REGISTERING PROCEDURE OF ARBITRATION AWARD BEFORE THE DISTRICT COURT
The arbitration award should be implemented voluntarily by the parties. However, if this does not occur, in order to be executed with the enforcement of the courts, it must be registered in advance to have the executorial power.
According to Law No. 30 of 1999 regarding Arbitration and Alternative Dispute Resolution (“Arbitration Law”), an arbitration award is a final decision which has permanent legal force and is binding on the parties. It becomes one of the characteristics of the settlement through arbitration which distinguish it from the settlement through litigation in general.
Settlement through litigation may take relatively longer, due to further legal efforts undertaken by the losing party who do not accept the decision of the judges, such as appeal to the High Court, Cassation (appeal to the supreme court) and Judicial Review to the Supreme Court.
This is quite different with an arbitration award, where any legal effort is not possible due to the nature of the decision itself, which is final and legally binding immediately since it is decided by the arbitrator or panel of arbitrators. In principle, the decision should be carried out voluntarily. However, if this is not the case, the parties can have court assistance in carrying out the execution. The arbitral decision itself has no executorial power, considering the arbitration institution is merely a quasi-judicial.
However, there is clause in the Arbitration Law which requires an arbitration decision must be submitted and registered with the Registrar of the District Court. In Article 59 and its explanation, there is no further details which the district court is authorized to accept the registration of the arbitration award.
Further, if we refer to Article 1 point 4 of the Arbitration Law, arbitration award is registered before the District Court which jurisdiction covers the area where the defendant resides. In this case it means that the previous respondent in the arbitration case. For international arbitration decision, it firmly stated in the Arbitration Law that the issue of its recognition and enforcement is under the authority of Central Jakarta District Court.
Who is entitled to register the arbitration award?
The next question is which party is authorized to register the arbitration decision? Does the Applicant in the arbitration case or the winning side? The Applicant in the arbitration case might be the losing party or the party that does not accept the decision of the arbitrators.
If that is the case, the applicant might not register the arbitration decision, thus allowing the decision cannot be executed or implemented.
Arbitration Law is accommodate such concern as it is mentioned clearly in Article 59 that in a period of 30 (thirty) days from the date of decision is made, the original sheet or an authentic copy of arbitration decision shall delivered and registered by the arbitrator or attorney to the Registrar of District Court. This means the authorities for reporting and registering the arbitration decision are the arbitrator, arbitration institution or their proxies. For arbitration dispute which resolved through BANI, BANI is obligated to register the decision within a period not later than 30 days after the verdict was stated by the panel of Arbitrators.
The arbitration award was registered by the authorities proved by enclosing the arbitration award with the original sheet of the letter of appointment as arbitrator or its authentic copy. Although registration is conducted by the arbitrator or attorney, but all registration cost related will be charged to the dispute parties.
The procedure of registration submission is not regulated by the Arbitration Law, whether the application should submit it in writing or verbally. In the absence of arrangements for this, it can be assumed that the registration is able to be submitted by either option.
The court clerk who receives the application for registration of arbitration award will provide records or signatures at the end or edge of the verdict. After the arbitration decision has registered, then it becomes authentic and has a same legal effect as a court decision which legally binding.
The provision which stating that the arbitration award must be registered within 30 days under article 59 is mandatory, a failure to comply with it will resulted the arbitration award cannot be implemented.
A record or signature at the end or edge of the verdict is the proof that the obligation of registration is completed and the arbitration decision can be implemented where the dispute parties are required to honor it.
In the event of any of the parties is unwilling or reluctant to implement the arbitration award voluntarily, then on the basis of the petition of either party, Chairman of the Court may give an order to implement the decision. Prior to the order, Chairman of the Court will verify whether the decision has been meet formal requirement of case examination by arbitration as stipulated in Article 4 and Article 5 of the Arbitration Law, and not contrary to morality and public order.
The fact that Chairman of the Court may only examine the formal terms and not examine the reasons and legal considerations of the decision, indicating the nature of the independence of the arbitration which cannot be interfered by any other judicial institutions. This is the protection and guarantees provided by the law in order to keep arbitration decisions remain independent, final and binding.
BP Lawyers can help you
We can help you to register the arbitration decision in order of the execution of the arbitral award. Prior to registering, we will examine the possibility of rejection by the court on the grounds of public order. There are different senses of public order in some cases. However, we will approach the precedent cases that have been successfully executed through the courts. Contact us now at: email@example.com or call to +62821 1000 4741.