law on International Commercial Arbitration.

On the other hand, Member of Commission III of the House of Representatives of the Republic of Indonesia I Wayan Sudirta, who represented the House of Representatives, testified in the hearing of this case, asking the Court to declare that the Petitioner did not have legal standing. He asked the Court to declare that Article 1 point (9) of Law Number 30 Year 1999 on Arbitration is not contrary to the 1945 Constitution of the Republic of Indonesia (UUD NRI) and still has binding legal force.

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At the preliminary hearing on Wednesday, August 7, the Petitioner argued that Article 1 point (9) of the AAPS Law, especially the phrase “which according to the provisions of the law of the Republic of Indonesia is considered an international arbitration award” is contrary to Article 28D paragraph (1) of the 1945 Constitution. He experienced actual and specific constitutional losses in several aspects, including in terms of his professions as a lecturer, where he has an obligation to teach arbitration law in theory and practice to students accurately, and as an advocate, where he is obliged to provide legal services in the form of litigation services and advice to clients.

The legal uncertainty in the AAPS Law has hindered the Petitioner from carrying out both professions. This is because it mixes up narrow and broad territorial concepts, so the Petitioner has difficulty determining which ones are classified as national arbitration awards and international arbitration awards based on Article 1 paragraph (9) of the AAPS Law.

Author: Sri Pujianti
Editor: Lulu Anjarsari P.
PR: Fauzan Febriyan
Translators : Rizky Kurnia Chaesario/Yuniar Widiastuti

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.

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