Commercial Arbitration In Indonesia

COMMERCIAL ARBITRATION IN INDONESIA1 By : Prof. Mr. Dr. Sudargo Gautama

I. INTRODUCTION. The regulation on arbitration in the Republic of Indonesia is contained in articles 615-651 of the Regulation on Civil Procedure (abbreviated: R.C.P.). which has been in force since 1847 (state gazette 1847 no. 52 jo. 1849 no. 63). It is primary a copy of the Dutch Code of Civil Procedure which in her turn is based on the French "Code de Procedure Civile". The R.C.P. is in general no longer valid for Indonesia since the occupation of the Netherlands Indies by the Japanese forces in 1942.2 However, the articles on arbitration have to be regarded as still valid untill now. It is valid for persons living under European (Western) law (the population group of Europeans and Foreign Orientals-Chinese), but it is also used for persons who in civil affairs, according to the lawmaker, were placed on the group of persons living under their own customary law (the population-group of Autochtonous Indonesians and Foreign Orientals-non Chinese).3 1

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

"International Commercial Arbitration , The Republic of Indonesia", in the series "Arbitrage International Commercial. International Commercial Arbitration" published by the "Union Internationale des Avocats", Rap porteur General Pieter Sanders, Dalloz et Sirey (Paris), Martinus, Nyhoff (The Hague). 2

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

With the Japanese occupation the special courts for Europeans and Foreign Orientals the "Ratlen van Justine" were withdrawn and transformed into courts for all population-groups, the Pengadilan Negeri (the "State Courts" a revised form of the pre-war Landraden, the courts for indigenous population-group). Unification of Civil Courts and its procedural law was obtained. The R.C.P. is no longer uphold and the Revised Indonesian Regulation (abbreviated R.I.R., Herziene Indonesisch Reglement, Reglemen Indonesia Diperbaiki. State Gazette nr. 16/1848, nr. 44/1941) is now used by the State Courts. However, the provisions of the R.C.P. may be used by the Civil Courts if it is required for the realisation of the civil law and the rules contained in the R.I.R. are insufficient or do not exist at all. 3

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

First, the group o f "Europeans", then the "Foreign Orientals" (subdivided into "Orientals-Chinese" and the "Oriental-non Chinese", such Arabs, British-Indians, Malayans etc.) and lastly the "Natives" (indigenous population of Indonesia). (Sec. art. 163 and 131 of the "Indische Staatsregeling", the Constitution for the Netherlands Indies). See Sudargo Gautama and R. Hornick, An Introduction to Indonesian Lawja:karta-Bandung 1973,Chapter 1:

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The articles concerning arbitration as stipulated in the above articles of the R.C.P. have not been amended since their enforcement. The judge in a free Indonesia regards the respective articles of the R.C.P., as all the other articles of it, as guidings-line,. so that he is not strictly bound to the text of the respective articles. 4 Therefore the Indonesian Judge is free to set aside or to remould certain parts of the regulations on arbitration complied in the R.C.P., which he deems no longer suitable in the sphere of independence. For example the rules concerning the impossibility to appoint women as arbitrators (art. 617 alines 2) could be mentioned here. In independent Indonesia due respect is given to the status of women. As women are on an equal footing with men, the limitations concerning the eligibility of women, have to be regarded as no longer valid. We will discuss this issue further below. As the R.C.P. for Indonesia is based on the Dutch Code of Civil Procedure, which is in her turn founded on the French Code de Procedure Civile it is obvious that much what is valid for arbitration in the Netherlands and for France is also valuable for Indonesia. 2. ARBITRATION IN PRACTICE. Arbitration has been frequently practised in Indonesia, although due to the general economic decline in previous years, the number of arbitration cases has dropped significantly. There were permanent arbitral tribunals operative in several fields of trade.The tribunals have been created by verious associations and trade organisations. For example could be mentioned here : 1). The Association of Exporters of Indonesian Products (Organisasi Eksportir Hasil Bumi

Indonesia), in Jakarta; 2). The Indonesian Association of Fire Insurance Underwriters, Jakarta; 3).

