Can a Third Party Failing a Motion to Intervene in an Arbitration Dispute?
“The examination of disputes by the Arbitrator or the Arbitral Tribunal is carried out in private so that it can only be known by the Arbitrator and the Parties to the Disputes. However, the Third Party May Filing a Motion to Intervene with Provisions Regulated in the Law “
Basically, the agreement is only binding to the party who made the agreement. Likewise, if a dispute occurs, it only involves the parties in the agreement. Fundamentally, the agreement adheres to the principle privity of contract as regulated in Article 1340 of Indonesian Civil Code (KUHPerdata) that an agreement is only valid between the parties that make it:
“Agreement only applies between the parties who made it. Agreement cannot harm third parties. Agreement cannot benefit third parties other than in the matters specified in article 1317“
However, third parties to an agreement have the opportunity to filing a motion to intervene in the trial process. By filing a motion to intervene, third parties can participate in the process of solving the case on the grounds that their interests are disturbed. It can be interpreted that the intervene was filed because third parties felt that they property was disputed/contested by the disputing Party.
On this basis, parties that are not directly involved in the agreement can participate and resolve the dispute. The question arises about disputes in confidential (secret) arbitration institutions. The principle of confidential covers all matters relating to the subject, object, procedure and verdict in a case at an arbitration institution. If a third party enters a dispute by filing a motion to intervene, the principle of confidential in arbitration becomes available to other parties who propose to intervene in the trial process at the arbitration institution.
There are several provisions in Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution (Arbitration Law) so that third parties can enter and follow the process of court in the arbitration institution. This provision is solely for protect the principle of confidentiality in litigation at arbitration institutions.
Third Parties in the Dispute Resolution Process at the Arbitration Institution
Article 27 of the Arbitration Law provides that all investigation of disputes by the Arbitrator or the Arbitral Tribunal shall be conducted privately. Thus, if the Third Party wants to enter into an ongoing Arbitration dispute, it is different from filing a motion to intervene in civil dispute resolution in the District Court. In Article 30 of the Arbitration Law it is regulated:
“Third parties outside the arbitration agreement can participate and join in the dispute resolution process through arbitration, if there is any element of interest related and its participation is agreed upon by the disputing parties and approved by the arbitrator or arbitral tribunal who examined the dispute in question“
The requirements for third parties outside the arbitration agreement to participate and join in the dispute resolution process through arbitration are that they must have a related interest and be agreed upon by the disputing parties and approved by the Arbitrator or Arbitral Tribunal who investigates the dispute in question. The elements agreed by the parties and approved by the Arbitrator in filing a motion to intervene as a third party are cumulative. So, if these three elements are not fulfilled, the third party cannot enter as a party who intervenes in the dispute resolution at the arbitration institution.
We can help you map the problem, provide advice and appropriate legal action related to the dispute in Arbitration that you face. Please contact us at 082112341235 or ask@bplawyers.co.id