The Enforcement of International Arbitration Award in Indonesia

The development of international arbitration law has unquestionably benefited from the vast acceptance of the 1958 New York Convention (NYC 1958). This Convention extends its protection to the front end of the arbitral process through the recognition and enforcement of the parties’ agreement to settle their disputes by international arbitration. Indonesia is one of NYC 1958 member states. One of the provision regulated in NYC 1958 is the executorial power of International arbitration award in member states.

As the member states, Indonesia is supposed to comply with the provisions in NYC 1958. Besides, Indonesia also has enforced Supreme Court Regulation No. 1 Year 1990 on Procedures of Foreign Arbitral Awards and Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (Arbitration Act) as the implementation of NYC 1958 in Indonesia. Such regulations are expected to make the investors regard Indonesia as an interesting destination for investments, as it guarantees legal certainty protection which is by the acknowledgement of decision that has already acquired abroad can be implemented to a debtor whose assets are located in Indonesia.

After the ratification of the New York Convention, ideally there is no significant problem to execute foreign arbitral awards in the Republic of Indonesia, since Article III of the New York Convention provides that the execution of foreign arbitral awards from countries participating in the Convention should not be more difficult than the execution of the domestic arbitral award.

In fact, general impression in the international world to Indonesia is that we still an "arbitration unfriendly country", which is difficult to be able to implement the decision of the international arbitration. After the enforcement of Supreme Court Regulation No. 1 Year 1990 on Procedures of Foreign Arbitral Awards, until the promulgation of Arbitration Act a lot of international arbitration awards are still being rejected to be implemented in Indonesia if it is contrary to the public order in Indonesia.As is known, although public policy is formulated as a provision and the joints of the principal laws and national interests of a nation, in this case Indonesia, but the application of these criteria in concrete terms is not always clear, thus it seen as a legal uncertainty.

Then, To what extent International Arbitration can be executed in Indonesia?

CONCEPT OF FOREIGN ARBITRAL AWARDS

Foreign Arbitral Awards are Arbitral Awards that are decided in “International Arbitration”.The “International Arbitration” itself is held if the parties are coming from different nationalities or they are regulated under different law.But basically, foreign arbitration awards are from arbitration that held outside the jurisdiction of the executing-country in the arbitral awards. This foreign arbitral awards are one of the result of Party Autonomy principle since the parties are free to choose the seat of arbitration. Thus, for example if Indonesia party has an arbitration agreement with foreigner as another party, they can choose the seat of arbitration in Indonesia, in that another party’s country or even any other country that is felt favourable for both parties. In that case, it would be foreign arbitral awards for Indonesia party if the seat of arbitration chosen by the parties is outside Indonesia and the implementation or enforcement of that award is in Indonesia. Furthermore, if the implementation or enforcement of that awards is in Indonesia, whereas the parties are not coming from Indonesian nationalities and the seat of arbitration is not in Indonesia either, the arbitral award is considered as foreign arbitral award for Indonesia.

Furthermore, Indonesia determines in Article 1 point 9 Law 30/1999 on Arbitration that International arbitration award means an award handed down by an arbitration institution or individual arbitrator outside the jurisdiction of the Republic of Indonesia, or an award by an arbitration institution or individual arbitrator which, under the provisions of Indonesian law, is deemed to be an international arbitration award. Whereas Perma 1/1990 on Procedures for Foreign Arbitration Ruling regulates what is meant by the decision of Foreign Arbitral Awards in its Article 2, which is an award rendered by an Arbitration Institution or individuals arbitrator outside the jurisdiction of the Republic of Indonesia, or the decision of an Arbitration Institution or individuals arbitrator under the legal provisions of the Republic of Indonesia is considered as a decision of Foreign Arbitral Awards, which are final and binding in accordance with Presidential Decree No. 34 in 1981 the State Gazette No. 1981 40 dated August 5, 1981.

