INDONESIA Law and Practice Contributed by: Stephen Igor Warokka and Mutiara Kasih Ramadhani, SSEK Law Firm
determined by the English Court, unless...” The court concluded that, by this agreement, the dispute was to be decided by a court in England according to English law, so the Indonesian courts were not authorised to examine and adjudicate this dispute. 7.2 Enforcement of Law and Arbitration Clauses Incorporated Into a Bill of Lading As discussed in 7.1 Enforcement of Law and Juris- diction Clauses Stated in Bills of Lading , the courts will recognise and enforce a law and arbitration clause in a bill of lading as long as the bill is a legitimate con - tract as defined by Article 1320 of the Indonesian Civil Code. The courts will consistently uphold the principle of freedom of contract, even when it is in relation to a charterparty. In addition, under Article 1 (3) of Law No 30 of 1999 regarding Arbitration and Alternative Dispute Resolu - tion (the “Indonesian Arbitration Law”), an arbitration clause within a written agreement is considered a valid arbitration agreement. Furthermore, Article 3 of the Indonesian Arbitration Law explicitly states that the courts do not have the authority to adjudicate matters governed by an arbitration agreement. The existence of an arbitration clause in a bill of lading automatically removes the courts’ jurisdiction over the dispute. 7.3 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards was rati - fied by Indonesia on 5 August 1981 and is therefore applicable. Other than that, the Indonesian Arbitration Law will apply in the case of arbitration. 7.4 Arrest of Vessels Subject to Foreign Arbitration or Jurisdiction Article 222 of the Shipping Law states that the courts will only order an arrest of a vessel or an attachment where the relevant claim is subject to a court order. However, Indonesia is a signatory to the New York Convention and, as further confirmed by Article 66 of the Indonesian Arbitration Law, this participation enables overseas arbitration decisions to be enforced in Indonesia, including an attachment or an arrest of a vessel.
Nonetheless, this is only possible if the arbitration award is issued by an arbitration institution in a con - tracting state of the New York Convention. In order to request the execution of an international arbitration award in Indonesia, Article 67 of the Indonesian Arbi - tration Law states that the relevant party or its proxy must file a request of execution to the registrar of the Central Jakarta District Court. When the relevant claim is subject to a foreign jurisdic - tion clause that gives rise to a decision by a foreign court, the claim is prohibited from being executed in Indonesia. The court will therefore not order an arrest of a vessel or attachment. This is consistent with Article 436 of the Indonesian Regulations on Legal Proceedings ( Reglement op de Rechtvordering – RV), which states that “the execution of a foreign district court’s decision cannot be implemented, unless a law provides otherwise, or at least in order to be imple - mented it is necessary to file a new lawsuit using the foreign district court’s decision as evidence for recon - sideration by the competent court”. This provision is a confirmation of the interpretation of Article 222 of the Shipping Law, whereby the “court order” stated thereunder will refer to an Indonesian court order. The alternative solution in this situation is to resubmit the claim to an Indonesian district court and utilise the foreign court decision obtained to persuade the court to decide in favour of the claimant. 7.5 Domestic Arbitration Institutes There is no Indonesian domestic arbitration institute that specialises in maritime claims. However, maritime claims can be settled through the Indonesian National Arbitration Centre ( Badan Arbitrase Nasional Indone- sia – BANI), an independent arbitration institution in Indonesia, if agreed by the parties. 7.6 Remedies Where Proceedings Are Commenced in Breach of Foreign Jurisdiction or Arbitration Clauses When court proceedings are commenced in Indone - sia, the relevant party can file an objection to the court on the basis of Article 11 of the Indonesian Arbitration Law, which explicitly prohibits the courts from adju - dicating in disputes that are validly governed by an arbitration clause.
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