The Indonesian Accident Underwriters Association, Jakarta. However, the above mentioned arbitration panels are at the moment inactive. The

Indonesian Association of Exporters and Indonesian Chamber of Commerce have "The pluralism of Indonesian Law". 4

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

Indonesia, the old laws of the Netherlands Indies are generally still valid, "provided that they are not contrary to the 1945 Constitution". Based on the last wordings the old codifications inherited from the Dutch were more regarded as guidelines which could be set

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recently made preparations to re-active the institute of arbitration. International contracts often mention arbitration by international commercial arbitration tribunals, such as the International Chamber of Commerce in Paris, the London Copra Association, Chamber of Commerce in Zurich, or Tokyo. In some administrative fields related with trade and enterprises arbitration is often resorted to. As example is worthwhile mentioning here, the arbitration procedure in labor disputes arising between an employer and his employees, based on the "Emergency Act no. 16 of 1951 for the Settlement of Labor Disputes (Undang-undang Darurat no. 16 tahun 1951 tentang penyelesaian perselisihan perburuhan, later revoked and amended by Law n o. 22 of 1957, S tate 1957 no. 42) . The par ties in dispute may on their own initiative or at the suggestion of the Regional Committee for the Settlement of Labor Disputes submit their case to an arbitrator. Further is mentioned here the provision adopted in the recent Foreign Capital Investment Law no. 1 of 1967 (State Gazette 1967 no. 1), where the arbitration procedure is used as guarantee for the foreign investor in case his property is expropriated or nationalised. The arbitrators will fix the amount, means and ways of payment of the compensation (art. alinea 2). 3. THE ARBITRATION AGREEMENT. According to Indonesian law parties are given much freedom to enter into arbitral agreements. Generally speaking any dispute which could be submitted before th e cou rt ma y be s ettled b y wa y of arbitr ation. In principle parties may subject to arbitration all rights of which they have free disposition. This is outlined in the opening article concerning arbitration of the R.C.P. (art. 615). The same provision is made by the legislator concerning the possibility to settle disputes by means of a compromise (dading, perdamaian) 5 So, disputes con-cerning gifts and baquests for maintenance, lodging and clothing, concerning judical separation or divorce and the partition of joint property, in short disputes concerning personal status and all other matters concerning which a compromise may not be affected, are excluded from arbitration. It is specific for the situation and condition in Indonesia, that arbitration is 5

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

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impossible concerning cases which are subjected under the adat (or customary) law sphere. Only disputes based on European or imported law may be submited to arbitration. Adat or customary law disputes are b y their ver y nature improper for settlement by arbitration. The adat law procedure of settling of disputes provides the institution of local village tribunals, which in practice always strongly recommend a peaceful settlement, so that the need for arbitration is not seriously felt. The capacity of parties to enter into arbitral agree-ments are subject to the same rules as those governing contracts in general. Persons requiring special powers from the Courts to enter into contracts need the same to refer to arbitration (art. 615 alinea 2 R.C.P.). Persons who require special Court powers to effect a private arrangement or to sell property need the same disposition. Infants are incapable to act for themselves. Their guardians can arrange arbitral agreements upon empowering in this regard by the respective Judge. A bankrupt cannot make an arbitration arrangement, the Trustee may do it for him, provided he has obtained an express authorisation to do so. Types of Arbitration Agreements. There are two kinds of arbitral agreement. A submission agreement is drawn in the case of an existing dispute (a). Further, the arbitral clause intended for disputes that may rise in the future is another possibility (pactum de compromitendo) (b). a)The

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

a notary (art. 618). The document must contain the subject matters in dispute. Further it must contain the surnames and proper names of the parties and their domicile, the names and domicile of the arbitrators. The last mentioned persons must always be appointed in odd numbers. The respective article states explicitly that non-ob-servance of these rules make the submission null and void (art. 618 alines 3). b)The

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

there are several forms used. 4

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Example : A simple form of arbitration clause reads as follows: "If any dispute shall at any time arise in connection with this contract, every such dispute as and when the same arises shall finally be settled by arbitrati-on". Usually in connection herewith is stated the number of arbitrators (always in odd numbers) and that the arbitral award will be final and binding. It is further customary that a subsequent outline of the procedure to be followed is given, such as the method of appointing the arbitrators, the inclusion of a reference to one of the sets or arbitration-rules of the respective trade organi-sations, which provide a procedure of a more detailed nature. In the draft new Code of Civil Procedure prepared by the Indonesian Institute of National Legal Development a clear division is also made between the submission, in the case of an existing dispute and the arbitral clause, intended for future disputes (art. 83).. c)Effects

of the Arbitration Agreement.