Foreign arbitral awards might be more beneficial for both parties since the point of view of the arbitrator would be broader rather than “domestic” arbitral awards since the case would be more various in international field.Moreover, for Indonesia, foreign arbitral awards are not new things anymore since Indonesia has already recognized it by ratification of several conventions which regulate the concept of foreign arbitral awards, such as:

1. Convention on Recognition and Enforcement of Foreign Arbitral Awards (New York Convention 1958)

The New York Convention 1958 is entered into force on 7 June 1959 as what mentioned in its article XII. Indonesia already ratifies New York Convention by President Decree Number 34 Year 1981. The main point of the ratification of this convention is that Indonesia party must recognize the legality and enforce the foreign arbitral awards without differentiate its legal force with Indonesia arbitral awards. Since Article I point 1 of New York Convention 1958 states “This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.”

However, The New York Convention 1958 was not established without any important reason. It has objectives which are recognizing the growing importance of international arbitration as a means of settling international commercial disputes;seeking to provide common legislative standards for the recognition of arbitration agreements; and court recognition and enforcement of foreign and non-domestic arbitral awards. The term "non-domestic" appears to embrace awards which, although made in the state of enforcement, are treated as "foreign" under its law because of some foreign element in the proceedings, e.g. another State's procedural laws are applied.

Furthermore, The Convention's principal aim is that foreign and non-domestic arbitral awards will not be discriminated against and it obliges Parties to ensure such awards are recognized and generally capable of enforcement in their jurisdiction in the same way as domestic awards. An ancillary aim of the Convention is to require courts of Parties to give full effect to arbitration agreements by requiring courts to deny the parties access to court in contravention of their agreement to refer the matter to an arbitral tribunal.

1. Convention on The Settlement of Investment Disputes Between States and Nationals of Other States (Washington Convention)

Washington Convention has been ratified  by Indonesia under Law 5/1968 on The Settlement of Investment Disputes Between States and Nationals of Other States. Although the focus of the convention is only in investment field, it also determines that the arbitral awards as the result of the arbitration must be enforced in each country of contracting states. That means there will be foreign arbitral award for one of the parties or even for both parties that must be implemented in their state although the awards is not issued from their own state as what regulated in section 6 of Washington Convention regarding Recognition and Enforcement of the Award.

THE EXTENT OF INTERNATIONAL ARBITRATION AWARD CAN BE ENFORCED IN INDONESIA

Enforcement of international arbitration awards is possible in Indonesia under certain conditions. An international arbitration award is defined by the Indonesian Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolutions (Arbitration Law) as a decision given by an arbitration body outside the territory of Indonesia or a decision of an arbitration body which is considered as an international arbitration award based on the laws and regulations of Indonesia.

Under Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolutions in, the enforcement of international arbitration awards is regulated in article 65 until article 69. Article 65 stated,“The District Court of Central Jakarta shall be the court vested with the authority to handle matters of the recognition and enforcement of international arbitration award.”

Moreover,article 66 can be concluded that the court will only recognize the international arbitration awards if it fulfills the following cumulative requirements:

1. The international arbitration award is given in a country which has a bilateral or multilateral treaty with Indonesia on the recognition and enforcement of international arbitration awards. (The most relevant multilateral treaty in this regard is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention.)
2. The international arbitration awards are limited to awards which under the provisions of Indonesian law, fall within the scope of commercial law;
3. The international arbitration awards may only be enforced in Indonesia if they do not violate public order;
4. The international arbitration award can only be enforced after obtaining an execution order of Exequatur from The Chief Judge of the District Court of Central Jakarta;
5. An International Arbitration award in which the Republic of Indonesia is one of the parties to the dispute, may only be enforced after obtaining an order of Exequatur from the Supreme Court of the Republic of Indonesia, which order is then delegated to the District Court of Central Jakarta for execution.

