Commercial Arbitration in Indonesia

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COMMERCIAL ARBITRATION IN INDONESIA1

By : Prof. Mr. Dr. Sudargo Gautama

I. INTRODUCTION.

The regulation on arbitration in the Republic of Indonesia is contained in

articles 615-651 of the Regulation on Civil Procedure (abbreviated: R.C.P.). which has been

in force since 1847 (state gazette 1847 no. 52 jo. 1849 no. 63). It is primary a copy of

the Dutch Code of Civil Procedure which in her turn is based on the French "Code de

Procedure Civile". The R.C.P. is in general no longer valid for Indonesia since the

occupation of the Netherlands Indies by the Japanese forces in 1942.2

However, the articles on arbitration have to be regarded as still valid untill

now. It is valid for persons living under European (Western) law (the population group of

Europeans and Foreign Orientals-Chinese), but it is also used for persons who in civil

affairs , according to the lawmaker, were placed on the group of persons l iving

under their own customary law (the population-group of Autochtonous Indonesians

and Foreign Orientals-non Chinese).3

1 Prasaran pads LAWASIA CONFERENCE di Jakarta, 1973. This paper a revised version of my essay :

"International Commercial Arbitration , The Republic of Indonesia", in the series "Arbitrage International

Commercial. International Commercial Arbitration" published by the "Union Internationale des Avocats", Rap porteur General

Pieter Sanders, Dalloz et Sirey (Paris), Martinus, Nyhoff (The Hague).

2Before the Second World War separate courts exist for the respective population-groups in the Netherlands Indies.

With the Japanese occupation the special courts for Europeans and Foreign Orientals the "Ratlen van Justine" were withdrawn

and transformed into courts for all population-groups, the Pengadilan Negeri (the "State Courts" a revised form of the

pre-war Landraden, the courts for indigenous population-group). Unification of Civil Courts and its procedural law was

obtained. The R.C.P. is no longer uphold and the Revised Indonesian Regulation (abbreviated R.I.R., Herziene Indonesisch

Reglement, Reglemen Indonesia Diperbaiki. State Gazette nr. 16/1848, nr. 44/1941) is now used by the State Courts. However,

the provisions of the R.C.P. may be used by the Civil Courts if it is required for the realisation of the civil law and the rules

contained in the R.I.R. are insufficient or do not exist at all.

3The inhabitants of the Netherlands Indies were according to law divided into three main population-groups :

First, the group of "Europeans", then the "Foreign Orientals" (subdivided into "Orientals-Chinese"

and the "Oriental-non Chinese", such Arabs, British-Indians, Malayans etc.) and lastly the "Natives" (indig-

enous population of Indonesia). (Sec. art. 163 and 131 of the "Ind ische Staatsregeling", the Constitution for the

Netherlands Indies). See Sudargo Gautama and R. Hornick, An Introduction to Indonesian Lawja:karta-Bandung 1973,Chapter 1:

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MAN ON STREET SOCIETY 2009



The articles concerning arbitration as stipulated in the above articles of the

R.C.P. have not been amended since their enforcement. The judge in a free Indonesia

regards the respective art icles of the R.C.P., as all the other art icles of i t, as

guidings-line,. so that he is not strictly bound to the text of the respective articles.4

Therefore the Indonesian Judge is free to set aside or to remould certain parts of the

regulat ions on arbi trat ion compl ied in the R.C.P. , which he deems no longer

suitable in the sphere of independence. For example the rules concerning the

impossibility to appoint women as arbitrators (art. 617 alines 2) could be mentioned

here. In independent Indonesia due respect is given to the status of women. As women are

on an equal footing with men, the limitations concerning the eligibility of women, have

to be regarded as no longer valid. We will discuss this issue further below.

As the R.C.P. for Indonesia is based on the Dutch Code of Civil Procedure, which is in

her turn founded on the French Code de Procedure Civile it is obvious that much what

is valid for arbitration in the Netherlands and for France is also valuable for Indonesia.

2. ARBITRATION IN PRACTICE.

Arbitration has been frequently practised in Indonesia, although due to the

general economic decl ine in previous years, the number of arbitration cases has dropped

significantly. There were permanent arbitral tribunals operative in several fields of

trade.The tribunals have been created by verious associations and trade organisations. For

example could be mentioned here :

1). The Association of Exporters of Indonesian Products (Organisasi Eksportir Hasil Bumi

Indonesia), in Jakarta;

2). The Indonesian Association of Fire Insurance Underwriters, Jakarta;

3). The Indonesian Accident Underwriters Association, Jakarta.

