BADAN ARBITRASE NASIONAL INDONESIA

B A N I A R B I T R A T I O N C E N T E R
Jakarta Office • Wahana Graha Building, 2nd Floor, Jl. Mampang Prapatan No. 2, Jakarta 12760
Phone : +62 21 7940542 • Fax : +62 21 7940543
e-mail : [email protected] • http://www.bani-arb.org

Advisor y Board
Prof. Dr. Mochtar Kusuma Atmadja, S.H., LL.M.
Prof. Dr. I. H. Ph. Diederiks-Verschoor
Prof. Dr. Karl-Heinz Böckstiegel

Governing Board
Chairman
Prof. Dr. H. Priyatna Abdurrasyid , S.H. FCBArb.

Members
M. Husseyn Umar
Harianto Sunidja
N. Krisnawenda

BANI Bandung Office Jl.Tubagus Ismail Bawah no. 2, Bandung 40132 •

Tel: 022-2508649/2506246 • Fax: 022-2508649/ 2535307 •
e-mail: [email protected]; banibandung@plasa .com
BANI Surabaya Office Jl. Ketintang Baru II/1-3, Surabaya • Tel: 031-8287414 • Fax: 031-8290522
BANI Denpasar Office Jl. Melati No.21, Denpasar 80233, Bali • Tel: 0361-234846 • Fax: 0361-234846
BANI Pontianak Office Jl. Imam Bonjol No. 402, Pontianak 78123, Kalimatan Barat •
Tel: 0561 - 585262 • Fax: 0561 585261
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BANI Batam Office Gedung Dana Graha Lt. 3, Ruang 307 A Jl. Imam Bonjol, Nagoya, Batam •
Tel: 0778-450539 • Fax: 0778-450537
BANI Palembang Office Gedung KADIN Prov. Sumatera Selatan Lt. 3, Jl. Letkol Iskandar
Kompleks Ilir Barat Permai Blok D1 No. 27, Palembang 30134 •
Tel: 0711-352793 • Fax: 0711-356187
 INDONESIA ARBITRATION
QUARTERLY NEWSLETTER
Volume III / 2008 From The Editor
Editorial Board Contents
It is now widely accepted within both national and international business
From The Editor communities that businesses often attempt to avoid the regular litigation
Editor -in-Chief 
and arbitration process by pursuing alternative forms of dispute resolution
M. Husseyn Umar Articles that are more closely tailored to the specific interests of their business. Par-
Why Do We Study ADR ties now have before then a wide variety of dispute resolution processes in-
Executive Editor 
I Made Widnyana................................ 2 cluding litigation, negotiation, mediation, arbitration and various hybrid
Madjedi Hasan
 Hybrid Arbitration In BANI forms of ADR which combine features of various models in order to attempt
N. Krisnawenda.................................... 7 to secure the benefits from each. This includes combining mediation and
Editors
arbitration into a single two step process. Such process is traditional form
M. Husseyn Umar  Managing Cost In Arbitration a neutral brings the parties together and encourages them to settle through
Harianto Sunidja M. Husseyn Umar............................... 13
mediation; if the mediation does not resolve the dispute the same neutral
Madjedi Hasan
 Certain Indonesian commences a fresh arbitration hearing.
Huala Adolf Contract Law Principles
Junaedy Ganie That Are Relevant In this issue we are pleased to present two articles on the subject. Mr. Widyana
in International Arbitration from BANI office in Denpasar discusses why we need to study ADR, while
Secretary Fred B.G. Tumbuan............................ 19 Ms. Krisnawenda will talk one of the hybrid forms of ADR that has been
Ade Teti S.  Moot Court and Arbitration applied in BANI. Also, in this issue our three listed arbitrators, namely
By Nurdjanah A.S.............................. 34 Messrs. Husseyn Umar, Fred G. Tumbuan and Mrs. Nurdjanah AS provide
Distribution overview, respectively, on the managing arbitration cost, certain principles
News
Rizky Muzainurasti of Indonesia contract law that relevant in International Arbitration and the
 Training On Arbitration And ADR the Moot Court, which is an extracurricular activity at many law schools as
In Bandung educational tool.
 ADR in Asia Conference We do hope you enjoy reading it. Again we would like to remind that if you
Arbitration And Mediation happen to have news items or articles that you would like us to include in
Global Platforms For Dispute
Resolution the next newsletter please do not hesitate to contact the BANI Secretariat
BULETIN TRIWULAN with the necessary details.
ARBITRASE INDONESIA Appendices
ISSN No. 1978-8398 June 2008
Volume III, 2008  A. List of BANI Arbitrators
BADAN ARBITRASE
NASIONAL INDONESIA  B. Scope of BANI Rules &
(BANI ARBITRATION CENTER) Procedures

INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 

 Why Do We Study ADR
 I Made Widnyana
Why Do We Study ADR Needs To Study ADR
In the daily life of the original legal society (traditional legal community),
a form of ADR has actually been performed and practiced. Merely, the termi-
Abstrak nology being used and its procedures were not precisely the same as the ones
Makalah ini membahas Alternatif Peyelesaian Sengketa, di mana para applied in modem ADR. In a village community, the life pattern is simple, exces-
pihak membuat putusan akhir sendiri mengenai pengakhiran sengketa. sively bound, and influenced by tradition and custom, and remains in force. Not-
Proses ini berbentuk bantuan yang terstruktur dalam melakukan negosiasi withstanding, if we examine carefully whatever is done by the traditional com-
atau mediasi, di mana pihak ketiga (mediator) tidak membuat putusan munity, especially on dispute resolution, the principles are similar to the ones in
tetapi hanya memfasilitasi melalui proses yang terstruktur tersebut. ADR. (I Made Widnyana, 2007: 35)
Untuk mencapai solusi berlandaskan pada kerja sama yang umumnya Studying ADR will help you to be a better lawyer. For law students to focus
terkenal sebagai “win-win solution” tersebut para pihak harus memperluas exclusively on the litigation process is like medical students studying only sur-
pemikirannya dan berusaha mencari solusi yang kreatif yang memenuhi gery as a means of curing illness. Of course, that is not what medical students do.
persyaratan masing-masing pihak yang bersengketa. They study an extensive range of subjects for the treatment and cure of illnesses.
Law students too must extend their problem-solving focus beyond the litiga-
tion arena. Law students cannot afford to ignore development in ADR as many
Introduction of these processes become institutionalized within the judicial system in court-
Dispute Resolution commonly called “Alternative Dispute Resolution” is a annexed programs. Law students must understand ADR processes and develop
series of processes intended to settle dispute between (among) parties. At first the skills which are necessary to use them. It is important to learn to identify the
dispute settlement is looked into as an alternative to a judge’s decision, on a dis- factors which make a particular method the process of choice. (Jacqueline M.
pute in accordance with law. Nolan-Haley, 1992: 3)

The ADR is a statement used by many writers to explain growth that shows It is the basic right of everyone in the society to be able to demand and get a
applicable techniques to settle dispute without formal decision obtained through quick decision on a problem. But the fact now is not like that. Use of present legal
arbitration and court. The ADR mechanism usually includes an independent systems doesn’t guarantee a quick process with a low cost. Therefore, nowadays
mediator acting as the third party or the neutral party. In Indonesian Law No. 30 our societies are looking for other relevant mechanisms to solve this problem. A
of 1999 Concerning “Arbitration and Alternative Dispute Resolution”, the Arti- system that is likely to be a promising one is the Alternative Dispute Resolution
cle 1.10 states that “Alternative Dispute Resolution (ADR) shall mean a mecha- (ADR). (I Made Widnyana, 2007:23)
nism for the resolution of disputes or differences of opinion through procedures
Characteristic of the Dispute Resolution Process
agreed upon by the parties, i.e. resolution outside the courts by consultation,
negotiation, mediation, conciliation, or expert assessment”. The main characteristic of the Dispute Resolution Process is that the parties
make decision upon the result their dispute that is the final decision. The proc-
So, the types of Alternative Dispute Resolution based on this law are: consulta-
ess is the forms of structured assistance of negotiation or mediation, in which
tion, negotiation, mediation, conciliation and expert assessment. In my opinion,
the third party (mediator/interviewer) doesn’t make any decision, but applies a
arbitration is also a type of ADR because arbitration shall mean a mechanism
structured process to help parties to settle their dispute. Control on final resolu-
of settling civil disputes outside the general courts based upon an arbitration
tion forms is still with the parties.
agreement entered into in writing by the disputing Parties (see Article 1 point 1
of Indonesian Law No. 30 of 1999).
 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 
 Why Do We Study ADR Why Do We Study ADR

