Arbitration in Indonesia - Chapter 3 - International Commercial Arbitration in Asia - 2nd Edition
About the Editors:
Philip J. McConnaughay is Dean and Professor of Law at the Penn State University School of Law and Former Professor of Law at the University of Illinois College of Law in Urbana-Champaign, Illinois. Dean McConnaughay joined the College of Law faculty at Illinois in1996 following seventeen years of international practice with Morrison & Foerster LLP, including almost ten years as a resident Partner in Morrison & Foerster's Tokyo and Hong Kong offices. He has represented parties from throughout the world in major international arbitrations in China, Japan, Southeast Asia, and the United States, including representing Fujitsu Limited in the celebrated IBM/Fujitsu Arbitration. Dean McConnaughay has served as a foreign advisor to arbitration law reform efforts in Indonesia, he has lectured on international arbitration and economic development in China, Vietnam, Japan, and elsewhere in Asia, Europe, and North America.
Thomas B. Ginsburg is Professor of Law at the University of Chicago, where he works on comparative and international law from an interdisciplinary perspective. He holds B.A., J.D. and Ph.D. degrees from the University of California at Berkeley. One of his books, Judicial Review in New Democracies, (Cambridge University Press, 2003) won the C. Herman Pritchett Award from the American Political Science Association for best book on law and courts. He has served as a visiting professor at the University of Tokyo, Kyushu University, Seoul National University, the Interdisciplinary Center Herzliya, the University of Pennsylvania, and the University of Trento. He currently directs a project funded by the National Science Foundation to gather and analyze the constitutions of all independent nation-states since 1789. Before entering law teaching, he served as a legal advisor at the Iran-U.S. Claims Tribunal, The Hague, Netherlands, and has consulted with numerous international development agencies and governments on legal and constitutional reform.
# About the Contributors:
Jingzhou Tao (China). Jingzhou Tao is the Managing Partner of the Beijing office of DLA Piper. Based in Beijing since 1991, Mr. Tao specializes in Joint Venture Law and Arbitration. Mr. Tao serves as an arbitrator with CIETAC, and as an Adjunct Professor of Law at Beijing University. He is also a member of the International Chamber of Commerce (ICC) International Court of Arbitration.
# David Sandborg (Hong Kong). David Sandborg is a member of the Faculty of the School of Law of the City University of Hong Kong, where he is the Programme Leader for the Masters Degree Programme in Arbitration and Dispute Resolution. He is a Fellow of the Chartered Institute of Arbitrators (East Asia Branch) and of the Hong Kong Institute of Arbitrators. He is listed on arbitration panels throughout Asia, Europe, and the United States, including those of CIETAC (China), HKIAC (Hong Kong), SIAC (Singapore), KCAB (Korea), the Kuala Lumpur Centre, WIPO (Geneva), the AAA Complex Case Panel, and the Center for Public Resources Panel of Distinguished Neutrals. For 12 years, Professor Sandborg was Chair of the AAA Asia Pacific Center for the Resolution of International Business Disputes. He has served as both advocate and arbitrator in ICC arbitration proceedings, and he has worked with the Vietnam Ministry of Justice on arbitration law reform in Vietnam.
# Sebastiaan Pompe and Marie-Christine van Waes (Indonesia). Dr. Sebastiaan Pompe, formerly Senior Lecturer at Leiden University Law School, The Netherlands, currently is Legal Advisor to the International Monetary Fund in Jakarta. Marie-Christine Schröeder-van Waes is a practising lawyer, and presently is Of Counsel to the law firm Ali Budiardjo Nugroho Reksodiputro in Jakarta.
# David A. Livdahl and Asako Yamagami (Japan). Now serving as Chief Representative, Paul Hastings Beijing Office, Mr. Livdahl practiced law in California from 1977 to 1988. He has practiced law and resided in Tokyo, Hong Kong, and Beijing since 1988; he speaks and reads Japanese and Mandarin Chinese. Mr. Livdahl is a Fellow of The Chartered Institute of Arbitrators, and he is an international panelist of the Hong Kong International Arbitration Center and the China International, Economic & Trade Arbitration Commission. He has been active in representing clients in transactions and arbitrations throughout Asia. Asako Yamagami is owed a special thanks for assistance in updating this article to reflect the 2004 Japanese Arbitration Law. Ms. Yamagami is an attorney with Taiyo Law Office in association with Paul, Hastings, Janofsky & Walker Gaikokuho Jimu Bengoshi Jimusho in Tokyo.