The International arbitration awards which relate to the Republic of Indonesia as a party to the dispute can only be executed after they have obtained an execution deed from the Supreme Court, which is then delegated to the Central Jakarta District Court. The judge needs to examine whether or not the foreign arbitral award has qualified those requirements, including in the scope of commercial law and not in contrary to the public order, even though there is no further explanation in regard with the scope or definition on what is meant by public order in this Law.Based on the Elucidation of the Act, scope of commercial law covers activities in the field of trading, banking, finance, investment, industrial and intellectual property rights. The Central Jakarta District Court’s decision, which permits the enforcement of the international award, is not subject to an appeal. However, if the decision is to reject the enforcement of the award, an appeal against the decision can be filed at the Supreme Court, which then has 90 days to decide.

On the one hand,Article III of New York Convention states “Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.”

Washington Convention rules out further about the enforceability of foreign arbitral award. Article 53 states:

(1) The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.

(2) For the purposes of this Section, “award” shall include any decision interpreting, revising or annulling such award pursuant to Articles 50, 51 or 52.

Article 54

(1) Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state.

(2) A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General. Each Contracting State shall notify the Secretary-General of the designation of the competent court or other authority for this purpose and of any subsequent change in such designation.

(3) Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought.

Article 55

Nothing in Article 54 shall be construed as derogating from the law in force in any Contracting State relating to immunity of that State or of any foreign State from execution.

CASE ANALYSIS

Supreme Court Decision Number 808 K/Pdt.Sus/2011

Parties of this case consist of PT. Direct Vision as a plaintiff and appellant, while Astro Nusantara International B.V, Astro Nusantara Holding B.V, Astro Multimedia Corporation N.V, Astro Multimedia N.V, Astro Overseas Limited, Astro All Asia Networks Pls, Measat Broadcast Network Systems SDN BHD and All Asia Multimedia Networks FZ-LLC which are all domiciled overseas become defendants and appellees. The plaintiff and defendants have entered into joint venture agreement; and within this agreement, these parties have agreed to settle dispute in SIAC (Singapore International Arbitration Centre) as the forum of dispute settlement.

Those parties settled the dispute in SIAC (Singapore International Arbitration Centre) on 2010. The defendants at that time were the SIAC Claimants who are against the plaintiff as one of the SIAC Respondent. SIAC Tribunal Award No. 06/2010, SIAC Tribunal Award No. 07/2010 and Memorandum of Correction Made Pursuant to Rule 28.1 of The SIAC Rules (SIAC Tribunal Award No. 14 of 2010), then, have been registered into Central Jakarta District Court and stated in International Arbitration Award Registration Deed No. 03/Pdt/Arb-Int/2010/PN.Jkt.Pst jo. 05/Pdt/Arb-Int/2009/PN.Jkt.Pst on 27 May 2010. At first, it is clearly enforceable for both binding parties. That Registration Deed is the object of dispute arisen by the appellant on the basis of violating the rules on Law No. 30 of 1999, so that the court needs to declare non-executable.

On the other hand, pursuant to the fact, besides arbitration dispute in SIAC on 2010, there has been another SIAC Arbitration Award on 2009 which has the same disputing parties. Prior the issuance of SIAC International Arbitration Award 2010, SIAC Arbitration Tribunal have issued Arbitration Award No. 062 on 2009 which is registered in Central Jakarta District Court on 2009. Thus, firstly it is enforceable for both parties. However, the court has decided to issue non-executorial confirmation to SIAC International Arbitration Award on 2009 since such award interferes Indonesia ongoing court proceeding pursuant to the rule of law or public order. Such non-executorial confirmation is reinforced by Supreme Court Decision No.01/KPdt.Sus/2010.The lawsuit is based on unlawful act conducted by the defendants. An ongoing civil proceeding in South Jakarta District Court No. 1100/Pdt.G/2008/PN.Jkt.Sel, thus, has not been final and binding yet on appellate proceedings in DKI Jakarta High Court. On the one hand, the plaintiff has filed lawsuit to Indonesia court first before such case is brought to SIAC by the defendants.