The arbitral agreement precludes access to the Courts. They loose their jurisdiction in the matter. The dispute can only be settled by the arbitrators. 4. THE ARBITRATORS. Almost anybody, who is capable of being appointed as an agent (attorney) may be appointed as arbitrator. Minors and members of the judiciary, such as Judges, prosecutors, secretaries and assistant-secretaries of the Courts are non-eligible. In the text of article 617 R.C.P. which contain this provision married women may also not be appointed as arbitrators. But as mentioned above, in independent Indonesia, with due respect for the status of women, the limitations concerning the capacity of women to be nominated as arbitrators, could no longer be uphold. It is in conformity with the general trend prevailing in Indonesia today, to accept females as equals of males. In modern Indonesia many women are serving in social positions and functions which were before the emancipation reserved for men only. Many Indonesian women have been appointed as judges, prosecutors, notaries, engineers, medical doctors, University professors, governors etc.

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Section 617 R.C.P. only mentioned "Women", but it is obvious that "married women" is meant. This is in connection with the stipulation in the Civil Code that married women are unable to act on their own, without their husband's assistance (art. 108, 110). However, since the new interpretation of validity of the Civil Code came into force, the said provision which regard women as lower than men, could no longer be maintained. On September 3, 1963 the Supreme Court of Indonesia has issued wellknown Circular Letter (no.3/1963) to all Courts in the country, stipulating i.a. that respective articles 108 and 110 of the C.C. are to be regarded as no longer valid.6 In the Draft of a new Civil Code for Indonesia it is required that to be capab le for the appointment as arbitrator, one must have the Indonesian nationality, be not less than 25 years old, have no relationship in straight or side line up to the th ird degree with an y of the disputing parties, according to a certificate of the Police be of good conduct and good morals not having any mental or physical disorders (art. 85). As has been mentioned above, the arbitrators must always be nominated in odd numbers. Arbitration by three arbitrators is customary. Arbitration by two arbitrators is null and void. No umpire system exists in Indonesia. a) Nomination of Arbitrators. The submission must contain the names of the arbitrators. In the arbitral clause the names of arbitrators are seldom mentioned. This is understandable, as the arbitration clause refer to future diputes only. As a rule the arbitral clause indicates the procedure of appointing arbitrators when it becomes necessary. For example the parties may state as follows : "The party desiring to submit a case to arbitration must give the other party notices of his intention. Three arbitrators shall be appointed by both parties by mutual agreement. If within four weeks from the date of such written notice the parties are unable to agree on the selection of the Arbitrators, either of the parties may request the Chairman or in his absence or inability to act, the acting Chairman of the respective Trade Association in Indonesia to appoint the Arbitrators. The Arbitrators are bound to pronounce on the issue brought before the m in a just an d equitable manner ( as amiables. compositeurs). 6

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

Quest for Unit y"; S. Gautama, Legal developments in Independent Indonesia, I "Law Asia" Dec. 1970 no. 1 at 1 57 ; Le v. Da ni el S., "Th e la d y an d t he Ba n ya n Tre e: C i vi l la w change in Indonesia", XIV Am. J. Comp. L. (1965) 285.