In traditional process of decision through court and arbitration “winner takes • Choice of Neutral • Parties can choose a neutral whom they respect and trust and
all”. In the system of ADR, it tries to apply a co-operative solution. “Co-operative who has expertise in the area of their dispute. This save time and reduces
solutions” which is commonly called “win-win solution” is a resolution in which cost.
the parties feel they equally win. To find a co-operative solution requires people
• Enhanced Relationship • Because the informal processes are consensual and strive
to expand their thinking and to look for creative solutions that fulfill the require-
for co¬operative solutions rather than those necessary according to the
ments of each of the parties in dispute.
rules of law, often the parties come away with solutions that satisfy more
Advantages of the Dispute Resolution of all they needs. This enhances relationships between them. Solution that
people agree to themselves and which they feel have advantaged them are
The most commonly cited advantages for the Dispute Resolution processes usually more readily adhered to than those that have been imposed. If one
are: side wins and the other side loses, as in the adversarial processes, usually
• Quicker • Settlements are usually achieved within weeks or months of starting the loser feels resentment and has no commitment to the solution but
the process rather than within months and years as can occur within ad- only adheres to it because of the fear of punitive enforcement action. This
judication and arbitration. situation does little to enhance the relationship between the parties.
• Cheaper • With settlement being achieved earlier, there are usually less legal fees, • Remedies • In the DR processes a greater range of remedies is available than in
witness expenses and (in commercial disputes) fewer lost business op- litigation. Renegotiation of a contract, considerations of non-legal issues
portunities whilst management time and business finance are set aside and of non-legal factors (such as the long-term business relationship of
to fight the litigation. However disputants do have to pay for the neutral the parties and emotional impediments to rational decision making) can
intervener of their choice as they do in arbitration. take place in reaching settlement.
• Informal • The rules of procedure and evidence in the adversarial processes are • More Disputants • As the parties are not limited to those the law regards has hav-
often incomprehensible to non-initiates, but with the consensual process ing standing, all parties actually affected by the dispute can be present or
the disputants can organize meeting times and places that are convenient represented within the process.
to them and can organize rules for the process that suit their particular • Finality • The DR processes that are voluntary and use the private providers
requirements. They can emphasize what is important to them regardless eliminate the appeal processes and achieve true finality of resolution. The
of its legal relevance. Consequentially, the disputants have a better under- agreed result is enforced as a contract. The settlement is embodied in a
standing of the process and, accordingly, are able to contribute more. They contract signed by the parties at the end of the “hearing”. Because the par-
are more in control of the resolution of their own dispute. ties have taken an active part in crafting the solution, the “sticking” rate
• Confidentiality • As these processes are private they keep the disputants from for ADR settlements is usually high. Parties are satisfied with the result
adverse publicity and ensure trade secrets are not made public. Within they have worked out themselves and usually abide by it.
the process, communications, including those made privately to the third • Hearing Certainty • The time and location of the hearing is at the parties’ choice.
party, are confidential and this tends to encourage more open and honest If the parties so desire, the “hearing” can continue as long as necessary to
exchanges thus helping the third party to assist the parties achieve resolu- achieve finality on the one day.
tion.

 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 
 Why Do We Study ADR
 N. Krisnawenda
• Own Procedure • Disputants can individualize the procedure to their require-
ments. Factors such as time, hearing date, issues statement rather than
Hybrid Arbitration In BANI
pleadings, truncated times for replies to documents can be laid down by
the parties themselves. This control can be used to overcome any fear that
Abstrak
DR processes can be used to delay the resolution of a dispute.
Salah satu bentuk penyelesaian sengketa bisnis yang mulai banyak
• Clarify Issues • DR processes can narrow, or at least clarify, the issues for trial even
digunakan adalah penyelsaian melalui arbitrase dan mediasi. Arbitrase
if final settlement is not reached within the process. This should save costs
adalah suatu cara penyelesaian sengketa di mana para pihak mengajukan
at any trial that eventuates (Jennifer David, 1994: 6-7)
sengketanya kepada pihak ketiga yang netral yang kemudian membuat
Bibliography putusan mengenai penyelesaian sengketa. Putusannya mengikat para
Brams, Steven J. & Taylor Alan D. 1999, The Win-Win Solution, W.W. Norton & Company, New
pihak dan karenanya para pihak memegang peran penting dalam
York, London. pemilihan arbiter Sementara ini dalam konsiliasi dan mediasi, peran pihak
David, Jennifer1994, Mediation for Lawyers Manual, Dispute Resolution Seminar, Universitas ketiga dibatasi hanya sebagai fasilitator yang memperlancar komunikasi
Udayana dan negosiasi para pihak. Dengan demikian, proses mediasi mendorong
Nolan-Haley, Jacqueline M 1992, Alternative Dispute Resolution, West Publishing Co, St. Paul, para pihak untuk bekerja sama mencapai penyelesaian dan menentukan
MN 55164.
dengan masukan dari mediator hasil-hasil yang dipandang adil dan wajar.
Widnyana, I Made, 2007, Alternatif Penyelesaian Sengketa, Indonesian Business Law Center
(IDLC) and Kantor Hukum Gani Djemat & Partners, Jakarta. Salah satu kritik dari mediasi adalah putusannya tidak mengikat,
sehingga apabila kesepakatan tidak tercapai atau salah satu pihak
tidak mau mematuhi apa yang sudah disepakati maka mereka harus
menyelesaikan sengketanya melalui proses yang lain seperti arbitrase dan
I Made Widnyana litigasi. Berlandaskan pada manfaat dan kekurangan dari arbitrase dan
Head of BANI office in Denpasar (Bali)
mediasi, maka telah dikembangkan proses hybrid yang menggabungkan
sifat-sifat yang baik dari arbitrase dan mediasi. Proses hybrid ini umumnya
digunakan untuk situasi-situasi khusus (specific) di mana para pihak yakin
bahwa penyelesaian sengketa memerlukan penengah yang mampu untuk
memainkan dua peran.
Di Indonesia, BANI telah mengembangkan hybrid arbitration sejak
2003. Proses yang digunakan adalah arbitration-mediation-arbitration
(arb-med-arb). Proses dimulai dengan arbitrase, di mana dalam sidang
pertama arbiter akan menawarkan untuk menyelesaikan sengketa dengan
mediasi, yang dapat dilakukan para pihak dengan atau tanpa mediator.
Apabila mediasi berhasil mencapai kesepakatan baik keseluruhan maupun
hanya sebagian, maka hasilnya dapat dituangkan dalam putusan arbitrase.
Sementara apabila gagal mencapai kesepakatan, para pihak akan
mengajukan hal-hal yang belum disepakati kepada arbitrase.

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 Hybrid Arbitration In BANI Hybrid Arbitration In BANI

There are many forms of dispute resolution that have developed over the years. Thus, the mediation process encourages the parties to work together to reach,
The best-known and most widely implemented system is that of arbitration and with assistance from the mediator, an amicable resolution of their disputes, and
mediation. Arbitration differs from litigation in that it is a third-party settle- to determine for themselves –with the input and advice of counsel– the result
ment process that uses citizen panels of arbitrators instead of a judge or jury. or range of the results that the parties believe is fair and reasonable under the
Investment agreements, construction contracts, and insurance contracts are but circumstances. The mediator, then, controls only the dispute resolution process;
a few of the types of agreements and contracts that can include provisions for he or she renders no decision with the respect to the substance of the dispute.
arbitration of disputes. The decision and award made by the arbitrator typically Instead, the parties themselves determine that result. Mediations are especially
is final and binding on the parties, and not subject to make any appeal. Arbitra- helpful for parties who have issues other than just settlement to deal with. Often
tion allows for considerably more interactions among the people involved than the parties are a lot closer to settlement than they think - the problem is with
traditional courtroom justice. Again, large membership organizations, such as communication
BANI, have established and proven rules and procedures, and can provide a list
One criticism of mediation is that the result is non final and binding, so if a
of experienced neutrals who can serve as arbitrators.
settlement is not reached, or one party does not want to do what they agreed,
Arbitration is a method of resolving a dispute in which the disputants present the parties must move to another process. Mediation, is a non adversarial, non-
their case to an impartial third party, who then makes a decision for them which binding dispute resolution process in which the disputing parties, either with
resolves the conflict. Since most arbitration hearings are binding on the par- or without their attorney present, meet with a third neutral party (the media-
ties, it is imperative that the parties have an active role in the selection of the tor) in a good faith effort to achieve a prompt, economical, confidential, fair and
arbitrator, or arbitrators. On the other hand, arbitration - while final and bind- mutually desirable resolution of some or all disputed issues. While it is true that
ing, wrenches control over the outcome of the dispute away from the disputants, not reaching a settlement through mediation means that some other resolution
places it in the hands of a third party decision-maker and reduces the disputants process must then be used. The mediation process is not always settle the dis-
to the role of observer rather than active participants in the process of resolving putes. Parties who don’t reach settlement can then move on to arbitration or
their own dispute. Then, once the arbitrator renders a decision on behalf of the litigation.
parties, that are bound by it and it generally is not subject to appeal, even if the
However, the voluntary, nonbinding mature of mediation is the target of one
arbitrator’s decision is based on a mistake or misapplication of law or fact. These
of the few criticisms leveled against the process by parties who seek the kind of
factors have in recent years, caused a number of disputants to opt for mediation
finality of result that arbitration offers. Given the benefits and perceived draw-
over arbitration as the preferred means for resolving their disputes.
backs of arbitration and mediation, there exists today a hybrid process that
Conciliation and mediation have come to be used as enhancements to com- combines the best attribute of mediation and arbitration. That process are med-
munication and negotiation as opposed to arbitrary settlements by third par- arb, arb-med or arb-med-arb. Today, many of these processes are being com-
ties, providing settlement options. Through the intervention and supervision of bined into “hybrids” to be applied to specific situations in order to achieve spe-
a trained, professional mediator, who serves as a facilitator of communication cific goals. Hybrid processes are generally used when parties believe a dispute
between the parties and as a catalyst for reaching agreement between the oppos- requires elements of multiple processes and a practitioner is skillful enough to
ing interests, the parties become active participants in the dispute resolution fill two roles.
process, and help forge the terms and conditions of their own settlement. In the
Med-arb combines the best features of mediation and arbitration into a single,
mediation, a third party simply helps the disputants develop a solution on their
two-step hybrid process. In med-arb, the disputing parties, either on their own
own.
or with the assistance of counsel agree in advance to resolve their differences
through mediation. With the understanding that, if mediation proves wholly or