# Byung-Chol Yoon, Jung-Keol Suh, Dai-Hyun Kim, and Grant L. Kim (Korea). Byung-Chol Yoon and Jung-Keol Suh are attorneys at the international law firm of Kim & Chang in Seoul, Korea (www.kimchang.com). Dai-Hyun Kim is an arbitration specialist at Kim & Chang and a former official of the Korea Commercial Arbitration Board. Grant L. Kim is a Foreign Legal Consultant at Kim & Chang and a former partner of Morrison & Foerster LLP, San Francisco, California.
# Vinayak P. Pradhan and Varsha Doshi (Malaysia). Vinayak Pradhan is Commissioner of the United Nations Compensation Commission, Geneva, Switzerland, and a Partner of Skrine and Co, Kuala Lumpur. He is a Fellow of the Malaysian Institute of Arbitrators and of the Chartered Institute of Arbitrators (U.K.) and was Chairman of it’s Malaysian branch. He appears as counsel and sits as arbitrator in domestic and international arbitrations. He is a member and on the panel of various arbitral institutions. Varsha Doshi is a Partner of Zaid Ibrahim & Co., Kuala Lumpur. She has authored two books on the law for laymen as well as “Restitutionary Remedies in Illegal Agreements” for lawyers.
# Victor P. Lazatin and Patricia Ann T. Prodigalidad (Philippines). Victor Lazatin is the Managing Partner of Abello Concepcion Regala & Cruz, Manila. Mr. Lazatin is a member of the Faculty and a Construction Arbitrator for the Construction Industry Arbitration Commission, Director of the Philippine Institute of Construction Arbitrators, a Member of the Philippine Dispute Resolution Center, and, Director of the International Chamber of Commerce, Philippine Council. Patricia Ann T. Prodigalidad is an Associate of Abello Concepcion Regala & Cruz, Manila.
# Lih Shyng Yang and Leslie Chew (Singapore). Lih Shyng Yang is a Partner and Head of the Shipping and International Trade Department of Khattar Wong, Singapore. He is listed on the arbitration panel of the Singapore International Arbitration Centre (SIAC), and regularly serves as counsel or arbitrator in international commercial and shipping disputes conducted in either Chinese or English. Leslie Chew is a Senior Counsel in Singapore (Singapore’s equivalent of Queen’s Counsel) and the Managing Partner of Khattar Wong. He is the immediate past President of the Singapore Institute of Arbitrators, a Fellow of the Singapore and Chartered Institute of Arbitrators, and a member of the arbitration panels of SIAC, HKIAC (Hong Kong), and BANI (Indonesia).
# Nigel N.T. Li and David W. Su (Taiwan). Nigel N.T. Li is a Partner and David W. Su is a Senior Attorney with Lee & Li in Taipei, Taiwan. Both Mr. Li and Mr. Su are Adjunct Professors of Law at Soochow University Graduate School of Law in Taipei. Both Mr. Li and Mr. Su are Editors of the CAA Arbitration Journal, a publication by the Arbitration Association of the ROC.
# Anan Chantara-opakorn (Thailand). Anan Chantara-opakorn in a Barrister-at-Law and Associate Professor of Law and Former Director of the International Law and Business Training Institute, Faculty of Law, Thammasat University, Thailand. Professor Chantara-opakorn is an advisor or member of numerous government legislative committees, including the Senate’s Committee on Draft Small and Medium Enterprises Promotion Act; the Senate’s Committee on Draft Anti-dumping and Subsidies Act; the House of Representatives’ Committee on Draft Trade Secrets Act; the Working Group for the Council of State on Draft International Sales of Goods Act; the Drafting Committee on Code of Ethics for Arbitrators, Ministry of Justice; and the Maritime Law Committee, Office of Maritime Commercial Promotion.
# Do Y Thanh (Vietnam). Do Y Thanh is the Deputy Director General of the Viet Nam Chamber of Commerce & Industry (VCCI), Ho Chi Minh City Branch, Director of VCCI’s Legal Department, Ho Chi Minh City Branch, and Vice President of the Viet Nam General Average Adjustment Committee. Ms. Thanh has lectured throughout Asia, Europe, and North and South America on trade, intellectual property, and commercial dispute resolution topics.
