Most businessmen prefer to settle dispute arisen out between them through Arbitration. Not only because of the arbitral award will be final and binding, the disputing parties also have a chance to appoint their preferred arbiter, who specialized in particular type of business, to examine the case. Although arbitration is not as cost-effective as court, the New York Convention 1958 allows an arbitral award to be enforced in the territory of the States ratifying the convention. An advantageous that court does not have.
Under the Presidential Decree No.34 Year 1981, Indonesia ratified the New York Convention 1958, and therefore Indonesia is required to recognize and enforce arbitral award taken in the territory of any contracting States (international arbitral awards). However, for the businessmen who wish to enforce an international arbitral award in the Indonesian jurisdiction, local statutory shall apply, and the applicable statutory that govern the execution of international arbitral award are as follows:
- Law Number 30 year 1999 concerning Arbitration and Alternative Dispute Resolution (“Law 30/1999”);
- Het Herziene Inlandsch Reglement (Revised Regulation for Native) (“HIR”);
The brief description on the process in enforcing international arbitral award shall be as follows:
1. Recognition and Registration of an International Arbitral Award
Based on Article 67 Paragraph (1) of the Law 30/1999, prior to the enforcement of an international arbitral award, such award is required to be recognized and registered in the District Court of Jakarta Pusat (“PN Jakarta Pusat”). ThisArticle further stipulates that the request for recognition and registration of arbitral award shall be submitted to the PN Jakarta Pusat by the arbiters who examined the arbitration (or its representative). Please be noted that there is no provision specifying the time limit in registering an international arbitral award to the PN Jakarta Pusat.
Although in theory the arbitral award should be final and binding, the losing party (whom the award is enforced) may request for annulment of arbitral award. The Law 30/1999 limits the reason for arbitral award annulment as listed below:
1) after the arbitral award was issued, there are falsified evidences (see Article 70 point a Law 30/1999);
2) after the arbitral award was issued, a decisive evidence was hidden by the counterparty (see Article 70 point b Law 30/1999);
3) the award was taken upon deceit from one of the parties (see Article 70 point c Law 30/1999);
4) the arbitral award violate the public order (see Article 66 point c of the Law 30/1999).
Pursuant to Article 71 of the Law 30/1999, the petition to annul an arbitral award shall be filed to the District Court of Jakarta Pusat (where the international arbitral award is registered) within 30 days started from the Registration of arbitral award.
Not only the Law 30/1999, the Article V of the New York Convention also stipulates grounds in refusing the recognition of arbitral award as follows :
(a) the parties to the arbitration agreement (or arbitration clause) were under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(b) the party against who the award is invoked was not given proper notice f the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decision on matters beyond the scope of the submission to arbitration, provided that, of the decision on matters submitted to arbitration can be separated from those not so submitted, the part of the award which contains decisions in matters submitted to arbitration may be recognized and enforced; or
(d) the composition of the arbitral authority or arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
2. Petition for Enforcement
In case the losing party has failed to voluntarily fulfill its obligation in the award, upon the registration of international arbitral award in the PN Jakarta Pusat, the winning party may submit petition to enforce the award. Based on the Article 67 Paragraph (2) of the Law 30/1999, the petition to enforce the Arbitral Award shall be filed along with the following documents:
1) Original or Authentic Copy of the International Arbitral Award, with its translation to Bahasa Indonesia;
2) The Original or Authentic Copy of the disputed contract, and its translation to Bahasa Indonesia; and
3) Statement letter from the Diplomatic Representative of the Republic of Indonesia, confirming that the State where the arbitration was performed had ratified the New York Convention.
Furthermore, pursuant to Article 196 HIR, the petition to enforce arbitral award shall be addressed to the Chief District Court Judge. Upon such petition, the Chief District Court Judge shall summon the losing party and remind such party to fulfill its obligation under the award within 8 calendar days.
Should after 8 calendar days the losing party failed in fulfilling its obligation, based on Article 197 HIR, the Chief District Court Judge may issue an Order to Enforce (eksekuatur) the arbitral award and appoint bailiff to size the assets of the losing party. Pursuant to Article 64 in conjunction with the Article 69 of the Law 30/1999, Order to Enforce (eksekuatur) shall be written over the arbitral award and the enforcement shall then be performed by the relevant Court in the jurisdiction where the object is located.
Although the seizure of assets is most likely to be happened, HIR established another process to oppose the Petition for Enforcement. During the process in enforcing the arbitral award, the losing party may challenge the petition from the winning party. The Article 207 HIR stipulates that the Opposition shall be addressed to the Chief District Court Judge where the Petition for Enforcement was addressed.
Please also be noted that the Opposition shall not affect the process of Petition for Enforcement. Pursuant to article 207 Paragraph 3 HIR, unless the Chief District Court Judge issues an order to suspend the process of Petition for Enforcement, such process shall not be interrupted.
Zakaria Kartohardjono 