 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 
 Hybrid Arbitration In BANI Hybrid Arbitration In BANI

partially unsuccessful, or if the mediation process extends beyond a predeter- negotiation, although the Rules and Procedures have only be made available in
mined deadline with no agreement on all or some of the issues, the parties will 2006. The BANI hybrid procedure is arbitration-mediation-arbitration (here-
submit any and all unresolved issues to arbitration, the arbitration is performed after called arb-med-arb). The process begins with the arbitration, in which at
by a pre-designated arbitrator or panel of arbitrator. Any and all terms and con- the first hearing, the arbitrator(s) will offer to the parties to resolve their differ-
ditions of settlement agreed to by the disputants in mediation are memorialized ences through mediation. If they agree, the arbitration hearing will temporarily
in a memorandum of agreement prepared by the mediator before commence- be suspended and the parties will then mediate which can be facilitated by the
ment of the arbitration phase. Unlike the nonbinding memorandum of agree- arbitrator(s) or without facilitation by third parties. If the mediation is success-
ment prepared by the mediator in the traditional mediation process, the memo- ful it will be concluded with an agreement by the parties and may be made as
randum prepared by the mediator in med-arb typically, is by prior agreement of an arbitration award, thereby the award is final and binding. All documents/data
the parties, binding upon them for the arbitration phase. used in the mediation will not be used in consideration in the arbitration award,
unless the parties request. If mediation proves wholly or partially unsuccessful,
Accordingly, the med-arb process provides the disputants with the best that
or if the mediation process extends beyond a predetermined deadline with no
mediation and arbitration have to offer. It furnishes them with a clean incentive
agreement on all or some of the issues, the parties will submit any and all unre-
to resolve the disputed issues promptly, affordably, amicably and to their mutual
solved issues to arbitration.
satisfaction through mediation, by holding open the prospect of an adverse,
non appealable determination by the arbitrator if a mediated settlement is not The past five years data show that the application of hybrid arbitration in BANI
reached. By the same token, med-arb promises the finality of a binding arbi- has provided the award that are more acceptable to the disputants. The admissi-
trated result with respect to unresolved issues, thereby avoiding the necessity bility and appropriateness for an arbitrator to act conciliator or mediator such as
of a costly, protracted, appeal-ridden litigation. The hybrid approach thereby practiced in BANI is among the most controversial issues among international
encourages maximum autonomy, participation and creative problem-solving by arbitration practitioners. The views and practices in this respect differ widely.
the disputants through mediation, while ensuring that, in any event, a final, bind- While some regarded that the combination is desirable, others regarded concilia-
ing resolution of all issues is near at hand. tion efforts by the arbitrator as inappropriate. The differences in the views clearly
have their origin in different legal cultures.
The other hybrid procedure is arbitration-mediation (hereafter called arb-
med), in which the order is reversed, with the parties arbitrating first, followed For instance, in the Common Law countries a judge is not permitted to be
by mediation. At the conclusion of the arbitration, the arbitrator(s) make a bind- actively involved in settlement facilitation. This is reflected in the arbitration
ing decision which is memorialized but not disclosed to the parties. The parties practice of some countries. In the Civil Law countries, the position varies; in
then mediate and if successful it will be concluded with an agreement by the France, for example, conciliation is expressly mentioned as one of the functions
parties. Under such process the result is not final and binding since the arbitra- of the judge (also applies to arbitrator). In Germany, Austria and Netherlands, the
tion process has been terminated. If not successful in arriving at a resolution the judge is held at any stage of the proceedings to see an amicable settlement of the
arbitrators announce their decision and the parties are bound by the decision. dispute. In Mexico, the combination is not admitted and conciliation efforts are
This procedure places the parties during the mediation phase, in a position of performed by a court official different from the judge trying the case. In Japan,
deciding whether they want to control the outcome of their dispute by work- a mediator who is also serving as arbitrator will be more effective in facilitat-
ing out a solution on whether they want to be bound by the unknown solution ing the parties to reach agreement, resulting in peace settlement between the
imposed upon them by the arbitrator(s). parties.
In Indonesia, BANI arbitration center which is founded thirty years ago has In conclusion, the hybrid arbitration would promote the disputants to resolve
since 2003 used the hybrid arbitration involving mediation, conciliation and the dispute with the end result of as they wish, because they are the ones who

10 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 11
 Hybrid Arbitration In BANI
 M. Husseyn Umar
make the decision. On the other hand, the agreement resulted from hybrid arbi-
tration has legal binding since the decision will become the arbitration award
Managing Cost In Arbitration
and “executable”. The other positive point is that the award originates from the
agreement that has considered the optimum interest of the parties, so the execu- Abstrak
tion will not require court decision.
Salah satu elemen dalam mekanisme penyelesaian sengketa yang efisien
adalah biaya perkara. Secara resmi, biaya berperkara di pengadilan
N. Krisnawenda di Indonesia tidak mahal, Namun demikian, prinsip ini tidak mudah
Member of BANI’s Governing Board and listed arbitrator at BANI Arbitration Center diterapkan karena berbagai hal, antara lain perkara tersebut mungkin
sangat kompleks dan berjalan cukup lama termasuk proses banding,
kasasi dan peninjauan kembali. Di sisi lain biaya berperkara di forum
arbitrase lebih terukur, yang berarti bahwa pihak yang berkontrak dapat
mengendalikan biaya tersebut. Namun demikian biaya berpekara melalui
arbitrase tersebut tidak selalu murah, dibandingkan dengan biaya litigasi di
pengadilan. Biaya yang tinggi dan waktu yang lama dapat disebabkan oleh
aturan mengenai prosedur dan kemungkinan peninjauan kembali putusan
untuk kondisi-kondisi tertentu (seperti ISCID) dan atau sikap tidak
koperatif dari salah satu atau para pihak atau perilaku arbiter.
Dalam arbitrase, biaya yang dibebankan kepada para pihak umumnya
mencakup biaya pendaftaran dan biaya untuk administrasi, fasilitas dan
honor arbiter, yang terakhir umumnya ditetapkan sebagai persentase dari
besarnya gugatan. Biaya ini akan meningkat apabila ada rekonpensi. Oleh
karena itu, untuk mengendalikan biaya berperkara ini pertama-tama
harus dilakukan dengan rasionalisasi jumlah klaim (termasuk rekonpensi)
menjadi lebih realistis. Faktor lain adalah berkaitan dengan jumlah
arbiter, biaya perjalanan, dampak dari bantuan hukum dan pengacara
yang mewakili dalam persidangan dan saksi-saksi. Beberapa lembaga
arbitrase memberikan aturan arbitrase yang sederhana dengan biaya yang
rendah, khususnya untuk sengekata dengan klaim yang kecil. Prosedur
ini termasuk penggunaan satu arbiter, persidangan yang tidak lama dan
hanya meliputi pemeriksaan dokumen. Hybrid arbitration yang meliputi
negosiasi/rekonsiliasi dapat mempercepat penyelesaian sengketa, sehingga
dapat menurunkan biaya berperkara.

12 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 13
 Managing Cost In Arbitration Managing Cost In Arbitration

General by the District Court. It is common knowledge that some of red tapes practices
manifested in form of the so called “in-official cost” still exist in the Indonesian
It is quite natural that business actors always seek the most effective dispute
court system. There is indeed no valid information on how much the standard of
settlement media as the choice of forum. One of the elements to indicate an effi-
this excessive or unofficial cost at the court could be but it would make dispute
cient dispute settlement mechanism is the low cost factor. Low cost dispute set-
settlement through court litigation becomes inefficient and very costly.
tlement mechanism will be more favorable to settle business dispute since busi-
ness actors consider cost effectiveness and certainty in the result of such dispute The efficiency and the effectiveness of dispute settlement through arbitration
settlement are very important. in the first place depend on the agreement of the parties concerned as provided
in the arbitration agreement they entered into and subsequently whenever they
In general there are two types of dispute settlement mechanism; one is litiga-
start the arbitration. In the arbitration agreement the contracting parties nor-
tion in court and two, dispute settlement through arbitration which is actually
mally make reference to the conditions and the arbitration procedure to be
one mode of alternative dispute resolution. It is necessary for the business peo-
applied whenever difference of opinion or dispute arise including with regard
ple, in particular in Indonesia, to know the cost which has to disburse in order to
to the venue of the proceeding. In the case of ad hoc arbitration the setting up
settle dispute whether through court or arbitration.
and the administering of the arbitration mechanism need to be arranged by the
For business people dispute settlement through arbitration is more attractive parties concerned. In institutional arbitration the institution sets up the arbitra-
compared to court litigation.. Before coming to the discussion on the issue on tion proceeding and the administering of the case according to the established
cost in arbitration, as to how to manage cost in such proceeding, in particular standard Rules of Procedure and Rules of Cost/Tariff of Arbitration. So since the
in Indonesia, since arbitration is still not widely popular especially in the local arbitration institution provides published Rules of Cost/Tariff of Arbitration, it
business community, some brief discussion on cost involved in court litigation is up to the parties concerned as to how they should or would deal with the cost
compared to cost in arbitration would seem to be necessary. of arbitration.

Court Litigation versus Arbitration Beside the various advantages which are addressed to arbitration, such as
confidentiality of proceeding, simplified procedure, professional criteria in the
Theoretically, the Indonesian court has a principle to handle every case by sim- appointment of arbitrator(s) and the final and binding effect of the award, com-
ple, swift and inexpensive manner. However, sometimes this principle is hard to pared to court cost, cost of arbitration is relatively a “manageable cost”, mean-
be applied as the case might be complicated and the trial itself might last very ing that the disputing parties concerned in principle are able to control or to
long. Moreover, the amount of court cost in proceeding may vary as each District measure it. (It is to be noted however, that cost in arbitration is not always cheap
Court (the court of first instance) has the authority to set up the court fee for compared to cost of litigation in court. There have been studies, in particular
every cases adjudicated by the court. Consequently, there is no uniform court in the United States where it was found that cost in arbitration could be much
fee in Indonesia. higher than cost in court litigation, in particular with respect to claims on insur-
Officially the court in Indonesia offers a low cost of proceeding despite the dis- ance pertaining to consumer goods. There were also cases of arbitration which
advantage of time consuming and many limitation of inflexibility. However, in involved a considerable time and cost because of the rules of procedure used
fact the cost could be much higher because in practice the case could go further which allow under certain condition a review to the award (ref. ICSID Rules of
to pass an appeal at the High Court and cassation (or even thereafter judicial Procedure) and or because of the uncooperative attitude of the parties (or either
review) at the Supreme Court to obtain a final and binding decision. one of the parties) or because of certain conduct of the arbitrator).
Besides there is also something that needs to be considered that the cost of
the court proceeding could be very much excessive to the formal cost as set up