Therefore, the plaintiff files lawsuit to propose rejection and to ask not to issue executorial decision on SIAC Arbitration Award 2010 on the basis that between SIAC Arbitration Award 2009 and 2010 must be deemed to have integral and inseparable part. If such award will have executorial power, then it violates the public order as stated on stipulation of article 66 letter d of Indonesia Arbitration Act. Their rejection is also laid on New York Convention 1958 in which article V paragraph 1 stipulates that “recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, ….” Besides, the plaintiff adds their basis on article 68 paragraph (2) of Indonesia Arbitration Act. They also argued on Supreme Court Decision No. 02 K/Ex’r/Arb.Int/Pdt/2000, which becomes jurisprudence, that court is authorized to consider the application substance regarding whether or not contrary to the public interest, including the rule of law applies. It is in regard with the previous court confirmation of non-executorial on SIAC Award 2009. Substance of SIAC Award consists of an order to stop Indonesia legal proceeding, thus it violates sovereignty principle of Republic Indonesia. No foreign legal power can interfere ongoing legal proceeding in Indonesia. It, therefore, clearly violates the public order in Indonesia.

The plaintiff and defendants have entered into joint venture agreement; and within this agreement, these parties have agreed to settle dispute in SIAC as the forum of dispute settlement. Therefore, Supreme Court Justices, on their decision, reject entirely the appellant’s application. They have found that there is deviation of such agreement since the plaintiff files a lawsuit to defendants to court based on unlawful act while at the time of the proceedings, the defendants registered the case to SIAC forum. The Justices found that within the arbitration proceeding, plaintiff has enough opportunity to defend its legal interest. Moreover, the petition of refusal or annulment to SIAC Arbitration Award 2010 must not have been submitted because there has been no Execution Confirmation from Chief of Central Jakarta District Court. Thus, such request is deemed premature. Further, in order to annul the international arbitral award, the cancellation or annulment must be filed in the country where the award is made.

In conclusion, Central Jakarta District Court has issued non-executorial confirmation to SIAC International Arbitration Award 2009 due to violating Indonesia rule of law. The arbitration proceedings that was registered after lawsuit had been filed to Indonesia court deems to have violation to public order since SIAC orders to stop the ongoing Indonesia legal proceedings. Therefore, SIAC International Arbitration Award 2009 is not legally binding or unable to be enforced. However, Central Jakarta District Court has not issued any confirmation to the status of execution for SIAC International Arbitration Award 2010 at the time of the court decision issuance. It means that Central Jakarta District Court might get possible consideration whether or not to issue executorial confirmation on SIAC Arbitration Award 2010 because of this Supreme Court decision.Any parties cannot file refusal to the international arbitral award enforcement before the court issued the decision of enforcement status of such award. Thus, SIAC International Arbitration Award 2010 is still enforceable for parties in agreement.

