INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Theodoor Bakker, Ulyarta Naibaho and Adithya Lesmana, ABNR Counsellors at Law
ABNR Counsellors at Law Graha CIMB Niaga 24th Floor Jl. Jenderal Sudirman Kav. 58 Jakarta 12190 Indonesia Tel: +62 21 25 5125 Fax: +62 21 250 5001
Email: info@abnrlaw.com Web: www.abnrlaw.com
1. General 1.1 Prevalence of Arbitration
In its elucidation, Law No 30 of 1999 on Arbitration and Alternative Dispute Resolution (the “Arbitration Law”) identifies a number of other general principles that distinguish arbitration from the administration of justice through state courts, which it seeks to secure with this law. These include: • the speedy nature of arbitration due to an absence of procedural and administrative restrictions; • the ability to select arbitrators with specific exper - tise with regard to the matter in dispute; and • the possibility of selecting a legal regime best suited to the parties for the purposes of the issue in dispute. Foreign contract parties will often choose arbitration, as judgments of foreign courts are not enforceable in Indonesia but foreign arbitral awards are, if certain conditions are met. A positive trend affecting arbitration in Indonesia is the modernisation of arbitral procedures, with the increasing use of electronic filing and other informa - tion technology. A further positive trend is the increas - ing number of Indonesian professionals available to act as arbitrators. Moreover, increased foreign direct investment in Southeast Asia has led to growth in the demand for dispute resolution services in the region, and Indonesia has had its share in that growth. 1.2 Key Industries Commercial arbitration is increasingly used in the infrastructure development, construction, technology and communications, mining and natural resources,
International arbitration is increasingly being chosen as a method to resolve disputes in Indonesia, but the total number of disputes for which arbitration is cho - sen still lags behind the number submitted to the gen - eral courts in Indonesia. One of the reasons for this is a measure of unfamiliarity with arbitration as a dispute resolution mechanism; another is the local infrastruc - ture for conducting arbitral procedures, which is still in an early stage of development. However, arbitration is becoming more broadly accepted, and the total number of commercial arbi - trations registered with the Indonesian National Board of Arbitration ( Badan Arbitrase Nasional Indonesia , or BANI), as the most prominent arbitration body in Indo - nesia, is gradually rising every year. By 2024, BANI had overseen more than 1,000 arbitration cases. When arbitration is chosen, it is generally believed that the positive drivers are: • the appointment of the arbitrators by the parties; • the confidentiality of the proceedings; • the final and binding nature of the award; • the flexibility of the procedure; • the professionalism and expertise of the arbitral tribunals; and • the comparative unattractiveness of cross-border dispute resolution through the courts.
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