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 Managing Cost In Arbitration Managing Cost In Arbitration

Managing Cost in Arbitration arbitrator/arbitration institution as the basis to determine the cost of arbitration
which then could be quite high that even sometimes to the surprise of the claim-
The cost of arbitration that is to be charged to the parties normally cover reg-
ant/parties concerned. The arbitration cost will further increase if the respond-
istration fee (usually it is a fixed sum) and arbitration cost/fee which include the
ent party submits a counter claim (claim in contravention) using about the same
fee/cost for administering and facilitating the case and the arbitrator’s fee. Please
approach by submitting an inflated counter claim amount. As discussed above
note in this regard that arbitration institutions may have different rules on cost/
normally additional arbitration fee/cost will be charged to the amount of the
tariff. Normally arbitrator(s) or arbitration institution determine or fix the arbi-
counter claim.
tration cost/fee as a certain percentage of the claim amount submitted to arbitra-
tion. Therefore if the claimant submits a large sum of claim amount (which may From the above discussion it is quite clear that in the first place the disput-
include various specified or unspecified claim items) it will cause that he has to ing parties themselves are to manage the cost in arbitration by rationalizing the
pay a relatively big amount of cost of arbitration which would also cause that the claim amount (including the contra claim amount) to the most realistic figures.
respondent has to pay a big amount of money because normally (at least at the In addition other factor that may contribute to of the cost in arbitration are such
first instance) the arbitration fee is to be equally shared. On the other hand if the as whether the arbitration would involve one arbitrator (single arbitrator) or a
claimant submits a small or realistic amount of claim then the arbitration cost/ panel of arbitrators, especially in ad hoc arbitration), whether the venue of the
fee will be fixed accordingly. It is quite often in practice that claimant includes arbitration would involve a lot cost of travel etc., the cost impact of legal assist-
many various specified or unspecified claim items in the total claim amount sub- ance and the lawyer representation in the proceedings and the presenting of wit-
mitted as compensation for the alleged act of default (breach of contract). nesses (either factual or expert witness) need to be carefully considered.
For instance it also includes, interest and compound interest to be charged Certain arbitration institutions provide simplified rules of arbitration with
Compensation claim for loss of profit is also quite often be included which is low cost of arbitration which is especially intended to be addressed to dispute
difficult to assess, the more so if it is not supported by strong arguments and/or with small claims. The simplified procedure may include the appointment of
evidences. It is also quite often that the so called claim for “immaterial losses” is single arbitrator, with short or without proceedings, examination by documents
included on the argument that claimant has suffered such a mental stress or loss only etc. Combined process of dispute settlement, between negotiation, media-
of reputation etc. because of the allegedly committed default by the respondent. tion/conciliation and arbitration may accelerate or speed up the entire dispute
It is quite often that a big amount is submitted for such claim. Of course it is very resolution that may be reached between parties which could perhaps result in
difficult for the arbitrator (tribunal) to make judgment on such claim; it is dif- the reduction of cost of the arbitration provided that the arbitration institution
ficult to assess and entertain such alleged condition and its cost. In practice such under its rules provides eventual reduction of cost in such situation.
claim is mostly rejected by the judge in court or by arbitrator(s) or at least very
rarely considered and accepted. Conclusion
A claim item for the compensation of legal cost incurred which is included in Finally, to conclude, the issue on managing cost in arbitration, as discussed
the total claim amount in court litigation, to the best of my knowledge, has never above is, in the first place in the hands of the parties concerned in the arbitra-
been accepted by the court in Indonesia on the reason that under the law there is tion process. They would be able to manage/control the cost in arbitration, by
no obligation for plaintiff/claimant to be represented by or to involve lawyer(s) agreeing on more simpler procedure of arbitration if possible, by not inflating
in court proceeding. Even though arbitrator (tribunal) is free in its decision they the submitted claim and to fully and actively cooperate in the process of the
mostly follow the court practice. arbitration process. The arbitrator or the arbitration institution could facilitate
the interest of disputing parties by providing simplified procedure and reason-
All those elements of the total claim as discussed above will of course increase able level and practical system of cost/ tariff of arbitration. In short, as discussed
or inflate the claim amount submitted to arbitration which is then used by the above, managing cost in arbitration is a matter that needs to be seriously dealt
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 Managing Cost In Arbitration
 Fred B.G. Tumbuan
with by the parties concerned and the institution involved in administering and
facilitating the arbitration.
Certain Indonesian Contract
Lastly, it is to be noted, that this short presentation paper does not discuss, cost Law Principles That Are Relevant
that may be incurred in relation to the enforcement of arbitration award. in International Arbitration
This paper is presented at the Arbitration Seminar on Law and Practice of
International Arbitration: A Comparative Look between Indonesia and Singa-
Abstrak
pore held and organized by the Singapore International Arbitration Centre and
Ikatan Advokat Indonesia, 8 May 2008. Makalah berikut disiapkan berdasarkan pengalaman Penulis sebagai
saksi ahli dalam persidangan arbitrase internasional di Singapura dan
Jakarta. Dalam makalah dibahas beberapa asas dalam hukum perjanjian
M. Husseyn Umar Indonesia yang relevan dengan arbitrase internasional, khususnya beberapa
Experienced mediator and arbitrator, and also
a Vice Chairman of BANI Arbitration Center, Jakarta, and aspek dari hukum Indonesia dalam perjanjian-perjanjian komersial
a Partner at ALI BUDIARDJO, NUGROHO, REKSODIPUTRO, Jakarta yang tunduk pada hukum Indonesia. Asas-asas ini antara lain doktrin
Stare Decisis, itikad baik, rebus sic stantibus, penafsiran kontrak dan force
majeure.
Stare Decisis adalah suatu doktrin di mana dalam perkara yang sama
hakim wajib memberi putusan yang sama yang pernah dibuat oleh
hakim yang terdahulu. Dalam sistem common law yang tidak dikodifikasi
doktrin ini memberikan kesinambungan, kohesi dan dapat diperkirakan
(predictability). Berbeda dengan sistem common law, doktrin ini tidak
dikenal dalam sistem civil law, termasuk Indonesia. Sebaliknya, asas itikad
baik merupakan suatu asas yang penting dalam sistem civil law, sementara
dalam sistem common law, tidak ada kewajiban untuk melaksanakan
perjanjian dengan itikad baik meskipun secara umum konsep tersebut
memegang peran penting.. Dalam hukum perjanjian Indonesia asas
itikad baik ini diatur dalam Pasal 1338 dan 1339 KUHPerdata, yang
masing-masing menyatakan bahwa suatu perjanjian harus dilaksanakan
dengan itikad baik dan suatu perjanjian itu tidak hanya mengikat untuk
hal-hal yang dengan tegas dinyatakan di dalamnya, tetapi juga untuk
segala sesuatu yang menurut sifat perjanjian diharuskan oleh kepatutan,
kebiasaan atau undang-undang. Asas ini juga merupakan dasar doktrin
rebus sic stantibus, yaitu doktrin yang menyatakan bahwa sesuatunya tetap
berlaku selama keadaan tidak berubah, asas itikad baik ini berlaku dalam
pelaksanaan maupun pembuatan kontrak.

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 Certain Indonesian Contract Law Principles That Are Relevant Certain Indonesian Contract Law Principles That Are Relevant
in International Arbitration in International Arbitration
Selanjutnya, dalam sistem civil law seperti yang dianut oleh ten records of decisions in the fourteenth century and gradually replaced trial by
Indonesia, penafsiran kontrak berbeda dengan sistem common law, yang battle or equally speculative forms of solution by Divine intervention. 
menggunakan pendekatan objektif dengan tidak melihat maksud dari para
A case decided in one of the higher courts which state a principle of law is
pihak tetapi mencari makna dari kata-kata yang terttulis dalam kontrak.
called a precedent. In the nineteenth century the English judges developed the
Pendekatan yang dikenal dengan “parole evidence rule” tidak termasuk
doctrine of obligatory precedent or stare decisis. This essentially requires that
bukti-bukti lisan yang bertentangan dengan yang tertulis dalam kontrak.
precedents must be followed by judges in similar cases in the same court and
Dalam sistem civil law yang menggunakan pendekatan subjektif dalam
in the courts below it, whether the judges agree with such precedents or think
pembentukan dan penafsiran kontrak, para pihak dapat mengajukan bukti-
them just and however old they may be. This doctrine of precedent gives conti-
bukti dalam negosiasi dan dokumen-dokumen yang dapat menjelaskan
nuity, cohesion and predictability in the common law system being a legal sys-
maksud sesungguhnya dari para pihak.
tem without a Code. Said doctrine of stare decisis is not known to the civil law
since the civil law judge is bound by a Code laid down many years earlier. In
Indonesia the principles and provisions governing contract law are laid down
Introduction
in Book III of the Indonesian Civil Code (“ICC”), which is a replica of the 1838
As this seminar is jointly organized by SIAC and IKADIN, I therefore believe Dutch Civil Code, promulgated in Indonesia in 1848 and which is still operative
that it may be of interest to the participants that I review in this paper certain pursuant to Article II of the Transitional Provisions of the 1945 Constitution
Indonesian contract law principles which are relevant in international arbitra- which has partly become Article I of the Transitional Provisions by virtue of the
tion. For it has been my experience as an expert witness in international arbi- Fourth Amendment to the Constitution. It is, therefore, not surprising that Dutch
tration held in Indonesia and in Singapore, where I had to comment on certain case law and writings of Dutch legal scholars dealing with and commenting on
aspects of Indonesian contract law concerning commercial agreements gov- specific legal issues found in the 1838 Dutch Civil Code are still consulted and
erned by Indonesian law which are the subject of an international arbitration, referred to by Indonesian legal practitioners.
that both the arbitrators as well as the parties’ solicitors coming from a common
In this connection I wish to make the observation as a caveat that the New
law background appeared not all too familiar with Indonesian contract law prin-
Dutch Civil Code (“NDCC”) which came into force in Holland in 1992 is not part
ciples. This is not surprising as Indonesian contract law belongs to the civil law
of Indonesian law. Any references to the NDCC in any proceedings, arbitral or
(named after the “civilians” or citizens of Rome) system.
otherwise, regarding contracts which are governed by Indonesian law are there-
In view then of the above I therefore intend to consider in this brief paper fore to be made with the above in mind. This is so as the NDCC is not merely a
some specific Indonesian contract law principles which essentially are civil law restatement (as some may think) of Dutch law based on Dutch case law which
concepts. As obviously this seminar is not the forum to deal with most, let alone originates from the period when Dutch law was a guidance for understanding
all, the Indonesian contract law principles which may be relevant in an interna- and interpreting Indonesian law. In New Netherlands Civil Code, Patrimonial
tional arbitration, I shall, therefore, limit myself to examining in this paper those Law page XX at paragraph 20, Professor A.S. Hartkamp, when referring to the
principles which I deem important and hopefully useful to the participants. mandate which was given to Professor Meijers in 1947 to draft a new Civil Code,
states that:
1. The Doctrine of Stare Decisis
Different from the civil law which is a codified law, the common law is case law
or judge-made law. It consists of decisions given by English judges in numerous 
Michael H. Whincup, Contract Law and Practice, the English System and Continental
individual disputes. As a recognizable body of law it dates back to the first writ- Comparisons, fourth edition, Kluwer Law International 2001, p.1.

