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Written by:

Yohanes Memory M. Sa’pang | Victor Juan Tanojo

Introduction

Arbitration (including international arbitration) is a favored means of dispute resolution in many contracts, especially when the contracts involve foreign parties. For foreign arbitral awards to be recognized and enforced in the jurisdiction of the Republic of Indonesia various requirements must be observed.

In this article, we provide step-by-step guidance on how to ensure an international arbitral award is recognized and enforced in Indonesia based on Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (“Indonesian Arbitration Law”).

International Arbitral Award

An arbitral award, as a matter of Indonesian Arbitration Law, is considered an International Arbitral Award if the award is rendered by an arbitration body or ad-hoc arbitration outside of the jurisdiction of Indonesia, or if such award is rendered by an arbitration body or ad-hoc arbitration which under Indonesian law is deemed as an International Arbitral Award.

Recognition and Enforcement of an International Arbitral Award

1. An International Arbitral Award can only be recognized and enforced in Indonesia if it adheres to Indonesian Arbitration Law.

2. An International Arbitral Award can only be recognized and enforced in the jurisdiction of Indonesia if it fulfils the following requirements:

   1. the International Arbitral Award is rendered by an arbitrator or arbitral tribunal in a state with whom Indonesia is bound by a treaty—whether bilaterally or multilaterally—on the recognition and enforcement of International Arbitral Awards;
   2. the International Arbitral Award is limited to awards which under Indonesian law fall within the scope of commercial law;
   3. the International Arbitral Award may only be enforced in Indonesia if it does not violate Indonesia’s public order;
   4. the International Arbitral Award may be enforced in Indonesia only after obtaining an exequatur (an official authorization, permitting execution) from the Chief Judge of the Jakarta Pusat District Court (“JPDC”); and

   5. for International Arbitral Awards that involve the Republic of Indonesia as a party to the dispute, the award may only be enforced against the Republic of Indonesia after obtaining an exequatur from the Supreme Court of the Republic of Indonesia, which will then delegate the enforcement to JPDC.

3. An application for an exequatur can be submitted only after the award is submitted to and registered by the arbitrator or its attorney with the Registrar of JPDC , together with the following documents:

   1. an original or authenticated copy of the International Arbitral Award, with authentication made in accordance with the provisions regarding authentication of foreign documents, and its official translation into Bahasa Indonesia;
   2. an original or authenticated copy of the agreement forming the basis upon which the International Arbitral Award was handed down, with authentication made in accordance with the provisions regarding authentication of foreign documents, and its official translation into Bahasa Indonesia;
   3. a statement from a diplomatic representative of Indonesia in the state where the International Arbitral Award was rendered, stating that such state and Indonesia are both bound by a bilateral or multilateral treaty on the recognition and enforcement of international arbitral awards; and

   4. proof of identity of the arbitrator and of the person granted by the arbitrators with the power of attorney to register the Award. 

4. The “authenticated copy” mentioned in paragraph 3(a) and 3(b) above requires the certified true copy of these documents to be authenticated in accordance with the provisions under Indonesian Law regarding authentication of foreign documents. Under the Ministry of Foreign Affairs Regulation No. 3 of 2019 re: Guidelines on Foreign Affairs by Regional Authorities (“MoFA Regulation No. 3/2019”), the authentication is performed by having the document(s) legalized at the Embassy of the Republic of Indonesia in the relevant state.

5. The requirement of document authentication also applies to the original power of attorney granted by the arbitrator, if applicable.

6. After the submission to and registration of the International Arbitral Award by the Registrar of JPDC is completed, an exequatur for enforcement can be sought from the Chief Judge of the JPDC. The documents required for an application for exequatur comprise the registered award along with all supporting documents for the submission and registration of an international Arbitral Award as stated in Paragraph 3 above.

Comments

It is quite common for a challenge to be filed by the party against whom the award is to be enforced in Indonesia. While many may take a negative view of the challenges in having an international arbitration award enforced in Indonesia, we recommend that, notwithstanding, the awards be registered with JPDC as soon as practicable, pending the decision to further apply for an exequatur from the court.

If you are interested to learn more on the matter or seek assistance in submitting an International Arbitral Award for registration, then please contact our lawyers mentioned above.

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Disclaimer:

The foregoing material is the property of Hendra Soenardi and may not be used or relied upon by any other party without our prior written consent. The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.