However, the above mentioned arbitration panels are at the moment inactive. The

Indonesian Association of Exporters and Indonesian Chamber of Commerce have

"The pluralism of Indonesian Law".

4 According Section II of the Transitory Regulation of the Constitution of 1945 now in force for

Indonesia, the old laws of the Netherlands Indies are generally still valid, "provided that they are not contrary to

the 1945 Constitution". Based on the last wordings the old codifications inherited from the Dutch were more

regarded as guidelines which could be set

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recently made preparations to re-active the institute of arbitration.

International contracts often mention arbitration by international commercial

arbitration tribunals, such as the International Chamber of Commerce in Paris, the

London Copra Associa tion, Chamber o f Commerce in Zurich, or Tokyo.

In some administrative fields related with trade and enterprises arbitration is often

resorted to. As example is worthwhile mentioning here, the arbitration procedure in labor

disputes arising between an employer and his employees, based on the "Emergency Act

no. 16 of 1951 for the Settlement of Labor Disputes (Undang-undang Darurat no. 16

tahun 1951 tentang penyelesaian perselisihan perburuhan, later revoked and amended

by Law no. 22 of 1957, State 1957 no. 42). The part ies in dispute may on their

own initiative or at the suggestion of the Regional Committee for the Settlement of

Labor Disputes submit their case to an arbitrator. Further is mentioned here the

provision adopted in the recent Foreign Capital Investment Law no. 1 of 1967

(State Gazette 1967 no. 1), where the arbitration procedure is used as guarantee for

the foreign investor in case his property is expropriated or nationalised. The

arbitrators will fix the amount, means and ways of payment of the compensation (art. alinea 2).

3. THE ARBITRATION AGREEMENT.

According to Indonesian law parties are given much freedom to enter into arbitral

agreements. Generally speaking any dispute which could be submitted before the

court may be set t led by way of arbitrat ion. In principle part ies may subject to

arbitration all rights of which they have free disposition. This is outlined in the

opening article concerning arbitration of the R.C.P. (art. 615). The same provision

is made by the legislator concerning the possibility to settle disputes by means of a

compromise (dading, perdamaian)5 So, disputes con-cerning gifts and baquests for

maintenance, lodging and clothing, concerning judical separation or divorce and the partition

of joint property, in short disputes concerning personal status and all other matters

concerning which a compromise may not be affected, are excluded from arbitration.

I t is specific for the situation and condition in Indonesia, that arbitration is

5See art. 1852 of the Indonesian Civil Code (abbreviated C.C.).

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impossible concerning cases which are subjected under the adat (or customary) law

sphere. Only disputes based on European or imported law may be submited to

arbitration. Adat or customary law disputes are by their very nature improper for

settle ment by arbitr ation . The adat law procedure of settling of disputes provides the

institution of local village tribunals, which in practice always strongly recommend a

peaceful settl emen t, so that the need for arbi tration is not seriously felt.

The capacity of parties to enter into arbitral agree-ments are subject to the

same rules as those governing contracts in general. Persons requiring special powers

from the Courts to enter into contracts need the same to refer to arbitration (art. 615

alinea 2 R.C.P.). Persons who require special Court powers to effect a private

arrangement or to sell property need the same disposition. Infants are incapable to act for

themselves. Their guardians can arrange arbitral agreements upon empowering in this

regard by the respective Judge. A bankrupt cannot make an arbitration arrangement,

the Trustee may do it for him, provided he has obtained an express authorisation to do

so.

Types of Arbitration Agreements.

There are two kinds of arbitral agreement.

A submission agreement is drawn in the case of an existing dispute (a). Further, the arbitral

clause in tended for disputes that may rise in the future is another possibility (pactum de

compromitendo) (b).

a) The submission.

The submission must be contained in a document signed by the parties or before

a notary (art. 618). The document must contain the subject matters in dispute. Further

it must contain the surnames and proper names of the parties and their domicile, the

names and domicile of the arbitrators. The last mentioned persons must always be

appointed in odd numbers.

The respective article states explicitly that non-ob-servance of these rules make

the submiss ion nul l and void (art. 618 alines 3).

b) The arbitral clause.

Parties are entirely free to choose the woriings of the arbitral clause. In practice

there are several forms used.