Id. p.2.

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 Certain Indonesian Contract Law Principles That Are Relevant Certain Indonesian Contract Law Principles That Are Relevant
in International Arbitration in International Arbitration
“ …. the work must not be misunderstood as a mere restatement of the 2. The Principle of Good Faith
law with the aim to remove superfluous and obsolete provisions, and to
In common law, different from the civil law as we will see later, there is no stat-
codify judge-made law and special statutes. The previous sections have
utory duty to act in good faith. Albeit the concept of good faith plays an impor-
shown that Meijers decidedly did not approach his task in such a limited
tant role in many contexts in the common law, there is not a duty to act in good
way. By means of some examples it will be shown that the law itself has
faith that is as general and extensive as the duty to act in good faith found in
undergone many important and interesting innovations”. 
the civil law. This is particularly the case with respect to contract law. The civil
Professor Hartkamp goes on to state at paragraph 33 page XXVI that: “… in law as will be discussed later explicitly allows an agreement to be interpreted
regard to the important innovations, some of which were mentioned before, for- so as to take account of the requirements of equity and good faith, whereas the
eign influences are much more balanced. …… influence from the common law common law places emphasis on the fact that an agreement is an agreement. A
may be seen, e.g. in the articles on error, undue influence, anticipatory breach of common law trained lawyer acting as an arbitrator should therefore not apply
contract, and liability for independent contractors; German influence is visible common law concepts when looking at Indonesian contract law concepts of e.g.
in the new section on general conditions and in the rules on the role of good good faith, contract interpretation, force majeure etc.
faith (reasonableness and equity) in contract law.”
In Indonesian contract law good faith or bona fides is expressly stipulated in
In a similar vein, Zweigert and Kötz in An Introduction to Comparative article 1338 section (3) ICC that “Agreements must be performed in good faith”.
Law when analyzing to which family of Codes the NDCC belongs, state at page What did the legislator mean by the legal term good faith? The answer to this
103: “… one cannot allocate it either to the German or the Roman legal family. question is set forth in article 1339 ICC which stipulates as follows:
Founded on intensive comparative law, it is akin on many points to the common
“Agreements are binding not only to what is therein expressed, but also
law (as on avoidance of contracts for error or ‘improper exploitation of circum-
as to that which is required, according to the nature of the agreements, by
stances’), and on others follows the Vienna Convention on International Sales (as
equity, usage or statute”.
on liability for breach of contract). One can only conclude that it has hit upon a
style of its own, founded on the European ius commune”. It should be obvious that the legal term equity as used here should be taken
in the sense of “what is just and equitable” or expressed in a more common way
Based on the comments of the scholars referred to above it can be said that the
“what is reasonable and equitable (redelijkheid and billijkheid)”. Although the
NDCC brought many innovations into Dutch law, some borrowed from other
terms “reasonable” and “equitable” have each their own emotional value, how-
legal traditions including the common law, and as a result the law under the
ever, in a legal sense there is no significant difference between them. 
NDCC is quite different in many respects from the law under the 1838 Dutch
Civil Code. Such being the case it would, therefore, not be right to export the It should be kept in mind that the term good faith mentioned in article 1338
NDCC to Indonesia as reference and consider it as if it were still the same as section (3) ICC refers to objective good faith. The parties to an agreement will
Indonesian law. This, however, is not to mean that we cannot learn from the be said to have complied with their duty to observe good faith in their perform-
Dutch experience regarding e.g. the evolutionary change in the meaning of the ance of the agreement if their actions can truly be said to be reasonable and
preeminence of good faith in the performance of an agreement as will be men- equitable. Thus compliance with the obligation in performing an agreement is
tioned later in this paper. not dependent on the internal disposition of the party concerned (also referred
to as subjective good faith). If a party, therefore, acts in an unreasonable and

P.P.C. Haanappel and Ejan Mackaay, New Netherlands Civil Code, Patrimonial Law, Reprinted
1997, Kluwer Law and Taxation Publishers, Deventer. Boston, Netherlands. 
Asser-Hartkamp, Verbintenissenrecht II, Deel II Algemene Leer Der Overeenkomsten, 10 e

K. Zweigert & H. Kötz, An Introduction to Comparative Law, Third Edition, Clarendon Press, Druk, bewerkt door Mr. A.S. Hartkamp, W.E.J. Tjeenk Willink-Deventer, 1997, p. 287.
Oxford 1998, p.103. 
Ibid.
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 Certain Indonesian Contract Law Principles That Are Relevant Certain Indonesian Contract Law Principles That Are Relevant
in International Arbitration in International Arbitration
inequitable way it will be of no good defense for him to advance that he honestly 258. It has done so in favour of good faith which is thus established as the over-
believed his conduct to be reasonable and equitable. riding principle.
The question at hand now is to examine whether article 1338 (3) ICC, besides As to the question what constitute unforeseen changes of facts, conditions
having a supplemental function as is expressly provided in the above referred and circumstances so that good faith either suspends or extinguishes a credi-
article 1339 ICC, does also have a derogating function. Can good faith dero- tor’s right to demand performance that will have to be judged on a case to case
gate from the obligations of the debtor and thus restrict the rights of the credi- basis. There is obviously no strict test for what constitute an unforeseen material
tor? In a well-known decision commonly referred to as the “Sarong arrest” the change. However, the following tests could perhaps be applied:
Dutch Supreme Court (HR 8 January 1926, NJ 1926, 203.) took the view that
• Would it be reasonable or equitable to insist on the performance of the
good faith could only supplement contractual rights and obligations and could,
contract in accordance with its terms in the context of the change which
therefore, not derogate from those rights and obligations. This view was severely
has occurred?
critised by prominent jurists such as Meijers, Scholten and Van Oven. Although
it was only in 1967 that the Dutch Supreme Court appears to have abandoned • Would such performance result in a significant imbalance in terms of the
the abovementioned view by expressly acknowledging that good faith, besides benefit to be derived from the contract by each party?
having a supplemental function, can also have a derogating effect, however, • If the parties had foreseen the events which have occurred, would they
even before that year judicial opinion has in a number of cases departed from have entered into the contract on those terms and given their consent to
the abovementioned strict grammatical interpretation of article 1338 and 1339 it?
Indonesian Civil Code as reflected in the above referred Sarong arrest. 
A careful reading of the abovementioned tests will show that they are an appli-
The abovementioned long debated and critized view of the Dutch Supreme cation of (i) the principle of good faith in the performance and enforcement of
Court in respect of the controversy over the preeminence of good faith or legal contracts and (ii) the notion that consent is given only to contracts of benefit
certainty, has now been resolved in the Dutch New Civil Code Book VI, Article to the consenting party and that the consent is qualified by the expectation and
requirement that the other party will act in good faith. It is in this connection
that I should like to mention the clause rebus sic stantibus (as long as things
stand as they are) which since the time of the middle ages purported to protect

Article 258 (6.5.3.11):
1. The judge may at the request of one of the parties modify the consequences of a contract
or entirely or partially cancel the same on the ground of unforeseen circumstances, which
are of such a nature that the counter-party based on standards of reasonableness and
equity may not expect the unchanged preservation of the contract. The modification or
cancellation can be pronounced with retroactive effect. (In Dutch: 1. De rechter kan op
verlangen van een der partijen de gevolgen van een overeenkomst wijzigen of deze geheel
of gedeeltlijk ontbinden op grond van onvoorziene omstandigheden welke van dien
aard zijn dat de wederpartij naar maatstaven van redelijkheid en billijkheid ongewijzigde
instandhouding van de overeenkomst niet mag verwachten. Aan de wijziging of
ontbinding kan terugwerkende kracht worden verleend).
2. No modification or cancellation shall be granted if the circumstances based on the nature
of the contract or the common prevailing opinions are at the risk of the party invoking
them. (In Dutch: 2. Een wijziging of ontbinding wordt niet uitgesproken, voor zover de
omstandigheden krachtens de aard van de overeenkomst of de in het verkeer geldende
J.M. van Dunné, Verbintenissenrecht, Deel 2, 2e, herziene druk, Kluwer-Deventer, 1993, p. 83.

opvattingen voor rekening komen van degene die zich erop beroept).
Asser - Hartkamp, op. cit., p. 300


