INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho, Adithya Lesmana and Adrian Panata, ABNR Counsellors at Law
granted under Decision No 200/Pdt.Sus-Arb/2023/ PN Jkt.Pst dated 24 April 2025 ( PT Mahkota Sentosa Utama v China Light Industry , et al ), concerning PT Mahkota Sentosa Utama v China Light Industry Inter- national Engineering Co Ltd and the China Interna- tional Economic and Trade Arbitration Commission . This is controversial because Article 20 (1) of Supreme Court Reg No 3/2023 stipulates that there is no legal recourse to challenge the decision to recognise the arbitral award. The court determined that the annulment was par - tially warranted on the basis that the arbitration agree - ment was drafted solely in Chinese and English. This is deemed to be in contravention of Indonesian law, which mandates that agreements involving Indone - sian parties must be prepared in the Indonesian lan - guage or in bilingual documents. The court deemed this consideration relevant to the evaluation of the agreement’s validity under Indonesian law. 3.4 Validity The Arbitration Law recognises the separability prin - ciple: an arbitral clause can be considered valid even if the rest of the contract in which it is contained is wholly or partly invalid. The arbitration clause is there - fore separate from the agreement in which it is set out. If there is no express law chosen for the arbitration agreement, the law with which that agreement has its closest connection is either the law of the underlying contract or the law of the seat of the arbitration. The Arbitration Law contains no limitation on the par - ties’ autonomy to select arbitrators, but lists require - ments for a valid appointment as an arbitrator. An arbitrator must: • be legally capable to perform legal actions; • be at least 35 years old; • not have any family relationship by blood or mar - riage up to the second degree with any of the disputing parties; • not have any financial or other interest in the award; and 4. The Arbitral Tribunal 4.1 Limits on Selection
• have a minimum of 15 years’ experience and active proficiency in the field concerned. The Arbitration Law also prohibits judges, prosecu - tors, court clerks and other court officials from being appointed as arbitrators. There is no restriction with regard to nationality. There is no clear rule in the Arbitration Law requiring an uneven number of arbitrators. The Arbitration Law says that if parties each appoint an arbitrator, such arbitrators have the authority (ie, not the obligation) to appoint a third arbitrator. If they fail to do so, one of the parties can (but need not) apply for the appoint - ment of a third arbitrator by the court. 4.2 Default Procedures Under the Arbitration Law, the parties have the free - dom to choose the national or international arbitration institution to which they wish to submit their disputes. The rules of that institution will apply unless otherwise decided (Article 34, Arbitration Law). The parties may agree on a particular set of rules on arbitrator selec - tion, provided that the rules are not contradictory to the Arbitration Law nor to the appointment rules of the national or international arbitration institution they have selected. If the chosen method for selecting arbi - trators fails or the parties do not choose a selection method, the chair of the district court will have author - ity to appoint the members of the arbitral tribunal. Specifically for ad hoc arbitration, the Arbitration Law provides that the parties may seek the assistance of the chair of the district court to appoint the members of the arbitral tribunal if they fail to do so themselves. However, if the parties agree to specific institutional arbitration rules or set out their own rules, these will apply as the default procedure, provided they do not contradict the Arbitration Law. The Arbitration Law provides that the tasks of the arbi - trators end when: • an award has been issued; • the deadlines determined in the arbitration agree - ment have been exceeded; or
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