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Section 617 R.C.P. only mentioned "Women", but it is obvious that "married

women" is meant. This is in connection with the stipulation in the Civil Code that

married women are unable to act on their own, without their husband's assistance (art. 108,

110). However, since the new interpre tation of validit y o f the Civil Code came into

force, the said provision which regard women as lower than men, could no longer be

maintained. On September 3, 1963 the Supreme Court of Indonesia has issued

wellknown Circular Letter (no.3/1963) to all Courts in the country, stipulating i.a. that

respective articl es 108 and 110 of the C.C. are to be regarded as no longer valid.6

In the Draft of a new Civil Code for Indonesia it is required that to be capable

for the app oin tme nt as arbitrator, one must have the Indonesian nationality, be not

less than 25 years old, have no relationship in straight or sid e line up to the thi rd

degr ee wi th an y of the disputing parties, according to a certificate of the Police be of

good conduct and good morals not having any mental or physical disorders (art. 85).

As has been mentioned above, the arbitrators must always be nominated in odd

numbers . Arbit ration by three arbit rators i s cus tomary. Arbit ration by two

arbitrators is null and void. No umpire system exists in Indonesia.

a) Nomination of Arbitrators.

The subm issio n mu st c onta in th e na mes o f the arbitrators.

In the arbitral clause the names of arbitrators are seldom mentioned. This is

understandable, as the arbitration clause refer to future diputes only. As a rule the arbitral

clause indicates the procedure of appointing arbitrators when it becomes necessary.

For example the parties may state as follows :

"The party desiring to submit a case to arbitration must give the other partynotices of his intention. Three arbitrators shall be appointed by both parties bymutual agreement. If within four weeks from the date of such written noticethe parties are unable to agree on the selection of the Arbitrators, either of the parties may request the Chairman or in his absence or inability to act, the

acting Chairman of the respective Trade Association in Indonesia to appoint theArbitrators. The Arbitrators are bound to pronounce on the issue brought before them in a just and equitable manner (as amiables. compositeurs) .

6 See Gautama and Hornick, Introduction (note 2 supra), Chapter 7: "lawyers, Law Reform and the

Quest for Unity"; S. Gautama, Legal developments in Independent Indonesia, I "Law Asia" Dec. 1970 no. 1 at

157 ; Lev. Dan ie l S., "Th e lad y and the Ban yan Tree : Ci vil law change in Indonesia", XIV Am. J. Comp. L. (1965)

285.

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The Arbitrators shall determine the Rules of the Arbitration Procedure. In their final award the Arbitrators shall decide by which party or parties, the costs of Arbitration Preceedings, including the disbursements and the fees of theArbitrators and the fees and disbursements of the lawyers representing the parties7, shall be wholly or partial ly borne. The arbitrators shall take the

necessary measures in order that the original of the Award or Awards shall befield at the Court of Competent Jurisdict ion in Jakarta, in which ci ty theAwards shall be made. The powers to be granted to the Arbitrators shall continueunt il the fil ing referred to above has been made".

In the above example it has been agreed that both parties will together appoint

the three arbitrators. It is however more customary practice to stipulate, that each of

the parties appoint s one arbitrator and that the third arbitrator will be appointed by the

two arbitrators already nominated. This is a sort of "party arbitration" which is much

critised as the arbitrators nominated by the parties will as a matter of fact primarily playthe role of defendor of the interests of the party by whom he has been appointed.

With this in mind it is much better to refer to the rules of a rbitration of a connec ted

Institute or Organisation, with its rules of procedure, so that this difficulty would be

overcome.

Whenever the arbitral cl ause mention neither the names of the arbitrators nor a

method of appointing them, article 619 R.C.P. prescribes, that the parties should first

attempt to reach agreement about the nomination of the arbitrators. In case they fail to

come-to an agreement, the arbitrators must be nominated upon the request of the

most interested party, by the judge who would have been competent, if the matter had

not been submitted to arbitration.

The same solution is given by art. 651 in case one of the arbitrators should die

before the award was given.

b) Disqualification.

Arbit rators may only be disqual if ied for reasons appearing after thei r

nomination (art. 621 R.C.P.). The same reasons for disqualification of judges are also

applied to arbi trat ors. It is the dail y jud ge who wou ld be competent to deal with

7 According to the regulation on civil procedure now in force, the Revised Indonesian Regulation

(Reglemen Indonesia Diperbaharui, Herziene Indonesisch Reglement, S.G. nr . 44/1941, supra note 1) each

party has to pay his o wn la wyer. The lo osing party has to pa y onl y the Court costs (art. 182).

