Alternative Financial Services Sector Dispute Resolution Institution
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General Overview
The Alternative Financial Services Sector Dispute Resolution Institution (Lembaga Alternatif Penyelesaian Sengketa Sektor Jasa Keuangan - “LAPS SJK”) is an organization that handles dispute resolution within the financial services sector outside of the court system (nonlitigation).[1] The resolution process within the LAPS SJK is confidential and prioritizes a win-win solution, making it more comfortable for all parties involved and capable of maintaining consumer trust in the financial services sector. [2]
Parties involved in disputes within the financial services sector consist of financial services providers (pelaku usaha jasa keuangan - "PUJK") and consumers. PUJK comprises financial institutions engaged in intermediary activities, fund management, and fund storage within the financial services sector, whether operating conventionally or according to Sharia principles, based on regulatory provisions within the financial services sector[3]. Meanwhile, consumers are individuals who place funds and/or utilize services provided by PUJK. [4]
The History of LAPS SJK
Before the establishment of the LAPS SJK, there were six alternative dispute resolution institutions in the financial services sector registered with the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”), namely BAPMI, BMAI, BMDP, PASPI, BAMPPI, and BMPPVI, each specializing in handling disputes within specific industries.
To enhance effectiveness and efficiency, LAPS SJK was formed based on OJK Regulation No. 61/POJK.07/2020 concerning the Financial Services Sector Alternative Dispute Resolution Institution (“POJK 61/2020”). LAPS SJK is responsible for handling all disputes within the financial services sector, both conventional and sharia-compliant, and extends its scope to include dispute resolution in the field of fintech. [5]
Dispute Resolution Services at LAPS SJK
Dispute resolution services at LAPS SJK include providing binding opinions (pendapat mengikat), mediation, and arbitration. LAPS SJK can only handle disputes that meet certain criteria. First, the complaint/claim must have already undergone resolution attempts by the PUJK but was rejected by the consumer, or the consumer has not received a response to the complaint. Second, the dispute must not be currently in process or previously decided upon by a court, arbitration tribunal, or other alternative dispute resolution institution. Lastly, the dispute must be of a civil matter, not criminal matter. [6]
Binding Opinion
One of the services that LAPS SJK offers is their binding opinion. LAPS SJK is able to receive requests from the parties of an agreement to provide a binding opinion regarding an issue related to differences of opinion within the agreement, such as the interpretation of unclear provisions, the addition or modification of provisions related to the emergence of new circumstances, and other matters regarding specific legal relationships within the agreement. [7]
The examination by the panel team of documents and statements from the parties is conducted within a maximum period of 60 (sixty) days and may be extended. Subsequently, the formulation and reading of the binding opinion takes place. The binding opinion is final and binding, and the parties must implement it in good faith and cannot oppose it. Parties who fail to comply with or act contrary to the binding opinion provided by LAPS SJK are deemed to have breached the agreement. [8]
Mediation
- Mediation Proceeding
LAPS SJK mediation involves resolving disputes through negotiation between the involved parties, facilitated by a LAPS SJK mediator with the aim to explore various possibilities for resolving disputes without imposing their will, aiming for a mutually beneficial settlement agreement. The mediation process is carried out by LAPS SJK in accordance with the regulations and procedures set by the institution. Typically, the mediation process spans 30 (thirty) days but may be extended as necessary. [9]
The outcome of the mediation can vary, either resulting in success or failure. If mediation proves unsuccessful, it will conclude without any settlement. On the other side, a successful mediation leads to the drafting of a settlement agreement. The parties involved have the option to determine whether the settlement will be formalized in a standard agreement or recorded in a deed of settlement. [10]
- Mediation Proceeding Scheme
- Execution of Settlement Agreement
The settlement agreements resulting from LAPS SJK mediation can be divided into two types. First, a settlement agreement in the form of an ordinary agreement. Second, a settlement agreement embodied in a deed of settlement (akta van dading) by the LAPS SJK arbitration tribunal. [11] A settlement agreement in the form of an ordinary agreement operates like any other settlement agreement in civil law. Therefore, if any party fails to comply with the agreement, the recourse may involve civil legal processes, such as a warning letter or civil lawsuits. [12]
Meanwhile, a settlement agreement made in a form of deed of settlement through the LAPS SJK arbitration tribunal cannot be appealed or cassated. This agreement carries binding legal force and can be executed, in line with a judge's ruling and holds final legal force. [13]
Arbitration
- Arbitration Proceeding
LAPS SJK arbitration offers a pathway for resolving civil disputes beyond the general court system, presided over by either a sole arbitrator or an arbitration tribunal. The process typically spans 180 (one hundred eighty) days but may be extended if necessary. [14] During arbitration, the arbitrator encourages the parties to explore alternative methods like negotiation or mediation. Should no settlement be reached, the culmination is an arbitration award. The proceedings generally begin with the submission of an arbitration request by the claimant, followed by the reply, counterclaim (replik), and rejoinder (duplik). It's noteworthy that arbitrators at LAPS SJK are mandated to forward the award to the District Court in the respondent's jurisdiction.
- Arbitration Proceeding Scheme
- Execution of Arbitration Award
The arbitration award of LAPS SJK is final and has binding legal force on the parties, thus cannot be appealed, cassated, or reviewed. [15] The arbitration award shall be registered by the arbitration tribunal to the clerk of the district court whose jurisdiction covers the respondent's domicile no later than 30 (thirty) days from the date of the deed of settlement. [16] In the event that the parties do not voluntarily comply, the arbitration award may be enforced upon the request of one of the disputing parties through an order from the Chairman of the District Court to obtain an enforcement title. [17]
Article 1 point 1 POJK 61/2020. ↩︎
Elucidation POJK 61/2020. ↩︎
Article 1 point 2 POJK 61/2020. ↩︎
Article 1 point 3 POJK 61/2020. ↩︎
Elucidation POJK 61/2020. ↩︎
Article 32 (1) POJK 61/2020. ↩︎
Appendix I (4) LAPS SJK Regulation No. 03. ↩︎
Article 22 LAPS SJK Regulation No. 03. ↩︎
Article 13 LAPS SJK Regulation No. 01. ↩︎
Article 22 LAPS SJK Regulation No. 01. ↩︎
Article 28 paragraph (4) letter b LAPS SJK Regulation No. 02: “If the Parties wish for the Peace Agreement to be documented in a Deed of Settlement, then the Peace Agreement must contain this clause, and thereafter the Parties may submit an Arbitration Request to the Management to prepare a Deed of Settlement based on specific procedures as set forth in Appendix IV of this Regulation”. ↩︎
Article 1234 Indonesia Civil Code. ↩︎
Article 22 paragraph (1) and (2) LAPS SJK Regulation No. 01. ↩︎
Article 16 LAPS SJK Regulation No. 02. ↩︎
Article 41 pharagraph (2) LAPS SJK Regulation 02. ↩︎
Article 40 pharagraph (10 LAPS SJK Regulation 02. ↩︎
Article 41 pharagraph (2) LAPS SJK Regulation 02. ↩︎
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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