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SHIFT POSITION BETWEEN INTERNATIONAL ARBITRAL AWARD AND NATIONAL ARBITRAL AWARD

Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (“Arbitration Law”) adheres to the territorial principle in determining whether an arbitration award is included in the national or international arbitration ruling. In Article 1 point 9 of the Arbitration Law, it has been determined as follows:

“The Decision of international arbitration is the decision made by an arbitration institution or individual arbitrators outside the jurisdiction of the Republic of Indonesia or the decision of an arbitration institution or individual arbitrators that under the law of the Republic of Indonesia is considered as an international arbitration award.”

According to the phrase “outside the jurisdiction of the Republic of Indonesia”, the entire arbitration award handed down outside the territory of the Republic of Indonesia, is considered as International Arbitral Award. So, in practice, itrefers to the provisions of Article 65 to Article 69 of the Arbitration Law.

On the other hand, based on the phrase “according to the legal provisions of the Republic of Indonesia is considered as an international arbitration decision”, so far, there is no legal provision of the Republic of Indonesia governing this case. So, the determination of an arbitration award may be categorized as national or international arbitral award, based on the country where the decision is handed down.

The illustration can be learned in the following case:

An arbitration case between Indonesian company and Australian company , based on the agreement that has been agreed upon, the existing dispute resolution conducted at the Singapore International Arbitration Centre (“SIAC”). Thus, the position of the SIAC ruled by the Arbitration law belongs to the category of international arbitral award.

But then the decision is not announced in Singapore, the country where a series of investigation of the arbitration process is conducted. This happens because the occurrence of something beyond the power of the parties (force majeure). Based on the agreement of both parties, ultimately the determined verdict announcement process is carried out in the territory of the Republic of Indonesia.

In such case, based on the provisions of the Arbitration Law, as the announcement location of the verdict switch to Indonesia, the arbitration award is considered as a national arbitration award, no longer an international arbitration.

Furthermore, the treatment and the implementation of the arbitration award should adhere to the rules that cater for national arbitration ruling. There is an obligation to register the award in the District Court within the jurisdiction of the Respondent within 30 days after the verdict is announced. Besides that it is also able to implement  the rules of annulment of an arbitral award under Article 70, 71 and 72 of the Arbitration Law.

Another issue is when the arbitration case investigated and decided upon in two different countries, outside the territory of the Republic of Indonesia. In such case, the position remains as an international arbitration decision, which will be held in Indonesia after obtaining Exequatur determination of the Central Jakarta District Court. (Also Read: Implementation of International Arbitral award in Indonesia).

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Author :

Bimo Prasetio, S.H. dan Fairus Harris, S.H., M.Kn.

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