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 Certain Indonesian Contract Law Principles That Are Relevant Certain Indonesian Contract Law Principles That Are Relevant
in International Arbitration in International Arbitration
a contracting party against the consequences arising from circumstances occur- intended and to what they can be considered as having given their consent. Good
ring after the conclusion of the contract concerned. faith implies that the contract should have fair clauses and have benefit for both
parties. In this connection it is worth mentioning that the Usury Act (Woeker-
This was done by means of a tacit extinguishing condition known as the clau-
ordonnantie) of 1938 expressly provides that in the case of an offense to reason
sula rebus sic stantibus. Thus the contract is deemed to be made subject to the
and equity arising from an imbalance of benefit at the inception of the contract,
condition that the circumstances in which it was concluded remain unchanged.
the court may determine that the benefitted party may not obtain a judicial find-
10
An important principle that emanates from the rebus sic stantibus rule is that
ing of contract breach for the other party’s failure to perform. In such a case, an
the party’s consent (which pursuant to article 1320 section (1) ICC is a require-
Indonesian court may intervene either at the request of the disadvantaged party
ment for a valid contract) is qualified by reference to the continued existence of
or ex officio both to any prayers for specific performance as well as a finding
a set of contemplated circumstances because, for example, he would never have
of breach against the disadvantaged party and to reform judicially the contract
entered into the contract if he believed or had foreseen that it would become
terms to impose a balance of rights and obligations not offensive to reason and
totally one-sided. In such a case the derogating effect of good faith obliges the
equity or even to declare the contract void.13
other party to refrain from enforcing its strict contractual rights as it would be
unconscionable to do so. It can therefore be said that bona fides or good faith is 3. Interpretation of Contract
in truth the basis of the doctrine of rebus sic stantibus.11
The civil law, to which legal system Indonesian contract law belongs, adopts
A good example that the requirement of good faith varies from case to case an approach towards the interpretation of contract that is essentially different
can be seen from Indonesian jurisprudence. In the case where someone bought a form the common law. The common law takes a more objective approach to the
plot of land before World War II at a certain price, the payment of which became interpretation of contract by not looking at the actual intention of the parties but
due after the war, namely after obviously the market value had increased many instead to seeking the meaning of the words used in writing in the contract. This
times, the Supreme Court did not amend the contract price but instead imposed common law approach known as the “parole evidence rule”14 excludes oral evi-
an obligation to re-sell the plot of land at a reasonable price to a third party and dence that seems to contradict the written contract. It is, therefore, quite com-
share the profit of such sale.12 Different from the above case, the Supreme Court mon that common law lawyers include a clause in agreements they have drafted
in its decision rendered in 1955 refused to permit land which had been pledged
(jual gadai) for a price prior to World War II to be redeemed for the same price 13
Usury Act (Woekerordonnantie) of 1938, Article 2(1): “Whenever between the reciprocal
and instead applied its own “gold formula” for redemption. The Court decided obligations of the parties to a contract from the outset there is such a difference in value
so that, in view of the circumstances, the disproportion of such obligations is excessive,
that since the price of gold had increased many times during the intervening the judge may then at the request of the disadvantaged party or even ex officio mitigate
years, equity (keadilan) required that the fluctuation of the currency be borne the obligations of such party or declare the contract void, unless it is reasonable that the
equally by the parties. disadvantaged party had fully foreseen the consequences of the concluded contract and
such party had not acted with frivolity, inexperience or in distress”. (In Dutch: Indien tusschen
So far we have discussed the derogating effect of good faith in the perform- de wederzijdsche verplichtingen der partijen bij eene overeenkomst van den aanvang af
een zoodanig verschil in waarde heeft bestaan, dat, in verband met de omstandigheden,
ance of the contract. Does good faith also play an important role during the de onevenredigheid van die verplichtingen buitensporig is, kan de rechter, op verzoek der
stage of formation of the contract? The answer is affirmative. In terms of the benadeelde partij of ook ambtshalve de verplichting dier partij matigen of de overeenkomst
formation of the contract good faith affects what the parties are taken to have nietig verklaren, tenzij aannemelijk is, dat de benadeelde partij de gevolgen van de door haar
aangegane verbintenis ten volle heeft overzien en zij niet gehandeld heeft in lichtzinnigheid,
onervarenheid of noodtoestand).
10
Asser-Hartkamp, op. cit. p. 320. 14
Black’s Law Dictionary, Eighth Edition, defines the parole-evidence rule as follows: The
11
Ibid. p. 321. principle that a writing intended by the parties to be a final embodiment of their agreement
12
Mahkamah Agung Case 28 May 1953 No. 62aK/Sip/1952, dalam perkara “Jual - Beli Bersyarat”, cannot be modified by evidence that adds to, varies, or contradicts the writing. This rule usu.
published in H. 1953 - 2 and 3 as reported in part in J. Satrio, S.H., Hukum Perikatan, Perikatan operates to prevent a party from introducing extrinsic evidence of negotiations that occurred
Yang Lahir Dari Perjanjian, Buku II, Citra Aditya Bakti, 1995, p. 170-172. before or while the agreement was being reduced to its final written form.
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as follows: “this agreement is intended to be the final and complete expression “If the wording of an agreement is clear, one is not allowed to deviate
of the parties’ agreement and no additional term or amendment can be made or from it through interpretation”.
added other than in writing”.
For whether the wording of a specific clause is clear is in itself a matter of
It may be of interest to the participants that I mention here that prior to its interpretation16.
rescission in 1934 a similar provision to the “parole evidence rule” could be
As can be seen from article 1343 ICC there is an important connection between
found in article 1897 ICC which read as follows:
interpretation and equity. A correct interpretation of a contract should be the
“No evidence by witnesses shall be permitted concerning that which is result of an application of an interpretation in equity as required by article 1338
claimed against or beyond the content of the written instrument, and nei- section (3) ICC. When parties disagree on the content of a contract, the arbitra-
ther also about that which one might assert to have been said prior, at the tion tribunal should look for what is reasonable and equitable on the assump-
time of or after the execution of said instrument”15. tion that what parties had intended was a reasonable and equitable deal. Thus
one ends up with a reasonable and equitable interpretation of the contract.
Albeit Indonesian law in specific instances requires that an agreement be in
writing and embodied in a notary deed on pain of nullity, the role of such writing Specifically as regards an industrial contract, in trying to find the intent of
is quite different (see article 1870 ICC regarding conclusive evidence (volledig the parties the tribunal is allowed by article 1346 ICC17 to look at national and
bewijs) of notary party deeds (partij akten). local customs and usage. Consequently industry standards prevailing in a given
field may be introduced when the tribunal is looking for the true intent of the
The civil law takes a subjective approach to the formation and interpretation
parties.
of contracts. An agreement is what the parties to the agreement have actually
intended when they gave their consent. Consequently, in interpreting and deter- Should there be no common intent on a given issue, article 1339 ICC could
mining the meaning and content of an agreement Indonesian law, like other civil then be used to supplement the contract with the necessary equitable obliga-
law traditions, does not exclude oral evidence. Any of the parties can submit tions. This way a further interpretation is given to the contract, not based on
evidence of pre-contractual negotiations and documents and proffer evidence what the parties had intended but instead on what good faith pursuant to article
of post-contractual behavior and discussions that could explain the true intent 1338 section (3) ICC requires. The result would be a reasonable and equitable
of the parties. It is not surprising, therefore, that the ICC has article 1343 which interpretation of the contract.
provides:
4. Supervening Illegality
“If the wording of an agreement is open to several interpretations, one
shall ascertain the intent of the parties involved rather than be bound by Supervening illegality during the performance of a contract causing the con-
the literal meaning of the words”. tract to become unenforceable due to legal impossibility to perform is one of the
types of force majeure (vis major) that is recognized in Indonesian contract
Therefore when one needs to interpret a contract, one should focus on the law. Professor R. Subekti, former Chief Justice of the Supreme Court of Indone-
actual intent of the parties in priority to the written word. If there is a lacuna that sia, dealing with the issue of the defense of the debtor against whom a claim for
needs to be filled then such lacuna should filled by applying equity, usage and compensation or cancellation of the contract is made wrote the following18:
statute as expressly permitted by article 1339 ICC. In this connection it is truly
odd to read the provision in article 1342 which stipulates: 16
For a doctrinal discussion of article 1342 ICC (article 1378 Old Dutch Civil Code), see Asser-
Rutten II, Verbintenissenrecht, Deel II Algemene Leer Der Overeemkomsten, 6e druk, bewerkt
door Mr. L.E.H. Rutten, 1981, p. 222-224.
17
Article 1346 ICC: “Obligations which are ambiguous, shall be interpreted by what is usual
W.J. Zwalve, C.Æ. Uniken Venema’s Common Law & Civil Law, Inleiding tot het Anglo-
15 (customary) in the country or at the place where the agreement was made”.
Amerikaanse vermogensrecht, W.E.J.Tjeenk Willink-Deventer, 2000, p.573. 18
Prof. R. Subekti S.H., Law in Indonesia, Gunung Agung - Jakarta 1973, p. 67-68.
28 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 29
 Certain Indonesian Contract Law Principles That Are Relevant Certain Indonesian Contract Law Principles That Are Relevant
in International Arbitration in International Arbitration
“The debtor to whom is launched a claim for compensation or cancella- “A general and self-evident restriction to the right to claim performance
tion of the contract, can in his defense put forward reasons to avert the follows from Art. 3:40 BW (NDCC), where a juridical act (e.g. a contract)
claim.” is considered to be null and void if it is contrary to bona mores or order
public because of its content or its intention (Art. 3:40 BW).”
It is possible that he puts forward that the non-performance of the contract
is due to events which could not be expected before and for which he was not The example mentioned above (Art. 9:102 PECL.No. 4) would constitute such
responsible at all. Because of those events it was quite impossible for him to ful- an illicit contract. A claim for the specific performance of an obligation arising
fill his contractual obligations. In that case the debtor puts forward that there from such a contract may not be upheld. The same would hold true if it was not
was a force majeure. If his plea is accepted by the Judge, the debtor will not be the conclusion of the contract but rather the performance of the obligation that
