INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Theodoor Bakker, Ulyarta Naibaho and Adithya Lesmana, ABNR Counsellors at Law
and joint venture sectors. Other sectors have already incorporated arbitration clauses into their respective agreements, such as trading, banking, finance, merg - ers and acquisitions, and intellectual property rights. Some Indonesian state-owned companies prefer the use of the BANI Arbitration Rules and Procedures over foreign institutional arbitration. Technology and communications are areas in which arbitration is regarded as attractive because of the likelihood of confidentiality being protected. 1.3 Arbitration Institutions There are now many well-known arbitration institu - tions in Indonesia, including: • the Indonesian National Board of Arbitration (BANI); • Alternative Dispute Resolution Institutions in the Financial Services Sector ( Lembaga Alternatif Penyelesaian Sengketa Sektor Jasa Keuangan, or LAPS SJK); • the National Sharia Arbitration Board ( Badan Arbi- trase Syariah Nasional , or Basyarnas); and • the Arbitration Board of Indonesian Sports ( Badan Arbitrase Olahraga Indonesia , or BAORI). In terms of volume and caseload of international matters, BANI is a leader in the field. However, many cross-border contracts still choose international arbi - tration, providing for the application of arbitration rules drawn up by international arbitration institutions such as the International Chamber of Commerce, the Singapore International Arbitration Centre, the Hong Kong International Arbitration Centre and the London International Court of Arbitration. In many cases, the institution will not decide on the dispute; rather, its role is to assist with the conduct of the procedure in general. This often involves the appointment of the tribunal, including selecting arbi - trators where a party fails to do so or where the parties are unable to agree. Often, the institution’s function will encompass the administration of the proceedings, including: • reviewing the draft of the award; • hearing challenges to arbitrators; • taking deposits on account of the arbitration costs;
• fixing the arbitrators’ fees; • reminding parties and tribunals of deadlines; and • arranging hearing facilities. All these functions, and many more, are set out in the arbitration rules unique to each institution. BANI has recently announced major updates to its Arbitration Rules. The 2025 BANI Arbitration Rules (the “2025 BANI Rules”) now provide for the option of emergency arbitration, allowing parties to seek urgent interim measures before the arbitration tribunal is formed. Moreover, the rules introduce new provisions for arbitration proceedings with multiple parties or agreements and the involvement of third parties, and list an additional ground for arbitrator replacement. 1.4 National Courts There are no courts in Indonesia that are designated to hear disputes related to international arbitrations and/or domestic arbitration, such as an international commercial court or a designated high court. How - ever, for the purpose of the registration and enforce - ment of foreign arbitral awards, the Central Jakarta District Court is mandated to issue an execution writ or exequatur to that end. The Arbitration Law is the statute that governs arbi - tration and other forms of alternative dispute resolu - tion, such as mediation and expert determination. The Arbitration Law has replaced the provisions on arbitra - tion contained in the Civil Procedure Code, which was inherited from the pre-independence period. The Arbitration Law is not based on the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) and deviates from it on several points, including the following: • Indonesian is the default language; • the arbitral tribunal is to complete its “examination of disputes” within 180 days of its constitution; and 2. Governing Legislation 2.1 Governing Law
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