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the case if there was no arbitration, who is competent to adjudicate on the disqualification

of the arbitrators.

c) Fees and Liability.

The fees of the arbitrators are usual ly determined by themselves. I t i s

approp riate to ask for a sum in advance. No. need to say that the fees must remain

within the limits set by good faith.

Recently the arbitration procedure in Indonesia is in pract ice far more expens ive

than the ordinary Court procedure. For example the costs of arbitration before the ad

hoc Arbitration Commission of the Indonesian Association of Exporters of Indonesian

Products (Organi-sasi Eksportir Hasil Bumi Indonesia) has become so expensive that

plaintiffs hesitate to bring their case for arbitration.

The arbitrators are bound to complete their duties within the period specified

by the part ies in the sub-• miss ion. I f no s t ipulations are made by the par ties

concerning the time limit for arbitration, the term of six months set out by the law

will not be exceeded (art . 620 R.C.P.) . If the arbitrators fai l to fulf i ll this t ime

-limit, the parties can hold them liable to damages and interests (art. 623).

5. THE PROCEDURE.

The par ties are free to speci fy the t ime- limi ts and formali ties of the

arbitration proceedings. They may regulate this in the arbital agreement or they may

just refer to a lready existing arbitration rules which contain more detailed regulations.

The arbitrators may determine themselves the pro-cedure in case parties has

not don e so. As has bee n mentioned above, the law prescribes that whenever parties

have not regulated otherwise, the time limit within which a decis ion must have been mad e,

may not exceed six months after the acceptance of the nomination as arbitrators. It

is further stated that the arbitrators have to render judgement in accordance with the

rules of law, unless the par ties have given them freedom to act as "amiables

compositieurs" (art. 631 R.C.P.).

The Draft new Code of Civil Procedure for Indonesia gives more freedom to

the arbitrators. They are at liberty to judge according to the rules of law and or

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principles of justice as amiable compositeurs (art. 87).

It is cus toma ry in Ind one sian pra cti ce to giv e arbitrators the opportunity to

act as amiable compositeurs. This is in accordance with the general principles con-

cerning contracts in Indonesian civil law. All contracts must be executed in good

faith (art. 1338 C.C.). The arbitrators who are empowered to act as amiable com-

positeurs have also to observe the rules of law. They too are bound to state the reasons

of their award and to observe the imperative rules of law. It is only with the rules of

dispositive nature that they have a greater freedom.

The arbitrators may hear witnesses and call experts. If the last mentioned persons

refuse to appear before the arbitration commission an order to give evidence or to take

the oath, the Court intervenes upon an application of the party concerned (art. 630

R.C.P.). The Court will appoint a special Judge to conduct the hearings. In this case the

time-limits are suspended.

The same provis ions appear in the Draft new Code of Civil Procedure (art. 86). The

said article even elaborates further in case a witness living outside the territory of the

autonomous district must be heard. In that case the request for hearing will be delegated

to the local Judge of the witness' living quarters.

6. THE AR BITRAL AWARD.

a ) F o r m .

It is obvious that the arbitral award must contain the reasons on which it is

based (art. 632 R.C:P.). It must be signed by the arbitrators. In case the minority refuses

to sign, the other arbitrators make mention of this. The award will then have the same

effect as if it had been duly signed by all the arbi trators (art. 633 R. C.P.).

The awar d will furth er cont ain the name s of the parties and a summary of their

respective standpoints.

The Draft of a new Code on Civil Procedure is more elaborate on this point. The award

must beside the above mentioned items, also state the name and address of the

arbitrators, the basic points of the l i t igation which according to the arbitration

agreement has to be settled by arbitration; the conclusion and opinion of each of the

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arbitrators, the ultimate opinion of the arbitral tribunal concerning the whole and the

grounds on which the award is given; the dictum of the award and the place and date of

the award, signed by the arbitrators (art. 87).

b ) F i l i n g .

Within 14 days for Java - Madura and three months for the regions outside these

island, the original document contai ning the arbitral award must be field with the

Clerk of the Court of First Instance of the district in which the award was made (art.