condemned to compensation, nor will the contract be cancelled against his will. was prohibited by law or decree. An example thereof would be the imposition of
It is because he is not considered to be in default or to have neglected the inter- a trade embargo after the conclusion of the contract.20
ests of his creditor.
Accordingly in the case of supervening illegality a choice has to be made
As for the conception of force majeure, there has been a change in the course namely, whether to obey the law of the state or to ignore the law and instead
of time. According to modern vision it is not necessary that there must be a big obey the private obligations pursuant to the agreement which has been entered
calamity or a catastrophe or other acts of God, which has prevented the debtor into. Essentially, therefore, what we have here is a situation of a conflict of duties:
to carry out his duty, but it is enough that in certain circumstances it will be con- the duty to obey the law, the public interest, which should weigh heavier than
sidered to offend human feelings when the creditor claims the fulfillment of the the duty to perform the agreement which has been concluded. Consequently, to
contract. In such a case the Judge will accept the plea of the debtor that he was insist on performance of an agreement that has become unenforceable because
in force majeure. For instance, an importer, who could not deliver certain goods said performance has become illegal as it is prohibited by a lawfully enacted
to the buyer because unexpectedly the Minister of Trade has issued a regula- supervening law or regulation is therefore undoubtedly contrary to good faith
tion prohibiting the import of such goods, should be considered to be in force which must be observed in the performance of an agreement.
majeure”.
Like the common law which has accepted for more than a century that events
It may be of interest to the participants to know that the Dutch Supreme Court occurring after the contract has been made may make the contract imposible or
in its decision on the same subject of supervening illegality had this to say19: impractical to fulfill – because, for example, the law now forbids it or its subject-
matter has been destroyed, or a party is prevented by illness from performing
“If conversely a validly made agreement is with respect to its performance
the promised services21, Indonesian contract law as evidenced by the articles
affected by a new law in such a way that performance becomes by law
1244 and 1245 ICC recognizes the concept of force majeure which is an effect
a prohibited act, the consequence thereof is then not that the agreement
and result that arises from the occurrence of certain events which affect the per-
has become void. Rather the enactment of said law has the effect that the
formance of the contract. Supervening illegality as we have seen above is one of
agreement may not otherwise be performed except with due observance
those events which excuses the non-performing party from performance of the
of said law”.
contract. And if we acknowledge that the existence of a higher duty can make the
Dealing with the concept of illegality the editors of a comparative study of the performance of a lower obligation “impossible” as in the case of legal impos-
Principles of European Contract Law and Dutch Law as found in the NDCC had sibility caused by supervening illegality, then the concept of impossibility can
the following to say:
20
Danny Busch et al, The Principles of European Contract Law and Dutch Law, A Commentary,
2002 Ars Aequi Libri, Nijmegen & Kluwer Law International, The Hague/London/New York,
p.354.
Asser-Rutten II, op.cit. p. 203.
19 21
Michael H. Whincup. op. cit. p.303.
30 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 31
 Certain Indonesian Contract Law Principles That Are Relevant Certain Indonesian Contract Law Principles That Are Relevant
in International Arbitration in International Arbitration
be expanded even further to include impossibility in other cases wherein the the Claimant will ipso jure be released from his obligation to perform since the
performance would be contrary to a higher interest. An example would be if the contract in question has ceased to exist. Examples of this rule can be found in
fulfillment of the obligation will expose the non-performing party to an imme- article 1545 ICC where the subject-matter of a contract of exchange is lost with-
diate serious danger for life, freedom or health or reputation. There is then in out the fault of the owner and in article 1553 ICC if the leased property is dur-
those cases “moral impossibility”. Thus the concept of objective impossibility ing the duration of the lease totally destroyed by an accident. In both cases the
as is the case of supervening illegality is expanded to include the cases of subjec- respective contracts are deemed terminated by operation law.24 This appears also
tive impossibility22 . the position of the English courts that “if it should happen in the course of car-
rying out a contract that a fundamentally different situation arises for which the
Article 1244 ICC provides that two essential requirements must be fulfilled
parties made no provision – so much so that it would not be just in the new situ-
before the existence of impossibility of performance by force majeure will be
ation to hold them bound to its terms, then the contract is at an end” said Lord
accepted namely, (i) there must be an outside event or extraneous change of
Denning in The Eugenia, 1964.25
situation affecting the performance of the contract and (ii) said outside event
or extraneous change of situation must have occurred without the fault of the With the above brief review of supervening illegality I have come to the end of
non-performing party. In such case article 1245 ICC provides that the non-per- this sketchy presentation of some Indonesian contract law principles relevant to
forming party will be excused from performance of the contract because of force international arbitration. It is my sincere hope that my fellow Indonesian advo-
majeure and will therefore not be liable for any costs, damages and interests. It cates will be induced to delve deeper into the topics of this seminar and make
may be of interest to the participants to know that English courts too appear to the extra effort to go directly to the original source materials referred to by the
recognize a similar concept called “frustration”.23 An example is “commercial speakers.
frustration” which Black’s Law Dictionary, Eighth Edition at p.694, defines to
mean: “An excuse for a party’s nonperformance because of some unforeseeable
and uncontrollable circumstance”.
Fred B.G. Tumbuan
What should the arbitral tribunal do when faced with a situation where one of Senior Managing Partner of the Law Firm TUMBUAN PANE in Jakarta,
the parties (the Respondent) is by law forbidden or prevented from performing specializing in the corporate and business law,
its obligations under the agreement in question? I am of the view that since the and also a listed arbitrator in BANI.
agreement has become incapable of performance, it has thereby lost its mean-
ing and purpose for both parties (Claimant and Respondent alike) and therefore
such agreement ceases to have any substantial justifications for its continued
existence. It, therefore, is in my view reasonable, equitable and proper that the
arbitral tribunal makes a ruling that the agreement in question is formally ter-
minated, otherwise the Respondent would be prejudiced in there being no final-
ity and consequently be faced with legal uncertainty with regard to carrying on
with his business.
What is the position of the non-affected party (the Claimant) in the case where
non-performance by the Respondent is caused by force majeure? In such a case
22
Asser-Rutten I, Deel I Verbintenissenrecht, De Verbintenis in het Algemeen, 6e druk, bewerkt
door Mr. L.E.H. Rutten, W.E.J. Tjeenk Willink – Zwolle, 1981, p. 251. 24
Asser-Rutten II, op.cit. p.325.
23
Michael H. Whincup. op.cit. p.305-306. 25
Michael H. Whincup. op. cit. p. 305.
32 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 33
 Moot Court and Arbitration
 By Nurdjanah A.S
Moot Court and Arbitration The Aim of Moot Court
The important aim of the Moot Court is to train the legal knowledge of stu-
dents, for the practical aspects of a lawyer life to create links between theory and
Abstrak
practice. Primary the students will prepare and train for a proper and successful
Makalah ini membahas mengenai Moot Court, yaitu salah satu sarana they activity in court, such as speech without texts self confidence and debate
pengajaran dalam pendidikan ilmu hukum, di mana para peserta activities, but it focus in single issue and improve their ability in writing the
mengikuti suatu simulasi dalam persidangan di pengadilan. Sasaran process in Moot Court.
utama adalah melatih mahasiswa dengan pengetahuan yang menyangkut One of various Moot Courts is in commercial arbitration cases. In this activ-
aspek praktis yang menghubungan teori dan praktek. Moot Court ini ity the students can practice the arbitration procedure according to commercial
juga meliputi perkara-perkara yang diselesaikan dalam arbitrase. Dalam arbitration case. The parties in the commercial contract choose the arbitration
kegiatan ini mahasiswa dapat mempraktekkan prosedur dalam arbitrase. commercial court for the settlement of dispute among them. Today arbitration
Di Indonesia, Competition of Jessup Competition in Public International is one of the business community’s self regulatory practices of dispute settle-
Law pada bulan Februari 2008 telah menyelenggarakan National ment (Z. Asikin KA, 1978:7). Article 2 of the Protocol on Arbitration Clauses had
Competition di Jakarta, yang diikuti oleh 20 perguruan tinggi. been signed in Geneva 1923 said that the arbitral tribunal shall be governed by
the will of the parties and the law of the country in whose territory takes place
(Huala Adolf, 2002:29).
Moot Court
The students can practice arbitration in Moot Court of commercial arbitra-
Moot court is an extracurricular activity at many law schools in which partici- tion in law schools, and they have good experience and self confidence for the
pants take part in simulated court proceedings, usually to include drafting briefs future life, if they practice as arbitrators, lawyers, advocates, etc. Moot Court can
and participating in oral argument. “Moot court” usually refers to a simulated develop strong in writing and oral advocacy skills, intellectual flexibility, the
appellate court case or it is a simulated hearing or trial, in which the students ability to function well under pressure, and the self-confidence necessary to be
hear a case and negotiate it like in real life. The Moot court does not involve successful in practice. The students can participate in Moot Court competition
the examination of witness or the presentation of evidence; rather, it is focused such as William C. Vis International Commercial Arbitration Moot Court and
solely on the application of the law to a common set of evidentiary assumptions also Philip C. Jessup International Moot Court Competition (Jessup Competi-
to which the competitors must be introduced. In the United Kingdom and Com- tion) in Public International Law.
monwealth countries, the phrase “a moot court” may be shortened to simply “a
moot” and the activity may be called mooting (“to moot” means to bring some- The goal of the Vis Arbitral Moot is to foster the study of international com-
thing for discussions). mercial law and arbitration for resolution of international business disputes
through its application to a concrete problem of a client and to train law leaders
Moot Court plays real life roles of Prosecuting Attorney, lawyers Attorneys and of tomorrow in methods of alternative dispute resolution. The clinical tool to
something Judges, all proceeding on the case. The students will receive a case train law students will include the writing of memorandums for claimant and
as if they lawyers or advocates for one or both of the parties. Students will then respondent and the hearing of oral argument based upon the memorandums
write briefs, participate in oral arguments or both (ILSA, 2007) - both settled by arbitral experts in the issues considered.