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The Arbitrators shall determine the Rules of the Arbitration Procedure. In their final award the Arbitrators shall decide by which party or parties, the costs of Arbitration Preceedings, including the disbursements and the fees of the Arbitrators and the fees and disbursements of the lawyers representing the parties 7 , shall be wholly or partially borne. The arbitrators shall take the necessary measures in order that the original of the Award or Awards shall be field at the Court of Competent Jurisdiction in Jakarta, in which city the Awards shall be made. The powers to be granted to the Arbitrators shall continue until the filing referred to above has been made". In the above example it has been agreed that both parties will together appoint the three arbitrators. It is however more customary practice to stipulate, that each of the parties appoints one arbitrator and that the third arbitrator will be appointed by the two arbitrators already nominated. This is a sort of "party arbitration" which is much critised as the arbitrators nominated by the parties will as a matter of fact primarily play the role of defendor of the inter ests of the part y b y whom he has been appointed. With this in mind it is much better to refer to the rules of arbitration of a connected Institute or Organisation, with its rules of procedure, so that this difficulty would be overcome. Whenever the arbitral clause mention neither the names of the arbitrators nor a method of appointing them, article 619 R.C.P. prescribes, that the parties should first attempt to reach agreement about the nomination of the arbitrators. In case they fail to come-to an agreement, the arbitrators must be nominated upon the request of the most interested party, by the judge who would have been competent, if the matter had not been submitted to arbitration. The same solution is given by art. 651 in case one of the arbitrators should die before the award was given. b) Disqualification. Arbitrators may only be disqualified for reasons appearing after their nomination (art. 621 R.C.P.). The same reasons for disqualification of judges are also applied to ar bitr a tor s . I t is the dail y j udge w ho w ould be competent to deal with 7

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

(Reglemen Indonesia Diperbaharui, Herziene Indonesisch Reglement, S.G. nr. 44/1941, supra note 1) each part y has to pa y his o wn la wyer. The loosing part y has to pa y onl y the Court costs (art. 182).

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the case if there was no arbitration, who is competent to adjudicate on the disqualification of the arbitrators. c) Fees and Liability. The fees of the arbitrators are usually determined by themselves. It is appropriate to ask for a sum in advance. No. need to say that the fees must remain within the limits set by good faith. Recently the arbitration procedure in Indonesia is in practice far more expensive than the ordinary Court procedure. For example the costs of arbitration before the ad hoc Arbitration Commission of the Indonesian Association of Exporters of Indonesian Products (Organi-sasi Eksportir Hasil Bumi Indonesia) has become so expensive that plaintiffs hesitate to bring their case for arbitration. The arbitrators are bound to complete their duties within the period specified by the parties in the sub-• mission. If no stipulations are made by the parties concerning the time limit for arbitration, the term of six months set out by the law will not be exceeded (art. 620 R.C.P.). If the arbitrators fail to fulfill this time -limit, the parties can hold them liable to damages and interests (art. 623). 5. THE PROCEDURE. The parties are free to specify the time-limits and formalities of the arbitration proceedings. They may regulate this in the arbital agreement or they may just refer to already existing arbitration rules which contain more detailed regulations. The arbitrators may determine themselves the pro-cedure in case parties has not done so. As has been mentioned above, the law prescribes that whenever parties have not regulated otherwise, the time limit within which a decision must have been made, may not exceed six months after the acceptance of the nomination as arbitrators. It is further stated that the arbitrators have to render judgement in accordance with the rules of law, unless the parties have given them freedom to act as "amiables compositieurs" (art. 631 R.C.P.). The Draft new Code of Civil Procedure for Indonesia gives more freedom to the arbitrators. They are at liberty to judge according to the rules of law and or 8

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principles of justice as amiable compositeurs (art. 87). It is customar y in Indonesian practice to give arbitrators the opportunity to act as amiable compositeurs. This is in accordance with the general principles concerning contracts in Indonesian civil law. All contracts must be executed in good faith (art. 1338 C.C.). The arbitrators who are empowered to act as amiable compositeurs have also to observe the rules of law. They too are bound to state the reasons of their award and to observe the imperative rules of law. It is only with the rules of dispositive nature that they have a greater freedom. The arbitrators may hear witnesses and call experts. If the last mentioned persons refuse to appear before the arbitration commission an order to

give

evidence or to take

the oath, the Court intervenes upon an application of the party concerned (art. 630 R.C.P.). The Court will appoint a special Judge to conduct the hearings. In this case the time-limits are suspended. The same provisions appear in the Draft new Code of Civil Procedure (art. 86). The said article even elaborates further in case a witness living outside the territory of the autonomous district must be heard. In that case the request for hearing will be delegated to the local Judge of the witness' living quarters. 6 . T HE AR B I T RA L AWAR D .

a)