634 R.C.P.). At the same time the act of appointment of the arbitrators must be filed

(art. 635 R.C.P.). If the arbitrators do not observe this duty to file, they are liable for

the damages which the non-obse rvanc e might cause. The award will not becomes null

and void because of non-observance to file.

c ) E n f o r c e m e n t .

The arbitral award is only executable after an order for enforcement or

"exequatur" is obtained from the President of the Court of First Instance in the

district where it has been made (art. 637 R.C.P.). The exequatur will be given in the

form prescribed for ordinary Court decisions. The "sacred" wordings "In the name of

Justice based on God Almighty" ("Demi keadilan berdasarkan Ketuhanan Yang Maha

Esa"), will be added above the original document and the official copy of the award

(art. 435 R.C.P.).8 An action to have the award set aside can be bro ugh t by wa y of an

objection against the exequatur (art. 645 R.C.P.). The Court fees are low, but varies

now from place to place, depending on the policy of the President of the Court and the

genera l index of living in the respective area.9

Before granting the order enforce the President of the Court has to examine

the content of the award. He will examine the basis of the award, the appointment of

the arbitrators and their competency to ensure that they have not gone beyond the

limits. The examination is or a summary nature. The part ies have the r ight to

8From the three Courts of First Instance in the Capital City o f Jakarta the Court of Jakarta-North and

East is the most expensive. It must be added however, that this Court functions best (speedy hearings and decisi-

ons).

9 See also art. 4 par 1 of Law no. 14 of 1970 concerning Basic Principles of Jurisdiction (Undang-undang

Kekuasaan Kehakiman).

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challenge the competence of the arbitrators in a latter stage of the procedure, i .e.

during the opposition for setting aside the award.

In practice leave to enforce is usually granted. The question is merely whether

prima facie the.award con-stitutes a valid one capable of being enforced.

The arbitral award with granted leave to enforce will be executed as an ordinary

decision in civi l procedures (art. 639 R.C.P.).

A more elaborate system of proc edure to obtain leave of enforcement is to be

found in the draft o f the new Code of Civil Procedure (art. 88). After the arbitral award

has been filed by the Court's Registrar, the President of the Court will decide whether

t he award may be execu ted o r not. He will examine whe ther the fo rma l

requirements concerning the arbitration agreement (art.83), the contents of the said

agreement (art. 84), the prere-quisites for the nomination of arbitrators (art. 85) have

been fulfilled. He is however not entitled to go into the merrits of the case. Within

two weeks after the award has been forwarded to the respective parties they have the

right to submit an opposit ion for set ting aside of the award. The Court wil l

immediately f ix the date for the hearing, which will be done with three Judges.

The decision after this hearing is final and binds the parties. Whenever the award has

been found in accordance with the formal requirements and the time limit mentioned

above has passed or the opposit ion for set ting aside has not been granted, the

President of the Court will grant the leave to enforce.

d) Provisional Enforcement, Arrest for Debt, For-feiture.

According to the text of art. 647 R.C.P. the arbitral award may contain an arrest

for debt. The debtor may be physically constraint in the same cases as in ordinary

Court proceedings Judges may grant such measures.

In independent Indonesia such measures of physical a rrest for the payment of

debts are regarded as to be out of date. Physical arrest for pecuniary debts in civil cases is

no longer practised.10 The forfei ture of a sum of money in respect o f every day

10See Circular Letter Supreme Court no.2/1964 of 22-1-1964. In my opinion this is one of the reasons why civil

court proceedings are no longer respected by the public and credi tors often try to transform their civil claims into criminal

cases.

Cp. Sidarta, P.H., S.H., "Mengapa orang lebih condong menyelesaikan tunt utan-tun tutan perda ta diluar Pengadil an?"

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durin g whi ch the award is not complied with is often added. In Indonesian practice of

recent years generally no provisional enforcement is realised. This is due to a special

Instruction of the President of the Supreme Court to all the Courts in Indonesia, that

it is adv isab le not to grant leaves for provisional enforcement of Court's decisions.11

Moreover provisional enforcement makes sense only in cases where the right to appeal

exists. This is generally not so with arbitration cases.

e ) P u b l i c a t i o n .

There is no special publication of arbitral awards in Indonesia. Even the publication of

Court's decision is not yet as regular and continu eous as the legal profession hopes.12

f) Fiscal costs.