Originally from: International Commercial Arbitration in Asia - 2nd Edition
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Arbitration in Indonesia
Philip J. McConnaughay and Thomas B. Ginsburg
INTRODUCTION
The law governing arbitration in Indonesia is Indonesia’s new Law
on Arbitration and Alternative Dispute Settlement nr. 30 of 1999,
which was enacted on August 12, 1999 (hereafter: the Arbitration Law
or the new law). An English language version of Indonesia’s new
Arbitration Law is included at the Indonesia Tab in the statutory
appendices to this volume. The new Arbitration Law finally replaces
the Dutch colonial legal framework for arbitration, substantially
unchanged since 1847, which was found at Articles 615 to 651 of the
colonial Code on Civil Procedure for Europeans (Reglement op de
Rechtsvordering, hereafter the colonial Dutch Civil Procedure). The
principal thrust of the new law is to place Indonesian arbitration law on
a national footing, cast in the form of a distinct statute. As regards
substance, however, the new law does not constitute a major break with
the past, although there are a number of innovations. Two issues may
be mentioned specifically here in terms of what the law both did, and
failed to do. As for improvements, the law creates clarity with regard to
the enforcement of foreign arbitral awards, which has been a highly
contentious issue in the recent past and impacted directly on
commercial relations and investments costs in Indonesia. On the
downside, the new law shows some major gaps, notably with regard to
the enforcement of domestically rendered awards. We will cover these
issues as we look at the substantive provisions of the law.
We have divided this chapter into three principal sections. The first
will focus on and explain the principal provisions of Indonesia’s new
Arbitration Law. The second will discuss some problematic judicial
rulings since the new Law’s enactment. These concern (1) the duty of
state courts to refer to arbitration disputes that are subject to an
arbitration agreement, (2) the obligation of state courts to enforce valid
domestic and foreign arbitration awards, and (3) the relationship between
arbitration and bankruptcy proceedings. The third and final section will
briefly introduce the principal arbitral institutions available for
institutional arbitrations in Indonesia.
I. THE NEW INDONESIAN ARBITRATION LAW
The Arbitration Law has 82 Articles, divided into 11 chapters as
follows: General Provisions (Ch.1), Alternative Dispute Resolution
(Ch.2), Arbitration conditions, appointment of arbitrators and demands
for recusal (Ch.3), The procedure before the arbitration tribunal (Ch.4),
Opinion and arbitral decision (Ch.5), Award Enforcement (Ch.6),
Annulment (Ch.7), Termination (Ch.8), Costs (Ch.9), Transitional
provisions (Ch.10), and Concluding provisions (Ch.11). There also is an
official elucidation, which is not legally binding.
Full Table of Contents from "International Commercial Arbitration in Asia - 2nd Edition"
