ICC Arbitration in Indonesia
The International Court of Arbitration (“ICC Arbitration“) is the world’s leading arbitral institution. ICC Arbitration is known for resolving international commercial and business disputes, administering more than half of all arbitration disputes worldwide. ICC Arbitration is part of the International Chamber of Commerce (“ICC“). The court member of ICC Arbitration comprises more than 100 members from about 90 countries including Indonesia.
ICC Arbitration administers a wide range of disputes, including corporate and commercial, construction/engineering, insurance, intellectual property, banking, finance, and trade disputes.
ICC Indonesia is a National Committee of ICC. It is the representative of Indonesian business communities to the ICC. As one of its objectives, ICC Indonesia pledges to contribute to the pursuit of increasing international trading with buyers from foreign countries.
ICC Indonesia also has an arbitration committee, which aims to promote arbitration aspects or sectors where arbitration is used, and discuss how new practices, policies and legislative developments affect international arbitration and other dispute resolution services.
The parties must have an arbitration clause in their contract that states that any dispute arising out of or in connection with the contract must be settled through arbitration and administered by ICC Arbitration using ICC Arbitration Rules 2012 as amended in 2017 (“ICC Rules“). Under Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (“Arbitration Law“), the parties are prohibited to bring their dispute to the Indonesian courts and the Indonesian courts have no jurisdiction to hear the dispute if the parties are bound by an arbitration clause/agreement.
ICC Rules can be downloaded here.
Yes. The standard ICC Arbitration clause is as follows:
“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”
However, parties are free to adapt the clause to their particular circumstances. For instance, they may wish to stipulate the number of arbitrators, or the place and language of the arbitration, as well as the law applicable to reviewing the merits of the case.
To begin a proceeding, you need to submit a “Request for Arbitration” to the Secretariat of ICC Arbitration. This can be done through ICC Global Headquarters in Paris or our regional office in Hong Kong or Singapore. Although “Request for Arbitration” must be filed in Paris, Hong Kong or Singapore, the proceedings can be held in any country, including Indonesia.
There is no required or model form for a “Request for Arbitration”. A claimant is free to determine the form of its “Request for Arbitration” provided that Article 4 of the Rules is fulfilled. In practice, “Request for Arbitration” come in numerous styles and formats
Yes, it is possible. As stated in point 4, to commence arbitration proceedings under ICC Rules, parties should express it in their contract. Essentially, there are at least three things that must be specified in an arbitration agreement when parties wish to conduct arbitration in Indonesia using ICC Rules:
Seat of arbitration
The “seat” of the arbitration, in essence, is the legal jurisdiction to which the arbitration is tied. This tie to a certain location is significant as it will determine the procedure which governs the arbitration. For instance, if the parties choose Indonesia as the “seat” of arbitration, the Arbitration Law as the procedural law of arbitration in Indonesia should apply.
Venue of arbitration
The venue of the arbitration is the place where the hearings take place during the course of the arbitration. For instance, if the parties choose Indonesia as the “venue” of arbitration, they can conduct the hearing in a conference room in Indonesia.
Rules of arbitration
The rules of arbitration are a set of rules provided by an institution that will help parties in commencing arbitration. If the parties wish to use ICC Rules in conducting their arbitration, they should express that in their arbitration clause.
Yes, it can. The rules of arbitration chosen (in this case ICC Rules) need not be the same as the governing law of the contract. This means that even if the law governing the contract is Indonesian law, ICC Arbitration can still administer any dispute under that contract.
The parties can choose the language of the arbitration including Indonesian language. Article 20 of the ICC Rules provides that in the absence of an agreement by the parties, the arbitral tribunal will determine the language or languages of the arbitration, with due regard being given to all relevant circumstances, including the language of the contract.
The proceedings under ICC Arbitration will be administered by the Secretariat of ICC Arbitration together with the arbitral tribunal assigned for the dispute.