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

based (art. 632 R.C:P.). It must be signed by the arbitrators. In case the minority refuses to sign, the other arbitrators make mention of this. The award will then have the same effect as if it had been duly signed by all the arbitrators (art. 633 R.C.P.). The award will further contain the names of the parties and a summary of their respective standpoints. The Draft of a new Code on Civil Procedure is more elaborate on this point. The award must beside the above mentioned items, also state the name and address of the arbitrators, the basic points of the litigation which according to the arbitration agreement has to be settled by arbitration; the conclusion and opinion of each of the 9

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arbitrators, the ultimate opinion of the arbitral tribunal concerning the whole and the grounds on which the award is given; the dictum of the award and the place and date of the award, signed by the arbitrators (art. 87).

b )

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

island, the original document containing the arbitral award must be field with the Clerk of the Court of First Instance of the district in which the award was made (art. 634 R.C.P.). At the same time the act of appointment of the arbitrators must be filed (art. 635 R.C.P.). If the arbitrators do not observe this duty to file, they are liable for the damages which the non-observance might cause. The award will not becomes null and void because of non-observance to file. c) Enforcement. The arbitral award is only executable after an order for enforcement or "exequatur" is obtained from the President of the Court of First Instance in the district where it has been made (art. 637 R.C.P.). The exequatur will be given in the form prescribed for ordinary Court decisions. The "sacred" wordings "In the name of Justice based on God Almighty" ("Demi keadilan berdasarkan Ketuhanan Yang Maha Esa"), will be added above the original document and the official copy of the award (art. 435 R.C.P.). 8 An action to have the award set aside can be brought b y wa y of an objection against the exequatur (art. 645 R.C.P.). The Court fees are low, but varies now from place to place, depending on the policy of the President of the Court and the general index of living in the respective area.9 Before granting the order enforce the President of the Court has to examine the content of the award. He will examine the basis of the award, the appointment of the arbitrators and their competency to ensure that they have not gone beyond the limits. The examination is or a summary nature. The parties have the right to 8

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

East is the most expensive. It must be added however, that this Court functions best (speedy hearings and decisions). 9

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

Kekuasaan Kehakiman).

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challenge the competence of the arbitrators in a latter stage of the procedure, i.e. during the opposition for setting aside the award. In practice leave to enforce is usually granted. The question is merely whether prima facie the.award con-stitutes a valid one capable of being enforced. The arbitral award with granted leave to enforce will be executed as an ordinary decision in civil procedures (art. 639 R.C.P.). A more elaborate system of procedure to obtain leave of enforcement is to be found in the draft of the new Code of Civil Procedure (art. 88). After the arbitral award has been filed by the Court's Registrar, the President of the Court will decide whether the award ma y be executed or not. He will examine whether the formal requirements concerning the arbitration agreement (art.83), the contents of the said agreement (art. 84), the prere-quisites for the nomination of arbitrators (art. 85) have been fulfilled. He is however not entitled to go into the merrits of the case. Within two weeks after the award has been forwarded to the respective parties they have the right to submit an opposition for setting aside of the award. The Court will immediately fix the date for the hearing, which will be done with three Judges. The decision after this hearing is final and binds the parties. Whenever the award has been found in accordance with the formal requirements and the time limit mentioned above has passed or the opposition for setting aside has not been granted, the President of the Court will grant the leave to enforce. d) Provisional Enforcement, Arrest for Debt, For-feiture. According to the text of art. 647 R.C.P. the arbitral award may contain an arrest for debt. The debtor may be physically constraint in the same cases as in ordinary Court proceedings Judges may grant such measures. In independent Indonesia such measures of physical arrest for the payment of debts are regarded as to be out of date. Physical arrest for pecuniary debts in civil cases is no longer practised. 10 The forfeiture of a sum of money in respect of ever y day 10

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

court proceedings are no longer respected by the public and creditors often try to transform their civil claims into criminal cases. Cp. Sidarta, P.H., S.H., "Mengapa orang lebih condong menyelesaikan tuntutan-tuntutan perdata diluar Pengadilan?"

