INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho, Adithya Lesmana and Adrian Panata, ABNR Counsellors at Law
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 (the “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 • the grounds for annulment of Indonesian awards are limited to fraud, forgery or the concealment of material documents. Some of these points will be discussed in further detail in this chapter. Generally, the role of the courts is relatively limited compared to the role granted to the courts in the Model Law. The Supreme Court recently enacted Supreme Court Regulation No 3 of 2023 on the Procedure for the Appointment of Arbitrators by the Court, Rights to Challenge Arbitrators, and Examination of Appli - cations for Enforcement and Annulment of Arbitral Awards (the “Supreme Court Reg No 3/2023”). The Regulation introduces key updates to the Arbitration Law, including arbitrator immunity, the procedures for challenging arbitrators and the timeline for issuing On 3 January 2025, the Indonesian Constitutional Court issued Judgment No 100/PUU-XXII/2024, which further clarifies the definition of an “international arbi - tral award” under Article 1 (9) of the Arbitration Law. Article 1 (9) of Law No 30 of 1999 on Arbitration and Alternative Dispute Resolution originally defined an international arbitral award as: “an award rendered by an arbitral institution or indi- vidual arbitrator outside the jurisdiction of the Repub - lic of Indonesia, or an award rendered by an arbitral institution or individual arbitrator which, under the laws of the Republic of Indonesia, is deemed to be an international arbitral award.” exequatur after award registration. 2.2 Changes to National Law
The Court held that the original wording of the provi - sion, particularly the phrase “which, under the laws of the Republic of Indonesia, is deemed to be an inter - national arbitral award”, created legal uncertainty and was susceptible to multiple interpretations. Accord - ingly, to enhance legal certainty, the Court declared the phrase unconstitutional and effectively removes the term “deemed to be” from the text of the provi - sion. By removing the phrase, the Court effectively adopted a territorial approach to the classification of arbitral awards. Under this approach, an award will be regarded as international if it is rendered outside the territory of the Republic of Indonesia. The distinction between domestic and international arbitral awards is significant because, under Indone - sian law, they are subject to separate recognition and enforcement regimes. The judgment aims to remove ambiguity regarding this issue and improve predict - ability in enforcement proceedings and strengthen Indonesia’s attractiveness as an arbitration-friendly jurisdiction. In July 2026, Indonesia enacted the Indonesia Inter - national Financial Center (IIFC) Law, establishing a special financial zone intended to promote Indonesia as a regional financial hub. At the time of publication of this guide (20 August 2026), the full text of the Law has not yet been made publicly available. However, according to publicly available reports, one of its key features is the establishment of a dedicated arbitration institution and a specialised court to resolve disputes arising from activities conducted within the financial centre. Although no implementing regulations have yet been enacted, the introduction of the IIFC dispute resolution framework is expected to have significant implications for Indonesia’s existing arbitration regime under the Arbitration Law. This may necessitate further legisla - tive and regulatory reform to ensure legal certainty in the resolution and enforcement of commercial dis - putes through arbitration in Indonesia.
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