The Urgency of Amending Current Indonesian Arbitration Law

Domestic and international arbitration law in Indonesia falls under the Arbitration Law (Law No. 30 of 1999). The law which has been implemented for 20 years, in my opinion needs to be revised. It is regarding the cancellation of arbitration award by the court and also there is a need to adjust the Arbitration Law towards the principles of arbitration that apply internationally.

The first urgency related to the annulment of an arbitration award by the court. Arbitration award has final and binding power so the award which handed down by the arbitrator must be taken by the parties voluntarily. However, this does not rule out the possibility of a claim for compensation by a court if the party is not satisfied with the arbitrator's decision. 

Objections in this matter can be submitted to a court provided by the state insofar as this is requested by the regulations in force in the state of that arbitration award was issued. So referring to this regulation, the parties which is dissatisfied with the arbitrator's decision possibly can submits for annulment agreeing to that decision require at least based on Article 70 and Article 71 of the Arbitration Law. And based on the decision of the 2014 Constitutional Court No. 15/PUU-XII/2014, an application for cancellation can be submitted to the relevant court without evidence of a court decision.

 On the one hand it can be an advantage for the dissatisfied party because it can cancel the decision and there is no execution needed relating to the decision. Yet this chance also will overcome deficiencies on the other hand. An arbitration award basically has final and binding power so an appeal cannot be sought in court. In my opinion, the court tasks are just to register an arbitration award in accordance with Article 59 of the Arbitration Law and to force the execution of that award in case the opposing party does not want to implement that award voluntarily in accordance with Article 61 of the Arbitration Law. So, the court's role is to reinforce the arbitration award, not to cancel it. 

 If somehow the objection arises from the losing party and they want to annul the arbitration award, this will be the authority of the arbitrator and not the authority of the court so that legal certainty is binding on the arbitration award. This is also related to the implementation of the pacta sun servanda principle that has been agreed by the parties to the agreement to settle disputes through arbitration. Thereby the parties should assistance to this agreement clause.

 The second imperative for me in regard to adjust current Indonesian Arbitration Law to the International Arbitration Law and other universal regulation of arbitration as the concept of alternative dispute settlement. It is also important to harmonize with other countries and global arbitration practices that have more conducive conditions of arbitration process. As an addition, it is necessary to review the provisions of arbitration that apply in the international world such as the UNCITRAL Model Law during the amendment.