Petitioner's expert, Yetti Komalasari Dewi, delivering her testimony on the judicial review hearing of Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution (AAPS Law) at the Plenary Courtroom, Monday (18/11). Photo by MKRI/Panji.

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JAKARTA, HUMAS MKRI - The Constitutional Court held another hearing on the judicial review of Article 1 number 9 of Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution (AAPS Law). The continued hearing of Togi M. P. Pangaribuan's petition, who works as an advocate and lecturer at the Faculty of Law, University of Indonesia, was held in the Plenary Courtroom of the Constitutional Court on Monday, November 18, 2024. In the sixth hearing of Case Number 100/PUU-XXII/2024, the Petitioner presented two experts, namely Yetty Komalasari Dewi and Nikki Krisadtyo, as well as a witness, Jou Samuel Hutajulu.

In her statement, Yetty Komalasari Dewi mentioned the consequences of the two definitions of international arbitration awards in Article 1 paragraph 9 of the AAPPS Law, which does not contain further explanation of the parameters of non-domestic arbitral awards. Article 66 letter a and Article 67 paragraph (2) letter c of AAPS emphasize that international arbitration awards are only foreign arbitration awards or only awards rendered outside Indonesia. As an illustration, Yetty gave an example of Supreme Court Decision Number 904K/PDT.SUS/2009, which, according to her, cannot be used as a legal source to fulfill the elements of Indonesian legal provisions contained in Article 1 point 9. This is because Indonesia does not adhere to the binding force of precedent as in common law countries.

More precisely, Yetty revealed that the limitation arrangements for non-domestic arbitration awards in other countries, such as Singapore, Malaysia, or the UNCITRAL Model Law, do not include foreign elements as contained in the Supreme Court's decision. The existence of the foreign element parameter is then clearly applied as long as there is a foreign phrase in an arbitration case; then, it becomes the basis for interpreting an award into an international arbitration award.

“If there are parties who initially intended to make an arbitration process into a national arbitration award, but as a result of one of the shareholders or one of the directors related to an agreement that uses a foreign language, a court can suddenly interpret it as international arbitration,” Yetty explained.

Comparison with Other Countries

Meanwhile, Nikki Krisadtyo, an expert presented by the Petitioner, explained the provisions of International Arbitration Awards in the UK and compared them with several other countries that adhere to the common law legal system. Arbitration in the UK is regulated by the Arbitration Act 1996 (Arbitration Act), which does not adopt the UNCITRAL Model Law on International Commercial Arbitration.

Nikki mentioned that Articles 100 to 104 of the Arbitration Act specifically regulate the enforcement of international arbitration awards subject to the New York Convention. Upon an international arbitration award, a party may apply to the court to refuse the arbitration award enforcement based on the reasons set out in Article 103 of the Arbitration Act, as its provisions follow Article 5 of the New York Convention. Meanwhile, the enforcement of national arbitration awards is regulated in Article 66 to Article 79 of the Arbitration Act. So against a national arbitration award, continued Nikki, a party can file an objection which can result in the annulment of the arbitration award in accordance with Article 67 to Article 69 of the Arbitration Act.

“Although the Arbitration Act is 28 years old, norms in relation to arbitration continue to be developed through court decisions that have binding force in accordance with the principle of Stare Decisis adopted by common law countries. Currently, the UK is also in the process of revising the Arbitration Act and has been included in the UK Parliament's 2024 Legislation Program,” explained Nikki, who is a legal practitioner licensed as a Solicitor in the High Court of England and Wales and an advocate in Indonesia.

Regulation of International Arbitration Awards

Nikki then explained the nomenclature used in the Arbitration Act, namely the New York Convention Award. Article 100 paragraph (1) of the Arbitration Act limitatively regulates the New York Convention award to be an arbitration award made outside the territory of the United Kingdom of Great Britain and Northern Ireland. Based on Article 100 paragraph (1) of the Arbitration Act, it closes the possibility of an arbitral award made in the jurisdiction of the United Kingdom to be considered as an International Arbitration Award.

"Based on this, the UK adheres to the concept that the scope of an International Arbitration Award is solely determined by the place where the award is made. The courts in England have consistently ruled that an arbitration award is a national arbitration award as long as it is issued in England, even though there are international elements in the case concerned,” Nikki explained.

Arbitration Changes

Jou Samuel Hutajulu as a witness presented by the Petitioner recounted that the dispute between PT Lirik Petroleum against PT Pertamina Persero and PT Pertamina EP was related to the implementation of the Lirik EOR contract. In this case, PT Lirik filed a request for arbitration against Pertamina Persero and PEP to the ICC which was registered with Case Register Number 14387/JB/JEM or abbreviated as Lirik Arbitration Award. Consistent with the agreed seat of arbitration, in fact the arbitration hearing was held in Jakarta. After the trial and examination took place, in essence, PT Lirik' request was partially granted. As a follow-up to the decision, Samuel continued, the arbitration panel through its attorney registered the arbitration award to the Central Jakarta District Court on April 21, 2009 with Deed of Arbitration Award Registration Number 02/PDT/ARB-INT/2009/PN.JKT.PST which was followed up with Stipulation of Execution Number 4571 on April 23, 2009. However, the registered arbitration award was registered as an international arbitration award.

“For this reason, Pertamina filed a request for annulment of the arbitration award recorded in Case Number 01/Pembatalan Arbitrase/2009/PN.JKT.PST. In essence, the Judges of the Central Jakarta District Court rejected the request with the consideration that the Lirik arbitration award was an international arbitration award because it was handed down by the ICC Arbitration Court which is an International Arbitration institution based in Paris, France. The decision was upheld at the Cassation level Number 904K/PDT/2009 and Judicial Review Number 56/PK/PDT.SUS/2011,” Samuel said.

Also read:

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Two Main Issues of International Arbitration Implementation in Indonesia

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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