There are no specia l t axes connected wi th the enforcement of a rb it ra l

awards. The Court's fees are generally speaking low. According to the Indonesian Law

on civil procedure it is not necessary to have the assistance of a lawyer to request for

enforcement or to appear before the Court.13

7 . M E A N S O F R E C O U R S E

a ) A p p e l .

In general no higher provision is open against the arbitral award as parties in

practice usually exclude the possibility of appeal in the arbitration agreement. No

(Why people prefer to settle civil claims out of Court), 11 Hukum dan Keadilan (Law and Justice), Magazine of the

Indonesian Bar Association.

11Circular Letter Supreme Court of 10-7.1964 no. 750/P/3079/M/1964 (execution only with Supreme Court's

approval), later on revoked by Supreme Court Circular Letter of May 17, 1971 No. M.A./Pemb./953/71 (prior execution

possible if in accordance with art. 180 par. 1 o f the Revised Indonesian Regulation for Java and Madura) and art. 191 par 1

Regulation on Procedure for the Outer Provinces.

12The regular publication of Supreme Court's decision. (Himpunan Keputusan-Keputusan Mahkamah Agung)

recently is a good start.

13This is in contrast with the pre-war Regulation on Civil Procedure (R.C.P.) valid for the so-called "European

Courts" (Raden van justitie, Courts of Justice).

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cassation is possible. Appeal is only open whenever the parties have not exclude it in

their submission or in the arbitration clause. Moreover the amount involved must be at

least Rp.25.000,- (twenty five thousand Rupiahs).14 The appeal is forwarded to the Supreme

Court. A more detailed regulation of the appeal procedure against arbitral awards is given in the

Law of the Supreme Court (UndangUndang Mahkamah Agung Indonesia, State Gazette 1950

no. 50).

The request for appeal has to be submitted in writing to the Chief Justice within

the period of one month of the date of acknowledgement of the award to the respective

party. I t is to be accompanied by a copy of the said award and other relevant

documents. Both parties may submit their written arguments and other instruments

and documents to the Registrar of the Supreme Court, forwarding a copy to the other

party. Before rendering a decision on the matter, the Supreme Court may order the

personal appearance of the parties in dispute.

The execution of the Supreme Court's decision in appeal of arbitral awards is

effected in the same manner as an ordinary decision of the Court of First Instance in

civil matters (art. 108-111). The Law of the Supreme Court is however regarded as no

longer valid now, i.e. after the coming int o force of the Law on the Administration of

Justice in the general Courts and the Supreme Court (Undang-undang tentang Pengadilan

dalam lingkung-an Peradilan Umum dan Mahkamah Agung, no. 13 of 1965, State

Gaze tte 19 65 no . 70 ) on Jul y 6, 19 65 . But, as the replacing law has no provisions yet

concerning the appeal procedure of arbitral awards the above mentioned articles of the

Law of the Supreme Court 1950 are in today's practice still regarded and used as

guidance in this respect.

b)"Cassation" and "Requete-civile "

"Cassation" on points of law before the Supreme Court and "requite-civile" is not

allowed (art. 642 R.C.P.). Formal "opposition" (verzet, perlawanan) against the arbitral

award is excluded too (art. 636 R. C. P.). As outlined above, it is however possible to

submit a request to set aside the enforcement of an arbitral award. This is i n pra ct ice

14Approx. 600 C.S. dollars (1 US.$= Rp. 415,-).

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quite similar to an opposit ion al though the procedure is launched not directly

against the award but towards the enforcement thereof.

c)The Nullity of the Award.

(1) Lack of jurisdiction.

It is possible that an action for the nullity of an award is brought before the Court on

the ground that the very basis of arbitration is lacking. The arbitrator are absolutely

incompetent to arbitrate because there is no valid arbitration agreement. Such an

action may be brought in the Court of the defendant 's domicil e. No special

formalities are required. The request is not subject to a time limit.

(2) Action Setting Aside the Award.