Chapter 1 Arbitration in China
Introduction
I. Comparison of Arbitration and Litigation
A. The Advantages of Arbitration over Litigation
B. Difficulties in Resolving Disputes before PRC Courts
II. The Legal Framework of Arbitration in China
A. The PRC Arbitration Law
B. The New York Convention
III. Domestic and Foreign Related Arbitration in China
A. Domestic Arbitration
B. Foreign related Arbitration
C. The China Arbitration Association
IV. CIETAC
A. CIETAC's Administrative Structure
B. CIETAC Arbitrators
C. Language of CIETAC Arbitration
D. Limitation Period for Initiating a CIETAC Arbitration
E. CIETAC Rules
F. CIETAC Rules
G. CIETAC Rules and Reasons for Revisions
V. Arbitration Agreements: Permissible Scope, Requirements, and Severability
A. Permissible Scope
B. Requirements
C. Severability
VI. Recommended Arbitration Clause
VII. Applicable Law
VIII. Combining Arbitration with Conciliation
A. Why Combine Conciliation with Arbitration?
B. Prerequisites and Procedure
C. Conciliation Settlements
IX. The Enforcement of Domestic, Foreign Related and Foreign Arbitral Awards in China
A. The Set Aside and Enforcement of Domestic Arbitral Awards
B. The Set Aside and Enforcement of Foreign Related Arbitral Awards Rendered in the PRC
C. The Enforcement of Foreign Arbitral Awards
D. The Future of Award Enforcement in China
E. Accounting for Failure
F. Special Issues Concerning the Enforcement of Hong Kong Arbitration Awards
G. Special Issues Concerning the Enforcement of Taiwanese Arbitral Awards
Chapter 2 Arbitration in Hong Kong
I. Introduction
II. The Enforcement of Awards Between Hong Kong and Mainland China
III. The Hong Kong International Arbitration Centre
A. Arbitration Rules of the HKIAC
B. The HKIAC's Default Appointing Authority
C. HKIAC Mediation Activities and Other Recent Developments
IV. The Historical Evolution of Hong Kong's Arbitration Ordinance
V. The Structure and Key Features of Hong Kong's Current Arbitration Ordinance
A. The Structure of the Arbitration Ordinance
B. The Key Features of the Arbitration Ordinance
VI. Professional Arbitration Organizations in Hong Kong
A. Chartered Institute of Arbitrators (East Asia Branch)
B. The Hong Kong Institute of Arbitrators (HKIArb)
VII. Construction Arbitration
VIII. Maritime Arbitration in Hong Kong
IX. Arbitration Law Reform in hong Kong: The Way Forward
Chapter 3 Arbitration in Indonesia
Introduction
I. The New Indonesian Arbitration Law
A. General Provisions
B. The Initiation of Arbitration and the Appointment, Recusal and Compensation of Arbitration
C. The Arbitration: Procedures, Interim Measures, and Awards
D. The Enforcement of Awards
II. Recent Judicial Developments Regarding Arbitration in Indonesia
A. Arbitration and State Court Jurisdiction
B. The Enforcement of Arbitral Awards
C. Arbitration and Bankruptcy
III. Arbitration Institutions in Indonesia
Chapter 4 Arbitration in Japan
I. Introduction
II. The Legal Environment Concerning International Arbitration
A. Japan's Enforcement of Foreign Arbitral Agreements and Awards
B. Japan's Suitability as a Site for International Arbitrations
III. Private Arbitral Institutions in Japan: The JCAA
A. Representation Issues
B. The Appointment of Arbitrators
C. Arbitrator Practices and Ethics
D. The Language of the Arbitration
E. Consecutive day Hearings
F. Deadlines
G. Expedited Procedures in Smaller Cases`
H. Allocation of Expenses and Remuneration of Arbitrators
I. Miscellaneous Rules
IV. Differences Between Japanese and Western Commercial Dispute Resolution Practices
A. A Brief History of Legal Dispute Resolution in Japan
B. Japanese Contracting Practices
C. Japanese Notions of Commercial Justice
V. Conclusion
Chapter 5 Arbitration in Korea
I. Introduction
II. The Legal Framework for International Commercial Arbitration in Korea
A. Applicable Law
B. The Role of Courts with Respect to Arbitrations in Korea
C. Parallel Court and Arbitration Proceedings
D. The Form and Scope of Arbitration Agreements
E. The Scope of Arbitrable Claims
F. Choice of Law and the Permissibility of Lex Mercatoria or Equity
G. Selection of and Challenge to Arbitrators
H. Place and Language of Arbitration
I. Conduct of the Arbitration Proceedings
J. Issuance and Correction of the Arbitral Award
III. Arbitration Practice in Korea
A. KCAB Arbitration
B. Some Practical Considerations for Arbitration In Korea
IV. Enforcement and Setting Aside of Arbitral Awards
A. General Structure for Enforcement
B. Enforcement and Setting Aside Domestic Arbitral Awards
C. Enforcement of Foreign Arbitral Awards
D. Korean courts and the Enforcement of Arbitral Awards
Chapter 6 Dispute Resolution and Arbitration in Malaysia