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during which the award is not complied with is often added. In Indonesian practice of recent years generally no provisional enforcement is realised. This is due to a special Instruction of the President of the Supreme Court to all the Courts in Indonesia, that it is advisable not to grant leaves for provisional enforcement of Court's decisions.11 Moreover provisional enforcement makes sense only in cases where the right to appeal exists. This is generally not so with arbitration cases. e) Publication. There is no special publication of arbitral awards in Indonesia. Even the publication of Court's decision is not yet as regular and continueous as the legal profession hopes.12 f) Fiscal costs. Ther e are no special taxes connected with the enforcement of arbitral awards. The Court's fees are generally speaking low. According to the Indonesian Law on civil procedure it is not necessary to have the assistance of a lawyer to request for enforcement or to appear before the Court.13 7. MEANS OF RECOURSE a) Appel. In general no higher provision is open against the arbitral award as parties in practice usually exclude the possibility of appeal in the arbitration agreement. No (Why people prefer to settle civil claims out of Court), 11 Hukum dan Keadilan (Law and Justice), Magazine of the Indonesian Bar Association. 11

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

approval), later on revoked by Supreme Court Circular Letter of May 17, 1971 No. M.A./Pemb./953/71 (prior execution possible if in accordance with art. 180 par. 1 of the Revised Indonesian Regulation for Java and Madura) and art. 191 par 1 Regulation on Procedure for the Outer Provinces. 12

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

recently is a good start. 13

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

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

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cassation is possible. Appeal is only open whenever the parties have not exclude it in their submission or in the arbitration clause. Moreover the amount involved must be at least Rp.25.000,- (twenty five thousand Rupiahs).14 The appeal is forwarded to the Supreme Court. A more detailed regulation of the appeal procedure against arbitral awards is given in the Law of the Supreme Court (UndangUndang Mahkamah Agung Indonesia, State Gazette 1950 no. 50). The request for appeal has to be submitted in writing to the Chief Justice within the period of one month of the date of acknowledgement of the award to the respective party. It is to be accompanied by a copy of the said award and other relevant documents. Both parties may submit their written arguments and other instruments and documents to the Registrar of the Supreme Court, forwarding a copy to the other party. Before rendering a decision on the matter, the Supreme Court may order the personal appearance of the parties in dispute. The execution of the Supreme Court's decision in appeal of arbitral awards is effected in the same manner as an ordinary decision of the Court of First Instance in civil matters (art. 108-111). The Law of the Supreme Court is however regarded as no longer valid now, i.e. after the coming into force of the Law on the Administration of Justice in the general Courts and the Supreme Court (Undang-undang tentang Pengadilan dalam lingkung-an Peradilan Umum dan Mahkamah Agung, no. 13 of 1965, State Gazette 1965 no. 70) on Jul y 6, 1965. But, as the replacing law has no provisions yet concerning the appeal procedure of arbitral awards the above mentioned articles of the Law of the Supreme Court 1950 are in today's practice still regarded and used as guidance in this respect. b)"Cassation" and "Requete-civile "

"Cassation" on points of law before the Supreme Court and "requite-civile" is not allowed (art. 642 R.C.P.). Formal "opposition" (verzet, perlawanan) against the arbitral award is excluded too (art. 636 R. C. P.). As outlined above, it is however possible to submit a request to set aside the enforcement of an arbitral award. This is in practice 14

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

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quite similar to an opposition although the procedure is launched not directly against the award but towards the enforcement thereof. c)The Nullity of the Award.

(1) Lack of jurisdiction. It is possible that an action for the nullity of an award is brought before the Court on the ground that the very basis of arbitration is lacking. The arbitrator are absolutely incompetent to arbitrate because there is no valid arbitration agreement. Such an action ma y be brought in the Court of the defendant's domicile. No special formalities are required. The request is not subject to a time limit. (2) Action Setting Aside the Award. Articles 643-646 provides proceedings for setting aside arbitral awards by arbitrators who did have jurisdic-tion, but have made serious mistakes. The action can be brought in case the award exceeds the scope of the submission. i.e. beyond the scope of the mandate which the parties have given. Another ground is if the award was made on a void submission or that has expired. Further. it is open when the award has been made by only some arbitrators, not authorised to decide in the absence of others. It is also possible to bring the action if the arbitrators have decided concerning matters which were not claimed or were in excess of what was claimed. This is in accordance with the general rule of civil procedure. 15 The award is also open to the said action if it contains contradictory decisions. Further, if the arbitrators have failed to decide on one or several of the matters listed in the submission. Or, if procedural formali-ties prescribed on penalty of nullity have been disregarded, but only in cases where due to a specific clause to that effect, the arbitrators were obliged to observe the ordinary rules of civil procedure. Furthermore, if the award was based on documents which after the award was given, were recognised or declared to be false. Also, if after the making of the award, documents of a decisive nature withheld by one of the parties were discovered. And lastly,. if the award is based on fraud committed during the proceedings and duly established. It is obvious that the grounds for the action of 15

