Arbitration as An Alternative Dispute Resolution


Arbitration as An Alternative Dispute Resolution

Conducting business agreement, businessmen are often to select arbitration forum as a dispute resolution forum considering to save process of inspection time, to simplify the inspection, and to maintain the disputes’ confidentiality due to closed inspection. The Parties may choose their arbitrator in accordance to their expertise and professionalism in their own particular field, and arbitration award is not only final, but it also has acquired permanent legal effect and  binding to the Parties to the dispute (final and binding).


Based on Article 1 Number 1 Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution (“Law 30/1999”), Arbitration is a method of settling civil disputes out from the general judicial system, based on an arbitration agreement made in written by the parties in dispute. An agreement may be considered as the basis of submission to arbitration dispute resolution because an agreement contains arbitration clause as dispute resolution forum and the selected arbitration institution by the Parties (generally based on the business field which agreed), then this agreement may be categorized as an arbitration agreement as mentioned in Article 1 Number 3 Law 30/1999.


Arbitration dispute inspection by the Arbitrator (single Arbitrator) or Arbitrator Assembly, which the concept of single Arbitrator and assembly is based on the will of the Parties in accordance with the selected arbitration institution. Evenmore, in an assembly matter, the Parties in dispute may request to appoint its own Arbitrator in dispute inspection. The arbitration dispute inspection is limited up to 180 (one hundred eighty) days and/or may be extended based on the inspection need and the agreement between the Parties to the dispute.


Arbitration award is submitted and registered by the Arbitrator to the District Court’s registrar in the respondent’s domicile, and if the Parties in dispute do not perform the arbitration award voluntarily, the decision will be performed based on the Chief of District Court in respondent’s domicile (to execute the arbitration award) based on the request by one of the Party in dispute.


In principle, based on Article 60 Law 30/1999, the arbitration award is final and has a permanent and binding legal effect on the Parties, but the arbitration award could be cancelled by submitting to the District Court, in which the arbitration award is registered (District Court of respondent’s domicile) as long as the award fulfills the requirements as mentioned in Article 70 section (1) Law 30/1999, which are:

  • Letters or documents submitted in the hearings, which are admitted being forged or are declared to be forgeries after the award has been rendered;
  • Documents are found after the award has been rendered which are decisive in nature and were deliberately concealed by the opposing party; or
  • An award is made based on fraud committed by one of the parties to the dispute.

Furthermore, the District Court award according to the cancellation of arbitration award, could be submitted for an appeal to the Supreme Court, which decision is final as stated on Article 72 section (4) Law 30/1999.


This Article is generally made for the purpose of ANR Law Firm publication only and should not be treated as legal advice for your legal problem. Shall you have any further questions regarding this topic, you may contact the Advocate who authored this article at

Author: Toshinory A.P., S.H., M.H.

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