Arbitration Update on Supreme Court Regulation No. 3/2023

Updated Procedures on the Appointment of Arbitrators and the Registration of Arbitral Awards under Supreme Court Regulation No. 3 of 2023

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The Indonesian Supreme Court has finally introduced an implementing regulation for Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (“Arbitration Law“), after more than two decades. This comes in the form of Supreme Court Regulation No. 3 of 2023 on the Appointment of Arbitrators by the Court, Rights of Refusal, Examination of Enforcement Applications, and Arbitral Award Annulment (“Supreme Court Regulation”).

While the Supreme Court Regulation introduces provisions on several matters, in this article, we will discuss the updates on procedures for the Appointment of Arbitrators and Right of Refusal and the registration of Arbitral Awards.

Appointment of Arbitrators and Right of Refusal

Under Supreme Court Regulation, if disputing parties are unable to reach a consensus on the appointment of an arbitrator, they may submit an application to the District Court to request the appointment of an arbitrator or a panel of arbitrators.[1]

The Chief of the District Court appoints the arbitrator or arbitration panel no later than 14 (fourteen) calendar days after the application is submitted by issuing a decree.[2]

The disputing parties may exercise the right of refusal by submitting an application to the District Court no later than 14 (fourteen) days from the issuance of the decree, explaining sufficient grounds and providing authentic evidence of doubt regarding the arbitrator’s impartiality and potential bias in rendering decisions.[3]

The right of refusal against an Arbiter can be exercised if there is proven to be a familial, financial, or employment relationship with one of the parties or their representatives.[4]

In the event the right of refusal submitted by one party is not agreed upon by the other party and the concerned Arbitrator is unwilling to resign, the parties may file a claim in the form of an application to the Chief of the District Court.[5] The Chief of the District Court will hear the parties along with the reasons for the disagreement[6] and will render a decision on the application no later than 14 (fourteen) days after receiving the application.[7] No legal recourse can be taken against this decision.[8]

Registration of Arbitral Awards

Domestic Arbitral Awards

In addition to the existing provisions outlined in the Arbitration Law, the Supreme Court Regulation on Domestic Arbitration introduces the following procedures:

Domestic Arbitral Awards can be electronically registered through the Court Information System (Sistem Informasi Pengadilan or “SIP”);[9]
The Court Registrar shall process submitted Awards registrations within 3 (three) calendar days of their submission;[10]
In cases where the Arbitrator is appointed by an Arbitration Institution, the registration of the Domestic Arbitral Award is to be executed by the management of the Arbitration Institution or their authorized representative;[11] and
The registration of the Domestic Arbitral Award must be accompanied by documentary evidence of the notification of the decision to the disputing parties.[12]

International Arbitral Awards

The Supreme Court Regulation stipulates significant developments in the procedure for International Arbitral Awards, as follows:

International Arbitral Awards can be electronically registered through the Court Information System;[13]
The Court Registrar shall process submitted Award registrations within 14 (fourteen) calendar days of the complete submission of the required documents;[14]
In cases where the Arbitrator is appointed by an International Arbitration Institution, the registration of the International Arbitral Award is to be executed by the management of the International Arbitration Institution or their authorized representative;[15]
No deadline is set for the periods of International Arbitral Award registration.[16]

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[1] Article 4 Paragraph (1) Supreme Court Regulation

[2] Article 4 Paragraph (3) Supreme Court Regulation

[3] Article 4 Paragraph (4) Supreme Court Regulation

[4] Article 4 Paragraph (5) Supreme Court Regulation

[5] Article 5 Paragraph (1) Supreme Court Regulation

[6] Article 5 Paragraph (2) Supreme Court Regulation

[7] Article 5 Paragraph (3) Supreme Court Regulation