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Presentation of Prof. Mochtar Kusuma-Atmadja : Arbitration in the 1990s: Developments in East Asia : Arbitration in the Southeast Asian Region

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Indonesia

The Indonesian National Board of Arbitration (BANI) is an independent body sponsored by the Indonesian Chamber of Commerce (KADIN) approved and supported in its establishment on 3 December 1977 by the Minister of Justice, Minister of Planning and Head of the Board for National Development, and the Chief Justice of the Republic of Indonesia.

The legal basis of dispute resolution by arbitration in Indonesia is found in Articles 615 to 651 of the Regulation on Civil Law Procedure (Reglement op de Burgerlijke Rechtsvordering, Law No. 52-1847) and in the Law on the Supreme Court (Law No. 1, 1950). These rules provide that the basis for settlement of disputes by arbitration is the arbitration agreement in which both parties agree that arbitration is their choice of dispute settlement. In the event that such arbitration clause is not found in the agreement between the parties, it is also possible that when they are in a conflict situation they then make an agreement to settle it by arbitration.

The number of cases settled by arbitration and the amounts involved in this period since 1993 is as follows: in 1993, 5 cases have been decided by the Indonesian National Board of Arbitration with a total value of US$4,197,560; in 1994, 8 cases were settled with a total value of US$13,266,527; and in 1995, 7 cases were settled with a total value of US$6,502,403.

The Board consists of a Chairman, Vice Chairman, Permanent Members, Advisor, Secretary and Associate Members/Arbitrators.

The arbitration procedure commences with the filing or registration of the request for arbitration addressed to the Board and contains:

1. the full name and domicile of the parties;

2. a summary description of the dispute; and

3. the extent of the claim.

Copies of the documents related to the case must also be filed with the request for arbitration. In case this request for arbitration is made by an agent, a power of attorney has also to be filed. In the request for arbitration, the claimant can appoint an arbitrator or leave the appointment of such party's arbitrator to the Chairman of the Board. The Secretary of the Board will file the request of arbitration in the register of the Board after payment of the cost of registration and administrative costs.

If the parties so desire and with approval of the Board, the case may be settled using rules of procedure other than the Indonesian National Arbitration Board rules of procedure. Such agreement has to be made explicitly and in writing.

After registration of the case and approval of the Board to accept the arbitration case, the Chairman of the Board will issue an order to deliver a copy of the request to the respondent with an order to the respondent to submit a written answer within 30 days. In the answer, the respondent has to appoint an arbitrator or leave the appointment of the arbitrator to the Chairman of the Board. If the respondent fails to appoint an arbitrator, then the Chairman of the Board will appoint an arbitrator for the respondent. After both parties appoint their respective arbitrators, the Chairman of the Board will appoint an arbitrator to preside over the panel of arbitrators after taking into consideration the proposals from the two appointed arbitrators. The third arbitrator chosen by mutual agreement can, with the approval of the Chairman, be from outside the list of arbitrators of the Indonesian National Board of Arbitration.

The panel of arbitrators or the tribunal will then hear and decide the dispute between the parties by virtue of the authority vested in the Board. The procedures of arbitration include investigation by the tribunal of the claim and any counterclaim, referral to documents and hearing of witnesses if so desired by the parties.

It is mandatory that at the first session, the Tribunal shall first seek to reach a settlement. If settlement is reached, the Tribunal will make a deed of compromise and decide that both parties must abide by such settlement.

Arbitration proceedings shall be closed to the public for reasons of confidentiality of the parties and the case.

The award will include a fixed time limit for the losing party to abide by the decision. After such time limit elapses, the Chairman of the Board will submit the award to the competent President of the District Court for the execution of the decision.

Indonesia has ratified the New York Convention on Recognition of Foreign Arbitral Awards. It is preparing a bill on arbitration to strengthen the institution and legal basis for the activity which is now based on an outmoded Dutch statute.

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