INDONESIA Trends and Developments Contributed by: Emir Nurmansyah, Theodoor Bakker, Ulyarta Naibaho and Adithya Lesmana, ABNR Counsellors at Law
ANBR Counsellors at Law Graha CIMB Niaga 24th Floor Jl. Jenderal Sudirman Kav. 58 Jakarta 12190 Indonesia Tel: +62 21 250 5125/5136 Fax: +62 21 250 5001
Email: info@abnrlaw.com Web: www.abnrlaw.com
Inconsistency in the Enforcement of International Arbitral Awards In April 2025, the Central Jakarta District Court, as the officially assigned court for assessing the registra - tion and recognition of international arbitral awards in Indonesia, rendered a controversial ruling. The court annulled the execution writ (exequatur) of a CIETAC arbitral award, stating that its issuance was inconsist - ent with Indonesian public policy. This issue is particu - larly contentious, as the Indonesian Arbitration Law and Supreme Court Regulation No 3 of 2023 specify that a decision recognising an arbitral award is con - sidered final, with no available legal remedies for chal - lenging such a decision. In 2023, PT Mahkota Sentosa Utama filed a petition with the Central Jakarta District Court (Case No 200/ Pdt.Sus-Arb/2023/PN Jkt.Pst), seeking annulment of CIETAC Arbitral Award No 0831 of 2019 dated 10 June 2019, as well as the corresponding execution writ (exequatur) No 50/Eks.Arb/2022/PN.Jkt.Pst dated 4 January 2023. The plaintiff contended that the CIETAC Arbitral Award was rendered through deception and fraud, asserting that it had not executed the Technical Consulting Service Agreement dated 24 November 2017, which includes the CIETAC Arbitration Clause. The plaintiff maintained that the individual who signed the agreement on its behalf was unknown to the com - pany. Furthermore, the plaintiff argued that it was not properly notified of the arbitration proceedings, con - stituting a breach of due process and the principle of audi et alteram partem.
For the annulment of the execution writ (exequatur), the plaintiff argued that it should not have been issued by the Central Jakarta District Court as it was in con - travention of Indonesian public policy. The plaintiff stated that they had entered into a settlement agree - ment ratified (homologated) by the Central Jakarta District Court as a result of a 2020 court-supervised debt restructuring process, which binds all the plain - tiff’s creditors under Indonesian law. The plaintiff contended that the issuance of the execution writ (exequatur) was inconsistent with Indonesian pub - lic policy, as it contravened the rights of Indonesian creditors who are entitled to settlement according to the settlement agreement in question. The plaintiff acknowledged that the settlement agree - ment includes a provision stating any arbitral award will be paid within 18 months after settlement with the last creditor as outlined in the agreement. The plaintiff noted, however, that the defendant issued a letter of demand requesting payment of the awarded amounts within seven days from the date of the letter, showing that the defendant will enforce the award in contra - vention of provisions of the settlement agreement. Additionally, the plaintiff asserted that the Technical Consulting Service Agreement was drafted only in Mandarin and English. According to the plaintiff, this does not comply with Indonesian Law on the Use of the Indonesian Language, which requires that agree - ments involving an Indonesian party be drafted in Indonesian or accompanied by an Indonesian trans - lation. It is noted that the respondents, despite having been duly notified, failed to appear at the hearings.
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