Court Decision Number117/Pdt.G/ARB/2012/PN.Jkt.Pst

Parties in court decision No. 117/Pdt.G/ARB/2012/PN.JKT.PST are PT. Daya Mandiri Resources Indonesia (d/h PT. Risna Karya Wardhana Mandiri) as 1st Plaintiff, PT. Dayaindo Resources International Tbk as the 2nd plaintiff against SUEK AG the company which is built and registered based on Swiss Law and Regulation that located in Vadianstrasse 59, St. Gallen, CH 9000-Swiss as the Defendant. In 21th December 2009,they seal Contract For Sale & Purchase Of Steam Coal. But the contract is not established well, therefore SUEK AG applies the claimant for their loss because sending the vessel to Indonesia without being given any schedule from PT. Daya Mandiri Resources Indonesia (d/h PT. Risna Karya Wardhana Mandiri) to get the coal. There is also fact that SUEK AG also do not perform their obligation rightly since they do not fulfill the requirement of letter of credit and never give any notification to 1st plaintiff about the time when the defendant sent the vessel to carry the coal. Then, in 18 February 2010, the 2nd plaintiff as guarantor and the defendant make settlement agreement which was agreed that the plaintiff agreed to pay compensation by using installment payment method based on invoice which is sent by the defendant to 1st plaintiff but if he cannot fulfill it then the defendant has right to make any deduction in paying the compensation with amount of money which should be paid to get the coal. Then the 1st plaintiff and the defendant make new agreement which is called Contract For Sale & Purchase of Steam Coal 19th February 2010. In the term of 11th March 2010 until 14th May 2010, the 1st Plaintiff has sent the information to the defendant which shows that the 1st plaintiff cannot fulfill their performance and the reason why that situation happened. In 30th July 2010, the defendant sues the 1st Plaintiff to LCIA (as agreed in the agreement before) because the 1st Plaintiff was failed to conduct his obligation as what have been stated in the Settlement Agreement. According to their settlement agreement, This Agreement shall be governed by and construed in accordance with the laws of England and Wales. Any disputes whatsoever arising out of or in connection with this Agreement, including any question regarding its existence, scope, validity or termination (“Dispute”) shall be referred to and finally resolved by the London Court of International Arbitration (the “LCIA”), which Rules are deemed to be incorporated herein by reference into this Clause. There shall be one arbitrator and the appointing authority shall be the LCIA, such appointment to be made by the LCIA within four days of filing a Request for Arbitration with the LCIA. The seat of arbitration shall be London, England, and all hearings shall take place in London, England, and the arbitration shall be conducted in the English Language and the award shall be in English.

The 1st plaintiff considers that the claimant/sue was premature because they still do any communication therefore they thought it is not necessary to perceive that claimant. Then LCIA on 24th November 2010 in the arbitration award number 101655 decided that PT. Daya Mandiri Resources Indonesia (d/h PT. Risna Karya Wardhana Mandiri), PT. Dayaindo Resources International Tbk must pay US$.1,197,609.40 to SUEK AG as what has been stated in Settlement Agreement.They also must pay the interest US$.10,767.75 and LCIA arbitration cost Z.11,245.25. LCIA awards then registered in the clerk of Central Jakarta District Court on 25th January 2012,which is also attached with Penetapan Ketua Pengadilan Negeri Jakarta Pusat on 20th  January 2012 No. 128/2011 EKS which is clearly stated that the arbitration awards can be executed. Thus from this action we can know that the international arbitration award is legally binding and can be enforced in Indonesia.

Since the plaintiffs consider that the LCIA award is not fair because they decided the case only based on the information which is given by SUEK AG, then they also still do intense communication and consider themselves not doing any kind of breach contract.Hence, they ask for the annulment of the LCIA Awards to Central Jakarta District Court.Based on decision of Central Jakarta District Court, the judges agreed that they do not have any authority to do annulment of the LCIA awards. LCIA Award is international arbitration awards that have been stipulated in article 1 of Law No. 30 Year 1999. Both UK and Indonesia have ratified “The Convention on the Recognition and Enforcement of the Foreign Arbitral Award” which is then well known as New York Convention 1958 that is ratified by President Decree No. 34 Year 1981 on 5th August 1981. This convention clearly regulated that the annulment of arbitration decision only can be done by the district court of the state where the arbitration awards is granted. Arbitration awards of LCIA which has been granted in London, UK according to UK and Wales Law and regulation, the annulment can only be done by UK district court using UK Law and regulation. Thus,Central Jakarta District Court does not have any authority to do annulment of this arbitration awards.

According to Dr. Tin Zuraida, SH., MKn., the provision under article 70 until article 72 of Arbitration Law cannot be used as the legal standing to annul international arbitration awards which are granted in other state.The law used is the state where the arbitration is granted (lex loci arbitri), thus the contain of that arbitration award cannot be annulled by Law No. 30 Year 1999.Furthermore, the parties have been agreed in their agreement regarding arbitration clause thus it is in line with article 1338 of Indonesian Civil Code that the award of the arbitration also binds both parties.

