The Enforcement of Arbitral Awards in Indonesia: Key Provisions of Supreme Court Regulation 3 of 2023

---

Authors

---

Procedure for Appointment of Arbitrator and the Right to Refuse

In the event that the disputing parties fail to reach an agreement in selecting an arbitrator/arbitration panel (“Arbitrator”) to resolve their dispute, the parties or one of the parties may submit an application to the chair person of the court (ketua pengadilan or “Chairman of the Court”) of the district court/religious court/sharia court (“Court”).^[1] The Chairman of the Court will then issue a Court order on the application according to the following procedure:

• The parties/one of the parties submit an application accompanied by reasons for the disagreement and a proposal of the proposed Arbitrator.

• The Chairman of the Court hears the parties.

• The Chairman of the Court appoints the Arbitrator in the form of a Court order (appointment will be done within 14 (fourteen) days ^[2] after the application is submitted)

Furthermore, if within 14 (fourteen) days after the appointment of the Arbitrator there are valid reasons and evidence indicating a conflict of interest, the parties may then file a right to refuse the appointment or nomination of Arbitrator (hak ingkar). The right to refuse arises from doubts that the Arbitrator will not perform their duties impartially and will favor one party in making decisions.^[3] A right to refuse against the Arbitrator can be carried out if the party is able to prove that there is (i) a family relationship;^[4] (ii) a financial relationship; (iii) an employment relationship with one of the parties or their representatives. A court order of the right to refuse application will be made no later than 14 (fourteen) days after such application is submitted. However, if a right to refuse is filed by one of the parties and is rejected, and the Arbitrator does not resign, a claim may be filed within 14 (fourteen) days. The court decision on such claim is not subject to any appeal or supreme court appeal mechanism.^[5]

Registration and Enforcement of International Arbitral Awards

On the other hand, an international arbitral award refers to an arbitral award rendered by an arbitration institution/sharia arbitration institution or an individual arbitrator outside the jurisdiction of the Republic of Indonesia.^[6] Such arbitral award can only be registered in the Central Jakarta District Court or the Central Jakarta Religious Court (for sharia arbitration).^[7] Additionally, the registration of an international arbitral award must be accompanied by the following documents:^[8]

1. Original document or authentic copy of the arbitral award in accordance with the provisions regarding the authentication of foreign documents, and its official Indonesian translation.
2. Original document or authentic copy of the agreement that forms the basis of the international arbitral award, in accordance with the provisions regarding the authentication of foreign documents, and its official Indonesian translation.
3. Statement from the diplomatic representative of the Republic of Indonesia in the country where the international arbitral award is rendered, affirming that the said country is bound by The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (also commonly referred to as the “New York Convention 1958”).

The registration process for an international arbitral award is generally similar, with a few specific points to note: (i) the registration period by the Court Clerk is 14 (fourteen) days after the receipt of the international arbitral award;^[9] (ii) the provision of a 30 (thirty) day registration period following the rendering of an arbitral award does not apply to international arbitral awards.^[10]

In the event that a party fails to voluntarily comply with an international arbitral award, one of the parties may submit an application to the Chairman of the Court to obtain an enforcement order (eksekuatur).^[11] This application can be made for the partial of the arbitral award as well. Regarding this enforcement application, the Chairman of the Court will examine the application in accordance with Article 66 of the Arbitration Law and will grant or deny it no later than 14 (fourteen) days within the date of the enforcement application registration.^[12]

Annulment of Arbitral Awards

In the event that one or more disputing parties intend to file a challenge against an arbitral award, a written application must be submitted no later than 30 (thirty) days from the date of the submission and registration of the arbitral award with the court clerk.^[13] The application for annulment can be filed if there is suspicion that the arbitral award contains one of the following elements:^[14]

1. Letters or documents submitted during the examination, after the award is rendered, are acknowledged as fraudulent;
2. After the award is rendered, decisive documents are discovered that were concealed by the opposing party; or
3. The award is obtained through fraudulent practices by one of the parties during the dispute examination.

The above elements must be proven by attaching relevant documents/evidence to the annulment application. Subsequently, the annulment application will undergo a Court hearing process consisting of the following stages:^[15]

1. The first hearing for the reading of the application;
2. The second hearing for responses;
3. Interim decision (if any);
4. Hearing with evidentiary proceedings; and
5. Hearing for the reading of the decision.

The Court decision on the annulment application for the arbitral award will be rendered no later than 30 (thirty) days from the date the application is read during the court hearing process.^[16] However, it is important to note that the Court can only grant an annulment application if it is proven that the arbitral award in question meets one of the abovementioned 4 (four) elements.

---

1. Article 4 (1) of SC Reg 3/2023. ↩︎

2. According to Article 1 (16) of SC Reg 3/2023, the term “days” in this ARMA Update refers to calendar days which includes every day of the year, in contrary to working days which does not include Saturdays, Sundays, and public holidays. ↩︎

3. Article 4 (4) of SC Reg 3/2023. ↩︎

4. Article 4 (3) of SC Reg 3/2023. ↩︎

5. Article 5 of SC Reg 3/2023. ↩︎

6. Article 1 (14) of SC Reg 3/2023. ↩︎

7. Article 7 (1) of SC Reg 3/2023. ↩︎

8. Article 7 (3) of SC Reg 3/2023 jo. Article 67 (2) of Arbitration Law. ↩︎

9. Article 7 (4) of SC Reg 3/2023. ↩︎

10. Article 7 (7) of SC Reg 3/2023. ↩︎

11. Article 16 (1) of SC Reg 3/2023. ↩︎

12. Article 15 (4) of SC Reg 3/2023. ↩︎

13. Article 24 (1) of SC Reg 3/2023. ↩︎

14. Article 24 (4) of SC Reg 3/2023. ↩︎

15. Article 26 (2) of SC Reg 3/2023. ↩︎

16. Article 26 (1) of SC Reg 3/2023. ↩︎

---

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.

In this article

1. Procedure for Appointment of Arbitrator and the Right to Refuse
2. Registration and Enforcement of International Arbitral Awards
3. Annulment of Arbitral Awards

Related Updates

Latest Updates