ARBITRATION IN INDONESIA Garuda Wiko

Indonesian Arbitration Law 1 1. Indonesian Arbitration Law

SCOPE OF INDONESIAN ARBITRATION LAW

What kind of dispute can be settled by arbitration? Art. 5(1) Law No. 30/1999 “Only dispute of commercial nature, or those concerning rights which, under the law and regulations fall within the full legal authority of the disputing parties, may be settled through arbitration” What kind of dispute can not be settled by arbitration? Art. 5(2) Law No. 30/1999 “Disputes which may not be resolved by arbitration are disputes where according to regulations having the force of law no amicable settlement is possible”

Art. 3 Law No. 30/1999 Competence “The district Court shall have no jurisdiction to settle the disputes between parties bound by an arbitration agreement “

Arbitration Agreement

Definition of Arbitration Agreement Art 1 p (3) Law No.30/1999 “Arbitration agreement shall mean a written agreement in the form of an arbitration clause entered into by the parties before a dispute arises, or a separate written arbitration agreement made by the parties after a dispute arises.

What’s in the Arbitration Agreement ? Arbitration agreement shall specifically contain at least : The use of institutional arbitration or ad-hoc Place of arbitration and/or the venue of the hearing Rules and Procedure of the appointment of arbitrator(s) Procedure and schedules Choice of Law Language

The Parties and Arbitrator(s)

Who are the Parties to the Arbitration? “The parties means the legal entities, based upon civil and/or public law” – Art. 1 (2) Law No. 30/1999 “Third parties outside the arbitration agreement may participate and join themselves into the arbitral process, if they have related interests [and if the parties and the tribunal have agreed]” – Art 30 Law No. 30/1999

Be authorised or competent to perform legal actions; Arbitrator (s) and Requirement of Arbitrator(s) Art. 1 (7) & Art. 12(1) Law No. 30/1999 Arbitrator (s) shall mean one or more persons disignated by the disputing parties, or appointed by the distric court, or by an arbitration institution to render an award regarding the particular dispute submitted for resolution by arbitration. An arbitrator must: Be authorised or competent to perform legal actions; Be at least 35 years of age Have no family relations with either of the disputing parties; Have no financial or other interest in the arbitration award; and Have at least 15 years experience and active mastery in the field

Procedural Law Procedures in Arbitration Procedures in ADR

Procedures in Arbitration The claimant submits a statement of its claim to the arbitrators. The arbitrators will forward the copy of the claim to the respondent. The respondent must give the Reply of the claim within 14 days. The first hearing will be conducted within 14 days from the issue of the order from the arbitrators. In the first hearing, the arbitrators must encourage an amicable settlement between the parties in dispute. The examination of witnesses or expert witnesses. The award must be rendered within 30 days after the examination is completed. Examination of the dispute must be completed within 180 days from the appointment of the arbitrators or the formation of the arbitration panel.

Procedures in ADR Procedures in Alternative Dispute Resolution: The first stage is negotiation where the parties directly meet in the period of 14 days. If the parties reach an agreement, the outcome will be set out in a written agreement. If it’s fails, the dispute will be resolved through mediation. Attempts at resolving the dispute through mediation must be done within 30 days. If the parties reach an agreement, the outcome must be made into a written agreement that shall be registered at the District Court within 30 days after it has been rendered. If it’s fails, the dispute will be resolved by arbitration.

Arbitration Award

Procedures to Enforce National Arbitration Awards The process of the Enforcement of National Arbitration Awards: The award that has been rendered must be register to the Court within 30 days The awards must be implemented by the parties voluntarily and with good faith. It could also be enforce by an order from the Chairman of the District Court at the request of one of the party The order must be issued within 30 days after the application for execution has been registered to the Court. If the Court Order has been rendered, the arbitration awards must be enforced in accordance with the provisions on the execution of final and binding judgements in civil cases.