From this decision and the consideration, and the existence of Penetapan Ketua Pengadilan Negeri Jakarta Pusat on 20th  January 2012 No. 128/2011 EKS which is clearly stated that the arbitration awards can be executed. We can know that the international arbitration award is legally binding and can be enforced in Indonesia. Then the enforcement of international arbitration award can be prosecuted toward District Court. The material subject of international arbitration award cannot be challenged by Indonesian District Court. The district court only can review if there is unfair procedure of arbitration but it should be completed with the evidence of it.

Supreme Court Decisions Number 212 K/Pdt.Sus-Arbt/2013

The Disputed Parties in this case are PT Global Mediacom Tbk. (MCOM) as the Applicant on the Annulment of Arbitral Awards; and KT Corporation (South Korea) as Respondent. The application is regarding the annulment of ICC International Court of Arbitration Award Number 16772 between the Claimant (KT Corporation) and Respondent (MCOM), where the Respondent (MCOM) failed to appear before the proceedings, has decided that the Respondent has broken the 2006 Option Agreement in failing to comply with the Notice of the Exercise of the Put Option dated 6 May 2009 and brings to their obligations to pay to the Claimant the sum of  US$ 13,850,966, the pre-Award interest, the post-Award interest, the legal and other costs, the costs of the arbitration including the Tribunal’s fee and expense and the ICC administrative expenses.

The main subject of the dispute is the execution of Put and Call Option Agreement dated 9 June 2006, which regulated that:

1. The Applicant (MCOM) has an obligation to buy shares in PT Mobile 8 owned by Respondent (KT Corporation) with the determined price in a case when Respondent issued notice to put exercise (an order to buy); and vice versa
2. In a case that Applicant issued a notice to call exercise (an order to sell), then Respondent has to sell the shares of PT Mobile 8 owned by them towards the Claimant with the determined price.

The chronology started when PT Mobile 8 had intended to conduct Initial Public Offering (IPO/Penawaran Umum Perdana) upon the shares owned by the company in stock exchange (bursa saham) which will affect the change of the status of the company to become Public Company and it was conducted on 29 November 2006. After the Initial Public Offering, the Respondent (KT Corporation) issued the notice to put exercise on 6 May 2009, which continued to the arbitration application in ICC as mentioned in the case Number 16772.

PT Global Mediacom Tbk. (MCOM) provided its arguments, as listed below:

1. The arbitration proceeding was conducted deceitfully (dengan tipu muslihat) by the absence of MCOM as the Respondent;

KT Corporation was hiding the documents of Bapepam Number III.E.1 and the Director Decision of PT Bursa Efek Jakarta Number: Kep-310/BEJ/09-2004 concerning Regulation Number II-D concerning Perdagangan Opsi Saham, which provide several requirements that were not fulfilled by KT Corporation, hence the Option Agreement is supposed to be null and void (batal demi hukum).

2. ICC Award Number 16772 is against with Public Order based on,
1. Article V paragraph 2 of New York Convention 1958,
2. Article 4 paragraph (2) of Supreme Court Regulation Number 1 Year 1990 concerning the Procedure of the Execution of International Arbitral Award,
3. Article 1320 paragraph (4) jo. Article 1337 of Indonesian Civil Code concerning legal cause as one element of an agreement validity,
4. MCOM also argued that KT Corporation has been interloping law to obtain unreasonable major benefits regarding the issuance of the notice to put exercise through the early conclusion of Option Agreement prior to the conduct of IPO upon the shares of PT Mobile 8 in the stock exchange based on several reasons:
1. The Option Agreement was made without any time limitation;
2. The Option Agreement did not fulfil the requirements of shares that can be traded in an option agreement, as it has been regulated through Documents of Director Decision of PT BEJ Number 310/2004;
3. The Option Agreement did not fulfil the requirements of shares that can be traded in an option agreement, as it has been regulated under Documents of Bapepam Number III.E,
3. There is an ongoing proceeding regarding the validity of the disputed object under ICC Award Number 16772 in a case Number 431/Pdt.G/2Q10/PN.Jkt.Pst applied by PT Bhakti Investama Tbk. as the Applicant against MCOM, KT Corporation, Qualcomm and PT KTF Indonesia (KTFI) as Respondent.