Cp. art. 189 par 3 Revised Indonesian Regulation.

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setting aside the award are in general the same as the grounds for the "requete-civile" procedure, which is, as mentioned above, not possible regarding arbitral awards. The draft of a new Code of Civil Procedure does not provide for such an elaborate enumeration of the grounds for the action of setting aside the award. As mentioned above, during the erocedure of enforcement, the President of the Court will examine whether the requirements, for the arbitration procedure and the arbitration agreement are fulfilled. During this period, the losing party has the possibility to submit an opposition against the enforcement (art. 88). 8. ENFORCEMENT OF FOREIGN ARBITRAL AWARDS. a ) T h e C o nven tion of G eneva o f 1927. Based on article 10 alinea 2 of the Convention of Geneva of 26 September 1927, the Netherlands Government has acknowledged her intention to have the said Convention also valid for the territory of the Netherlands. Indies. On' April 28, 1931 this Convention came into operation for the former Netherlands Indies (State Gazette 1933 no. 131). As this Convention has not been explicity revoked by the Government of the Republic of Indonesia, based on the general principles of State succession, the primacy of international law and the Transfer Agreement (Overgangsovereenkomst) of the Round Table Conference held in connection with the transfer of sovereignty by the Netherlands to the Federal Republic of Indonesia (Ronde Tafel Conferentie) this Convention must be deemed still valid for Indonesia. Article 5 of the Transfer Agreement stated that international agreements which were in force for the territory of the Federal Republic of Indonesia remain valid for the Republic provided the respective agreements are not terminated by the Republic herself. Although the Agreements of the Round Table Conference are according to Indonesian law no longer valid, as the agreements have been explicitly revoked, the stipulations concerning the validity of international agreements for the territory of the Republic of Indonesia are still uphold. A special regulation was enacted by the Netherlands Indies government concerning the enforcement of arbitral awards made in one of the countries which are signatories to the 15

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Geneva Convention. By King's Decision of December 19, 1932 No. 82 (State Gazette 1933 no. 133) special provisions were issued for the territory of the former Dutch colony. Before the arbitral award may be enforced in Indonesia special leave must be obtained from the President of the Court of the district where the awards must be enforce. This leave to enforce must be requested through the services of a solicitor. The President of the Court will make certain investigations. At least he has to call all the parties to appear in Court. After the hearing and examination of the documents handed over to him by the parties, the President of the Court will give a decision granting the leave to enforce or refusing it. His decision will, be accompanied by considerations and pronounced in public. The leave to enforce will be valid against all the parties and within the whole territor y of Indonesia ( a r t . 3 ) . T he de c is io n i s no t op en f o r op pos it i o n . It is however open for appeal within four weeks (art. 4 alines 2). According to the wordings of the said article, appeal must be forwarded to the Supreme Court of Indonesia. The investigations into the foreign arbitral award effected by the President of the Court go deeper than the summary examination undertaken by the same Judge in connection with the Indonesian arbitral award. The enforcement of the foreign arbitral award should not be against the public policy or principles of public Law of Indonesia. b) Awards of countries outside the Convention. In order to achieve enforcement of an award, which is not governed by the Geneva Convention or other specific Treaty, a judgement of an Indonesian Court of Law must be obtained. The applicant will base his request both on the arbitral agreement made with the Indonesian party and on the award made in pursuance thereof and apply for recognition of arbitral award. The request will be submitted on the Court of domicile of the Indonesian debtor. Ordinary Court proceedings will take place. The arbitral award will be in general recognised, without new examination of the case, provided that it is valid and contains nothing contrary to public policy. 16

MAN ON STREET SOCIETY 2009