Feb 07, 2016

While Indonesia is a signatory to the 1958 United Nations Convention on Foreign Arbitral Awards ("the New York Convention"), obtaining an award is only the first step in a series of processes to obtain enforcement in the Republic of Indonesia.

Further steps are necessary within Indonesia.

Firstly, the foreign arbitral award must be registered with the Central Jakarta District Court. It needs to be accompanied by powers of attorney from the registering party and the tribunal.

Secondly, an application is then made to the Chairman of the Central Jakarta District Court for a "fiat exequatur" or enforcement order.

Thirdly, once the fiat exequatur has been issued by the Chairman, an application is then made for notification to the parties.

A number of obstacles may arise.

Ambiguity on classification

The determination of the category of the arbitral award ought be based on a territorial view of the seat of arbitration, however the application within Indonesia may differ where a "foreign" seat of arbitration may mask a determination of what is in fact a domestic dispute, or a dispute with particularly Indonesian characteristics - eg the case of PT Lirik Petroleum v PT Pertamina (persero) and PT Pertamina EP.

Delay

Lack of Clarity on the Definition of Public Order

The lack of clear definition of 'public order' has created several problems, as has occurred in several other national jurisdictions. Also there is no clear time limit for the issue of the exquatur.

Parallel Litigation

Commencement of parallel litigation or court proceedings often hinders the enforcement of an international arbitral award, causing the Indonesian Court to be reluctant to enforce.

However, Indonesia does not acknowledge decisions of foreign court judgments and, like Australia, is not a party to the 2005 Hague Convention on Choice of Court Agreements.

Indonesia does respect choice of law in contract and permit foreign lawyers to present before the Court as expert witnesses.

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