Supreme Court Regulation No. 3 of 2023 (“Perma 3/23”) serves as an implementing regulation that further elaborates the provisions of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution. The Perma 3/23 governs the procedures for the appointment of arbitrators by the court, the exercise of the right to challenge (hak ingkar), and the process for examining applications for the enforcement and annulment of arbitral awards, whether domestic or international, including those based on sharia principles.
The Perma 3/23 stipulates that district courts have the authority to examine and enforce general arbitral awards, while religious courts or mahkamah syar’iyah are competent to handle sharia-based arbitration. The civil and litigation clerks are tasked with receiving applications for the enforcement or annulment of arbitral awards according to the type of case.
In an arbitration agreement, the parties may mutually agree on the appointment of an arbitrator. However, in the event the parties fail to reach such an agreement, either party may submit a request to the chief judge of the court to appoint an arbitrator or an arbitral tribunal, which must be determined within 14 days. Following the appointment, the parties are entitled to exercise the right to challenge, that is, to object to an arbitrator on legitimate grounds. This challenge is reviewed by the chief judge of the court, whose decision is final.
In the registration of arbitral awards, domestic or sharia-based arbitral awards must be registered within 30 days of the date the award is rendered. This registration shall be carried out by the arbitrator or their authorized representative before the court registrar, either in person or electronically via Sistem Informasi Pengadilan/Court Information System (SIP/CIS). Meanwhile, international or international sharia arbitral awards must be registered with the Central Jakarta District Court or the Central Jakarta Religious Court, without any specified time limit. Such registration must be accompanied by duly authenticated documents and their official translations into the Indonesian language, along with diplomatic confirmation that the originating country is bound by a treaty with Indonesia concerning the recognition and enforcement of arbitral awards.
Enforcement and Annulment of Arbitral Awards in Indonesia
Arbitral awards may be enforced as long as they do not violate public order, decency, or contradict Articles 4 and 5 of the Arbitration and Alternative Dispute Resolution Act No. 30 of 1999 (“Arbitration Act”).An exequatur may be granted according to Article 66 of the Arbitration Act if parties fail to voluntarily comply with arbitral awards. For this, a request must be submitted to the Central Jakarta District Court or, in the case of sharia-based awards, to the Central Jakarta Religious Court, within 30 days of the award.
The application of annulment of an arbitral award shall be requested in writing within 30 days of its registration to the Court Clerk. The grounds for annulment are not cumulative—satisfying any one of the following conditions may be sufficient: (a) a document used in the arbitration process is proven or declared to be falsified after the award is rendered; (b) a decisive document was intentionally concealed by the opposing party; (c) the award was based on deceit committed by one of the parties.
There are five procedural stages in an annulment process. If the court grants a right to object to the award, the opposing party may file an appeal within 14 days. Regarding provisional measures, if an Arbitrator or an Arbitral Tribunal issues a seizure order (sita jaminan) during the arbitration proceedings, the order must be registered with the court. After registration, the applicant may request the court to execute the seizure against the respondent. The court must then deliver a report of the execution to the Arbitrator or relevant Arbitration Institution (including Sharia Arbitration Institutions). The procedure for seizure follows the prevailing civil procedural law, and any costs incurred are borne by the applicant.
Written by: Nadira Karisma Ramadanti and Tsany Ariqah Tsabitah
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