I. Introduction
II. The Courts
A. Courts Jurisdiction
B. Alternative dispute Resolution and the Judicial Role in Settlement
III. A Historical Perspective on ADR and Arbitration
IV. Factors Encouraging the Use of Arbitration in Malaysia
V. The Conduct of Arbitration in Malaysia
A. Arbitration Under the Arbitration Act
B. Convention and Centre Arbitrations
VI. Incorporation of Mediation and Conciliation into Arbitral Proceedings
VII. Conclusion: Have Lawyers Caught on?
Chapter 7 Arbitration in the Philippines
I. Introduction
A. History of Arbitration in the Philippines
B. The Practice of Arbitration in the Philippines Today
C. Sources of Law
D. Traditional and Cultural Modes of Dispute Resolution in the Philippines
II. Choice of Philippine Law: Consequences for the Arbitration Agreement and Arbitrability of the Dispute
A. Arbitration Agreement: Intrinsic and Extrinsic Validity
B. Arbitrability of Disputes
III. The Philippines as the Place of Arbitration
A. Law Applicable to the Proceedings
B. Law Applicable to the Merits
IV. Consequences of Philippine Law as the Law Applicable to the Proceedings
A. Enforcement of the Arbitration Agreement
B. Establishment of the Arbitral Tribunal
C. Arbitration Proceedings Proper
D. The Arbitral Award
E. Participation of Foreign Lawyers
F. Fees
V. Enforcement and Execution of Arbitral Awards
A. Enforcement of Domestic Awards
B. Enforcement of Foreign Awards
C. Judicial Remedies Against Enforcement and Execution
D. Other Means of Judicial Interference and Review
VI. Conclusion
Chapter 8 Arbitration in Singapore
I. Introduction
II. Singapore as a Site for International Arbitration
A. Definition of International Arbitration
B. Singapore Courts' Role in Local Arbitration
C. Local Practice and Licensing Requirements for Foreign Lawyers
D. Arbitration Institutions
III. Arbitrability of Claims
IV. Arbitral Choice of Law, Lex Mercatoria and Amiable Composition
V. Arbitrator Ethics and Rules of Professional Responsibility
A. Ethics
B. Immunity
C. The Arbitrator as Conciliator
VI. Particular Features of Arbitration in Singapore
VII. Enforcement of Arbitral Awards
A. Awards Made in Singapore
B. Awards Made Outside Singapore
C. Enforcement of Arbitral Awards as Judgments
VIII. Conclusion
Chapter 9 Arbitration in Taiwan, Republic of China
I. Introduction
II. Taiwan's Legal and dispute Resolution Traditions
III. The Arbitration Law
A. The Arbitration Agreement
B. Institutional and Ad Hoc Arbitration
C. Formation of the Arbitral Tribunal
D. Arbitrability
E. Choice of Law in Arbitration Proceedings
F. Amiable Composition
G. Arbitration Proceedings
H. Interim Measures
I. Annulment of Arbitral Awards
IV. Using Taiwan as the Situs for an International Commercial Arbitration
A. The Enforceability Abroad of Awards Rendered in Taiwan
B. Costs
C. Logistics
D. Neutrality
E. Availability of Qualified Arbitrators
F. Availability of Foreign Counsel
G. Interference by Local Courts
V. The Enforcement of Arbitral Awards in Taiwan
VI. Conclusion: The Future of International Arbitration in Taiwan
Chapter 10 Arbitration in Thailand
I. Historical Background
II. In Court Arbitration
III. Out of Court Arbitration
A. Arbitration Agreement
B. Composition of the Arbitral Tribunal
C. Procedural Issues
D. Choice of Law
E. Arbitration Ex Aequo Et Bono
F. Arbitral Awards
G. Enforcement of Arbitral Awards
IV. Arbitration Institutions
A. The Office of the Arbitration Tribunal of the Board of Trade
B. The Arbitration Office of the Ministry of Justice
V. Conclusion
Chapter 11 Arbitration in Vietnam
I. Introduction
II. Commercial Dispute Resolution and Arbitration in Viet Nam Before
A. Background History
B. State Economic Arbitration
C. FTAC and MAC
III. Viet Nam's Arbitration Institutions and Regulations Since Doi Moi
A. The Viet Nam International Arbitration Centre (VIAC)
B. Economic Arbitration Centers (Domestic Cases Only)
IV. The Future of Commercial Arbitration in Viet Nam
V. Conclusion
Chapter 12 Rethinking the Role of Law and Contracts in East West Commercial Relationships
I. The Role of Law and Contracts in the Structure and Governance of Western Commercial Relationships
II. The Role of Law and Contracts in the Structure and Governance of Asian Commercial Relationships
A. The Traditional Role of Law in Asian Commercial Affairs
B. Traditional Asian Contracting Practices
C. Traditional Asian Dispute Resolution Practices
III. Accommodating Different Conceptions Regarding the Role of Law and Contracts in the Structure and Governance of Commercial Relationships
A. Rethinking International Commercial Arbitration
B. Rethinking Contractual Choice of Law
C. Rethinking East West Contract Terms
IV. Conclusion