Domestic arbitral awards must be registered with the District Court Registrar within 30 calendar days of the award being read out. The registration can also be done through the court's online information system.
Indonesia’s arbitration framework has undergone a significant transformation with the enactment of Supreme Court Regulation No. 3 of 2023 (SCR 3/2023). This regulation introduces comprehensive procedural reforms aimed at enhancing the efficiency, transparency, and enforceability of arbitration proceedings within the country. The following analysis delves into the pivotal aspects of SCR 3/2023, providing a detailed overview of its impact on Indonesia’s arbitration landscape.
SCR 3/2023 delineates a clear procedure for the appointment of arbitrators when parties fail to reach an agreement. Under Article 3, parties may petition the District Court to appoint an arbitrator, and the Chairman of the District Court is mandated to make this appointment within 14 calendar days of receiving the request. This provision ensures a prompt resolution to potential stalemates in arbitrator selection.
Furthermore, the regulation introduces a mechanism for challenging the appointment of an arbitrator. If a party has credible evidence suggesting an arbitrator’s lack of impartiality or independence—such as familial, financial, or professional ties to one of the parties—they may file a challenge within 14 days of the appointment. The court is then required to render a decision on this challenge within an additional 14 days, providing a swift and structured process for addressing concerns over arbitrator neutrality.
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SCR 3/2023 stipulates stringent timelines for the registration of arbitral awards, thereby promoting legal certainty and enforceability.
Notably, SCR 3/2023 accommodates electronic registration through the Court Information System (CIS), reflecting a modernization of the arbitration process and facilitating greater accessibility.
The regulation delineates distinct procedures for the enforcement of domestic and international arbitral awards, ensuring a more predictable and efficient process.
Importantly, if an application for annulment and enforcement of an award is filed simultaneously, the enforcement process is suspended until a decision on the annulment is rendered, preventing conflicting judicial outcomes.
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SCR 3/2023 provides clarity on the grounds and procedures for the annulment of domestic arbitral awards, aligning with Article 70 of the Arbitration Law. The grounds for annulment are strictly limited to:
Parties must file an annulment application within 30 days of the award’s registration. The court is then required to conduct hearings and issue a decision within 30 days of the application. This structured timeline ensures a swift resolution to annulment proceedings.
Should the court grant an annulment, parties have the right to appeal to the Supreme Court within 14 days of the decision. The Supreme Court must then render a final decision within 30 days, providing a definitive conclusion to the annulment process.
A significant development under SCR 3/2023 is the redefinition of “public order” in the context of enforcing arbitral awards. Previously, public order was considered violated if an award evidently contradicted fundamental principles of Indonesia’s legal system. The new definition encompasses “everything that constitutes the very foundation essential for the functioning of the legal system, economic system, and socio-cultural system of the Indonesian community and nation.” This broader interpretation provides a more comprehensive framework for assessing the enforceability of arbitral awards, particularly in relation to foreign judgments.
SCR 3/2023 addresses the previously ambiguous process for enforcing security seizure orders issued by arbitral tribunals. Under Article 29, when a tribunal orders a security seizure, it must register the order with the relevant court. The court then assumes responsibility for executing the seizure in accordance with civil procedural law. Furthermore, the court is mandated to inform the arbitrator or arbitral institution of the execution minutes within 2 days of enforcement, ensuring transparency and accountability.
Supreme Court Regulation No. 3 of 2023 marks a pivotal advancement in Indonesia’s arbitration framework, introducing definitive timelines, clarifying procedures, and enhancing the enforceability of arbitral awards. By addressing longstanding ambiguities and aligning with international best practices, SCR 3/2023 positions Indonesia as a more attractive venue for arbitration, fostering greater confidence among domestic and international stakeholders in the country’s dispute resolution mechanisms.
If you have questions or need guidance regarding Indonesia’s evolving arbitration laws, our experienced legal team is ready to provide the support you need. Feel free to reach out to us to discuss how we can help you navigate the complexities of arbitration in Indonesia.
“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult us.“