Articles 643-646 provides proceedings for setting aside arbitral awards by

arbitrators who did have jurisdic-tion, but have made serious mistakes. The action can

be brought in c ase the award exceed s th e s cope of t he submission. i .e. beyond the

scope of the mandate which the parties have given. Another ground is if the award

was made on a void submission or that has expired. Further. it is open when the

award has been made by only some arbitrators, not authorised to decide in the

absence of others. It is also possible to bring the action if the arbitrators have decided

concerning matters which were not claimed or were in excess of what was claimed. T hi s

is in accordance with the general rule of civil procedure. 15 The award is also open

to the said action if it contains contradictory decisions. Further, if the arbitrators

have failed to decide on one or several of the matters listed in the submission. Or, if

procedural formali-ties prescribed on penalty of nullity have been disregarded, but only in

cases where due to a specific clause to that effect, the arbitrators were obliged to observe

the ordinary rules of civil procedure. Furthermore, if the award was based on documents

which after the award was given, were recognised or declared to be false. Also, if after

the making of the award, documents of a decisive nature withheld by one of the parties

were discovered. And lastly,. if the award is based on fraud committed during the

proceedings and duly established. It is obvious that the grounds for the action of

15Cp. art. 189 par 3 Revised Indonesian Regulation.

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setting aside the award are in general the same as the grounds for the "requete-civile"

procedure, which is, as mentioned above, not possible regarding arbitral awards.

The draft of a new Code of Civil Procedure does not provide for such an elaborate

enumeration of the grounds for the action of setting aside the award. As mentioned

above, during the erocedure of enforcement, the President of the Court will examine

whether the requirements, for the arbitration procedure and the arbitration agreement

are fulfilled. During this period, the losing party has the possibility to submit an

opposition against the enforcement (art. 88).

8. ENFORCEMENT OF FOREIGN ARBITRAL AWARDS.

a) The Convent ion of Geneva of 1927.

Based on article 10 alinea 2 of the Convention of Geneva of 26 September

1927, the Netherlands Government has acknowledged her intention to have the said

Convention also valid for the territory of the Netherlands. Indies. On' April 28, 1931

this Convent ion came into operation for the former Netherlands Indies (State Gazette

1933 no. 131).

As this Convention has not been explicity revoked by the Government of the

Republic of Indonesia, based on the general principles of State succession, the primacy of

international law and the Transfer Agreement (Overgangsovereenkomst) of the Round Table

Conference held in connection with the transfer of sovereignty by the Netherlands to

the Federal Republic of Indonesia (Ronde Tafel Conferentie) this Convention must be

deemed still valid for Indonesia. Article 5 of the Transfer Agreement stated that

international agreements which were in force for the territory of the Federal Republic

of Indonesia remain valid for the Republic provided the respective agreements are

not terminated by the Republic herself. Although the Agreements of the Round Table

Conference are according to Indonesian law no longer valid, as the agreements have been

explicitly revoked, the stipulations concerning the valid ity of international agreements for

the territory of the Republic of Indonesia are still uphold.

A special regulation was enacted by the Netherlands Indies government concerning

the enforcement of arbitral awards made in one of the countries which are signatories to the

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Geneva Convention. By King's Decision of December 19, 1932 No. 82 (Stat e Gazette

1933 no. 133) special provisions were issued for the territory of the former Dutch

colony. Before the arbitral award may be enforced in Indonesia special leave must be

obtained from the President of the Court of the district where the awards must be

enforce.

This leave to enforce must be requested through the services of a solicitor. The

President of the Court will make certain investigations. At least he has to call all the

parties to appear in Court . After the hearing and examination of the documents

handed over to him by the parties, the President of the Court will give a decision granting

the leave to enforce or refusing it. His decision will, be accompanied by considerations

and pronounced in public.

The leave to enforce wil l be valid against al l the part ies and within the

whole ter r i tory of Indonesia (ar t . 3) . The decis ion is not open for opposi t ion.

It is however open for appeal within four weeks (art. 4 alines 2). According to the

wordings of the said art icle, appeal must be forwarded to the Supreme Court of

Indonesia.

The investigations into the foreign arbitral award effected by the President of the

Court go deeper than the summary examination undertaken by the same Judge in connection

with the Indonesian arbitral award.

The enforcement of the foreign arbitral award should not be against the public

policy or principles of public Law of Indonesia.

b) Awards of countries outside the Convention.

In order to achieve enforcement of an award, which is not governed by the

Gene va Conv entio n or other specific Treaty, a judgement of an Indonesian Court of

Law must be obtained. The applicant will base his request both on the arbitral agreement

made with the Indonesian party and on the award made in pursuance thereof and apply

for recognition of arbitral award. The request will be submitted on the Court of domicile

of the Indonesian debtor. Ordinary Court proceedings will take place.

The arbitral award will be in general recognised, without new examination of

the case, provided that it is valid and contains nothing contrary to public policy.

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Documents

Commercial Arbitration in Indonesia