Requirements to enforce international arbitration awards: Recognition and Enforcement of International Arbitration Award Requirements to enforce international arbitration awards: Shall be registered only to the Central Jakarta District Court The awards is rendered in a country which is party to bilateral or multilateral treaty on the recognition and enforcement of International Award Fall within a scope of commercial law Do not violate public policy Have obtained an order of exequatur from the Chief Judge of the District Court of Central Jakarta

110 Recognition and Enforcement of International Arbitration Award The number of foreign arbitration awards registered Central Jakarta District Court 2000-2016

Recognition and Enforcement of International Arbitration Award

BANI Arbitration Centre: A Closer Look 2 BANI Arbitration Centre: A Closer Look

The Establishment of BANI Arbitration Center

Establishment of BANI Arbitration Center BANI was established in 1977 on initiative of three prominent lawyers, namely the late Prof. R. Subekti, the late Mr. Haryono Tjitrosoebono and the late Prof. H. Priyatna Abdurrasyid The establishment is iniated by Indonesian Chamber of Commerce & Industry (KADIN) BANI as a pioneer of Institutional Arbitration in Indonesia, is now home for 72 Indonesian Arbitrators and 66 Foreign Arbitrators The Centre is located in Jakarta with offices in some Indonesian major cities including Surabaya, Bandung, Pontianak, Denpasar, Medan, Palembang and Batam. Since its establishment, BANI has been actively involved in supporting arbitration practice in Indonesia.

BANI Rules and Procedures

Appointment of Arbitrator(s) BANI Rules and Procedures Appointment of Arbitrator(s) The parties shall appoint arbitrator(s) who are recognized and included in the list of arbitrators provided by BANI and/or having ADR/Arbitration certificate recognized by BANI The parties may appoint arbitrator(s) outside the list of BANI, provided that such arbitrator(s) meet the criteria set by BANI

Interlocutory Measures BANI Rules and Procedures Interlocutory Measures The Tribunal is entitled to stipulate interlocutory measures Request for provisional decision/injunction Request for  Prejudgement Seizure

How the Tribunal Renders the Arbitration Award BANI Rules and Procedures How the Tribunal Renders the Arbitration Award Arbitration award is based on the Majority Award principle In the event that all of the members of the tribunal have different opinions, then the Decision of the Chairman of the Tribunal shall prevail The award signed by the Tribunal shall be delivered to both parties within 14 days after it has been rendered

BANI Arbitration Fees

BANI Arbitration Fees For naration Claims (Rp) Costs A Less than 500,000,000 10.0 % B*)   9.0 % C*) 1 1,000,000,000 8.0 % 2 2,500,000,000 7.0 % 3 5,000,000,000 6.0 % 4 7,500,000,000 5.0 % 5 10,000,000,000 4.0 % 6 12,500,000,000 3.5 % 7 15,000,000,000 3.2 % 8 17,500,000,000 3.0 % 9 20,000,000,000 2.8 % 10 22,500,000,000 2.6 % 11 25,000,000,000 2.4 % 12 27,500,000,000 2.2 % 13 30,000,000,000 2.0 % 14 35,000,000,000 1.9 % 15 40,000,000,000 1.8 % 16 45,000,000,000 1.7 % 17 50,000,000,000 1.6 % 18 60,000,000,000 1.5 % 19 70,000,000,000 1.4 % 20 80,000,000,000 1.3 % 21 90,000,000,000 1.2 % 22 100,000,000,000 1.1 % 23 200,000,000,000 1.0 % 24 300,000,000,000 0.9 % 25 400,000,000,000 0.8 % 26 500,000,000,000 0.6 % D*) Over 0.5 % For naration

The Number of Cases in BANI

The Number of Cases in BANI

The Number of Cases in BANI Nationalities in BANI Arbitration Cases (2010 – 2016) South Korea: 12 Japan: 11 Singapore: 12 Vietnam: 1 Malaysia: 10 USA:7 Germany: 6 China: 3 England: 3 Hongkong: 3 Netherlands: 2 France: 1 Belgium: 1 Timor Leste: 1 Switzerland: 1 Thailand: 1

The Number of Cases in BANI Case Submission in BANI by Business Sector (2014-2016)

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