Presumably, the Applicant in this present case did not aware to the regulation concerning the annulment of Arbitral Award stated under Chapter VII of Law No. 30 Year 1999 concerning Arbitration and Alternative Dispute Resolution Award. Referring to the application of the Applicant, as in this present case is PT Global Mediacom Tbk. (MCOM), it is purposed for annulment of ICC Award Number 16772. The stipulation under Chapter VII of Law 30/1999 is only applicable to the National Arbitral Award.On the other hand, the Award decided in the jurisdiction of other State, hence the arbitration law of that State will be applicable and it is also correlated to the principle of lex loci arbitri. In case MCOM considered the award as invalid, they should apply their objection towards the court of where the ICC Award Number 16772 was taken. Furthermore, as another requirement in the application of arbitral award annulment, it has been regulated under Article V paragraph (1) of New York Convention 1958 regarding the Recognition and Enforcement of Foreign Arbitral Award, which stated that the recognition and enforcement of the award may be refused only if the party furnishes to the competent authority where the recognition and enforcement is sought proof several requirements.

It is unfortunate, but it is a fact, that eventually the matter on the annulment of Foreign Arbitral Award has not been regulated, either in any Indonesian Supreme Court Jurisprudences or in Law No. 30 Year 1999. However, the Applicant may refer to the 1958 New York Convention to pursue the legal basis for the application to annul a foreign arbitral award. Nevertheless, the application to annul ICC Award Number 16772 was denied by District Court of Central Jakarta through its decision Number 188/Pdt.G/Arb/2012/PN.Jkt.Pst on 8 November 2012 and it is strengthened through this Supreme Court Decision Number 212 K/Pdt.Sus-Arbt/2013. Therefore, we reach to a conclusion that the extend of Foreign Arbitral Award is only to recognition and enforcement, instead of to the annulment of it, through the District Court of Central Jakarta, with certain requirements under Article 66 to Article 69 of Indonesian Arbitration and Alternative Dispute Resolution Law Number 30 Year 1999.

CONCLUSION

From the analysis above, we can conclude that in Indonesia, as mandated in legal provisions (NYC 1958, Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution and Supreme Court Regulation No. 1 Year 1990 on Procedures of Foreign Arbitral Awards) foreign or International arbitration award can be registered to have executorial power to obtain legal certainty. The eligibility of International Arbitration Award is limited to awards which under the provisions of Indonesian law, fall within the scope of commercial law and public order. However, there is no concrete explanation regarding the scope or the definition of such order. The interpretation of public order depends on the interpretation of the judges related to the case.In Indonesia, the extent of Foreign Arbitral Award is only to recognition and enforcement, instead of to the annulment of it, through the District Court of Central Jakarta, with certain requirements under Article 66 to Article 69 of Indonesian Arbitration and Alternative Dispute Resolution Law Number 30 Year 1999. Meanwhile, the authority to annul the foreign arbitral award must be in the jurisdiction of where that foreign arbitral award is made.

........................................................................

1. Uncitral.org

2. Uncitral.org

3. Dr. Tin Zuraida, SH., MKn Dr. Tin Zuraida, SH., MKn, “Prinsip Eksekusi Putusan Arbitrase Internasional di Indonesia”, PT. Wastu Lanas Grafika, Surabaya, 2009, p. 277

4. Ibid.

5. Ibid.