34 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 35
Moot Court and Arbitration Book Review

The Moot Court in Indonesia

Review by AS Nurdjanah
In Indonesia the Competition of Jessup Competition in Public International
Law held National Competition (National Rounds) from 8 to 10 February 2008
in Jakarta. The event was the seventh competition, which was jointly held by the
“International Sales Law and Arbitration,
Indonesian Society for International Law (ISIL) and the Constitutional Court
and twenty teams from the state and private universities took part in the com- Problems, Cases and Commentary”
petition. They were competing to get the Awards of The Indonesian Constitu-
tional Court National Rounds, among others were Best Team Award, Mochtar by Joseph F. Morrissey & Jack M. Graves
Kusumaatmaja Award, for the First Runner-Up, Hassan Wirajuda Award for the
Second Runner-Up, and The Best Oralist was given the Ali Alatas Award. The
20 teams had struggled for a place in Semifinals and Final on Sunday (10/2) The book focuses specially on the United Nations Convention on Contracts
at 13.00 Western Indonesia Time in the Panel and Plenary Court Rooms of the for the International Sale of Goods (CISG). The book is unique in a sense that it
Constitutional Court. used an integrated approach at the interaction of substantive contract law and
The competition was also attended by 48 judges who were lecturers and legal dispute resolution. The book should interest the students, counsel and advocates
practicioners such as lawyers from Indonesia and other countries. The teams who are concerned with cross-border transactions. The combination of mate-
managed to get into the semis and the final which was held on Sunday (10/2) rials powerfully demonstrates both how a lawyer drafts an international sales
were the teams from University of Indonesia (UI), Parahyangan University contract and how the transactional and arbitral provisions interact if the deal
(Unpar), Padjadjaran University (Unpad), and Pelita Harapan University (UPH) does not go as anticipated. With respect to international commercial arbitration,
who then fought for the Best Team Award. analyzes a variety of materials including the UNCITRAL Model Law on Interna-
tional Commercial Arbitration (UNCITRAL Model Law) and the New York Con-
References vention, and various sets of arbitration rules. It is ideal for students preparing for
Indonesia Society of International Law, Indonesia National Round, Philip C.Jessup International the Willem C. Vis International Commercial Arbitration Moot, with focuses on
Law Moot Court Competition, 2008. both international sales and arbitration (Wolters Kluwer Law & Business: Cor-
Sudargo Gautama, 1995, Indonesian Business Law, PT. Citra Aditya Bakti, Jakarta. porate and Commercial Law – 2008).
Wolters Kluwer, Law & Business, Corporate and Comercial Law-2008, Includes 2005-2007.

Nurdjanah A.S.
Lecturer in International Law at the University of Tanjungpura, Pontianak (West
Kalimantan) and a listed arbitrator in BANI

36 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 37
 News News

Training On Arbitration And ADR ADR in Asia Conference

Friday, 12 September 2008, Four Seasons Hotel, Hong Kong
In Bandung
Bandung BANI Arbitration Office in cooperation with the Centre for Inter-
national Trade Law of the University of Padjadjaran held a two-day training on ARBITRATION AND MEDIATION
arbitration and Alternative Dispute Resolution. The training was commenced on GLOBAL PLATFORMS FOR DISPUTE RESOLUTION
18-19 February 2008 in Savoy Homann Hotel, Bandung.
The speakers included the dean, also a listed arbitrator of BANI, Hong Kong International Arbitration Centre in conjunction with Hong Kong
Prof. Dr. Ahmad M. Ramli, chair of the BANI Bandung Office, Huala Adolf, Corporate Counsel Association will be holding a one-day conference plans
listed arbitrators and vice chairs of BANI Bandung Office, H. Iing Rochaman devoted to effective arbitration and mediation in resolving dispute. One of the
and H. Jafar Sidik. The speakers from the academics were the senior lecturers topics to be discusses at the conference is the issue of Negotiation and Drafting
of the faculty of law of University of Padjadjaran, Mrs. Efa Laela Fakhriah and of International and Domestic Dispute Resolution provisions.
Mrs. Sinta Dewi. The topics presented at the training among others were the
Overview on the ADR; Law No 30 of 1999 on Arbitration and Alternative Dis- For detail please contact:
pute Resolution; Drafting Arbitration Clauses; the Arbitration Clause in the Con- Christopher To
struction and Sharia Banking Contracts; and the Recognition and Enforcement Secretary General
of Arbitration Awards. Hong Kong International Arbitration Centre,
38/F Two Exchange Square
In his opening address, the chair of the BANI Bandung Office stated the
8 Connaught Place Central, Hong Kong
essential role of arbitration in resolving the commercial disputes in Indonesia.
E-mail: [email protected]
This was true in the light of the role of arbitration could play in the provision of
better means of resolution of commercial disputes.
The participants
attending the training
included companies, prac-
ticing lawyers, lecturers
and students. The partici-
pants were as well given
a moot arbitration in the
end of the session to pro-
vide them a better under-
standing and appreciation
about arbitration and ADR
procedures.

38 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 39
Appendix A. List of BANI Arbitrators Appendix A. List of BANI Arbitrators

Indonesian Arbitrators 55. Henry Kapen Silalahi

56. Nurdjanah A. S.
64. Richard Wahjoedi
65. H. Iing Rochman K
57. Herujono Hadisuparto 66. H. Jafar Sidik
1. H. Priyatna Abdurrasyid 28. Ismet Baswedan 58. Yudi Haliman 67. Madjedi Hasan
2. M. Husseyn Umar 29. Maliki Tedja 59. Jimmy Sutjianto 68. Ichjar Musa
3. Harianto Sunidja 30. Hariwardono Soeharno 60. Omar Ishananto 69. Junaedy Ganie
4. H.R. Sidjabat 31. Fred B.G. Tumbuan 61. Wawan Setiawan 70. W. Suwito
5. Sudargo Gautama 32. Sutan Remy Sjahdeini 62. Rachmat Purwono 71. Purwanto
6. T. Mulya Lubis 33. Humphrey R. Djemat 63. Mustofa 72. Anita Dewi Anggraeni Kolopaking
7. Abdullah Makarim 34. Abdul Hakim Garuda Nusantara
8. Soegiri 35. Adhi Moersid
9. Anangga Wardhana Roosdiono 36. Frans H. Winarta International Arbitrators
10. H. Gusnando S. Anwar 37. H. Kahardiman
11. Januar Hakim 38. Suntana S. Djatnika 1. Albert Jan Van den Berg 18. Ms. Meef Moh
12. H. Agus G. Kartasasmita 39. Hasjim Djalal 2. Andrew John Rogers 19. Michael Charles Pryles
13. Jusuf Arbianto Tjondrolukito 40. Fransiska Oei 3. Arthur L. Marriot 20. Nick Stone
14. H. Bismar Siregar 41. I Made Widnyana 4. Custodio O. Parlade 21. Paul Whitley
15. Mohammad Salim 42. I Gusti Ngurah Oka 5. Cecil Abraham 22. Phai Cheng Goh
16. H. Ali Basya Loebis 43. I Wayan Tantra 6. Colin Y. C. Ong 23. Soonwoo Lee
17. Akmam Umar 44. M. Daud Silalahi 7. David A. R. Williams 24. Tan Chee Meng
18. Augusdin Aminoedin 45. Djuhaendah Hasan 8. Dato’ Jude P. Beny 25. Varghese George
19. H. Adi Andojo Soetjipto 46. Moh. Hasan Wargakusumah 9. Gregory Churchill 26. Vasudevan Rasiah
20. B.M. Kuntjoro Jakti 47. H. Ahmad M. Ramli 10. Ian G. Pyper 27. Woo Tchi Chu
21. Sunarindrati Tjahjono 48. Huala Adolf 11. Jan Paulsson 28. Lawrence Boo
22. Hj. Lieke Rukmini 49. Tengku Nathan Machmud 12. Jacques Covo 29. A. James Booker
23. Fatimah Achyar 50. Mariam Darus 13. Jean-Christophe Liebeskind 30. Michael Sinjorgo
24. H. Benjamin Mangkoedilaga 51. H. Fathurrahman Djamil 14. Ms. Karen Mills 31. Antonino Albert de Fina
25. Hary Djatmiko 52. Martin Basiang 15. Leslie Chew 32. Robert B. Morton
26. Hj. Hartini Mochtar Kasran 53. Etty R. Agoes 16. Ms. Louise Barrington 33. Justice K. Govindarajan
27. Rudhi Prasetya 54. N. Krisnawenda 17. Michael Hwang 34. Richard Tan

INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008 INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008
Appendix B. Scope of BANI Rules & Procedures

Article 1 of BANI Rules and Procedures

Arbitration Agreement
If the parties to a commercial agreement or transaction have agreed in writ-
ing that disputes in relation to that agreement or transaction shall be referred
to arbitration before the Indonesian National Board of Arbitration/BANI Arbi-
tration Center (“BANI”), or under the Rules of BANI, then such dispute shall
be settled under the administration of BANI in accordance with these Rules,
subject to such modifications as the parties may agree in writing, so long as such
modifications do not contradict mandatory provisions of law nor the policies
of BANI. Amicable resolution of dispute through arbitration at BANI shall be
based on goodwill of the parties based on cooperative and non-confrontational
procedures.

Article 2 of BANI Rules and Procedures

Prevailing Procedure
These Procedural Rules shall apply to arbitrations conducted by BANI. By des-
ignating BANI and/or choosing the BANI Procedural Rules for resolution of a
dispute, the parties to the agreement or dispute shall be deemed to have agreed
to waive the process of case examination through the District Court in connec-
tion with the agreement or dispute, and to execute any award made by the Arbi-
tration Tribunal based on the BANI Procedural Rules.

INDONESIA ARBITRATION - Quarterly Newsletter Vol III/2008