Under Article 31 of the ICC Rules, the time limit for the final award will initially be six months from the date of approval or last signature of the terms of reference. However, ICC Arbitration will, at the outset of a case, fix a time limit for the final award based upon the Arbitral Tribunal’s procedural timetable. ICC Arbitration can extend the time limit for the final award.
Yes, the expedited procedure in ICC Arbitration is governed under Appendix VI of the ICC Rules. The Expedited Procedure Provisions apply if:
- The arbitration agreement was concluded after 1 March 2017
- The amount in dispute does not exceed US$2,000,000
- The parties have not opted out of the Expedited Procedure Rules in the arbitration agreement or at any time thereafter.
The time limit within which the arbitral tribunal must render its final award is six months from the date of the case management conference, subject to an extension from ICC Arbitration.
Expedited Procedure Rules can be downloaded here.
Yes. If the award is a domestic award, the winning party must register the award with the registrar of the district court where the respondent is domiciled within 30 days after the award is rendered.
If the award is an international award, after the registration of the award, the winning party must file an application to obtain leave for enforcement (exequatur) before finally seeking the District Court’s assistance to enforce the award in Indonesia.
Yes, it can. The enforcement of arbitration awards is governed under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention“). The New York Convention allows the enforcement of an award to be done in one signatory country against assets located in another signatory country. This means, as long as the country is subject to New York Convention, the winning party can enforce the arbitration award that has been rendered in Indonesia.
The arbitrator acts as a private judge. He or she will hear the arguments from both parties and make a ruling that is binding on the parties.
Article 12 of the ICC Rules provides two options for arbitrators:
The parties nominate the sole arbitrator for confirmation by ICC Arbitration. If the parties fail to nominate a sole arbitrator within 30 days from the date when the claimant’s Request for Arbitration has been received by the other party, or within such additional time as may be allowed by the Secretariat of ICC Arbitration,the sole arbitrator shall be appointed by ICC Arbitration.
Each party should nominate in the Request for Arbitration and the Answer of the Request for Arbitration, one arbitrator for confirmation by ICC Arbitration, and the third arbitrator will be appointed by ICC Arbitration. If a party fails to nominate an arbitrator, the appointment will be made by ICC Arbitration.
ICC Arbitration use the advance on costs mechanism with the following aspects:
- A non-refundable filing fee of US$5,000, which is paid by a claimant when it files a “Request for Arbitration”.
- A provisional advance fixed by the Secretary General upon or soon after receipt of the “Request for Arbitration”, which is to be paid by claimant. The provisional advance is intended to cover the costs of arbitration until the “Terms of Reference” are completed or until the case management conference when the Expedited Procedure Provisions apply.
- The advance on costs fixed by ICC Arbitration. Usually, this is fixed soon after the “Answer of Request for Arbitration” or any counterclaims are filed—that is as soon as ICC Arbitration has sufficient information to fix it.
ICC Arbitration will fix the actual costs of the arbitration (i.e., ICC administrative expenses and arbitrators’ fees) at the end of the case. Those costs, as well as the arbitrators’ reimbursable expenses, will then be paid from the advance on costs. If there is any money left over, it will be reimbursed to the parties.
The arbitrators’ fees are fixed on the basis of the relevant scale found in Appendix III of the ICC Rules. ICC Arbitration take into consideration whether the procedure is expedited or not, the diligence of the arbitrators, time spent, rapidity of the proceedings and complexity of the dispute. Based on the amount in dispute, the scale provides a minimum and a maximum for one arbitrator.
Docdex is a specialized method when a dispute submitted is related to trade finance instruments. Essentially, Docdex is a document-based procedure leading to a decision by three experts resolving a dispute over a documentary credit, collection or demand guarantee.
No. Docdex decisions are not binding on the parties unless all of the parties expressly agree in writing that such findings will be contractually binding upon them. A Docdex decision is not an arbitral award.
The private judge in Docdex proceeding are appointed experts from a list maintained by the ICC banking commission (“Appointed Expert“). The list consists of experts having experience in, and knowledge of, trade finance transactions.
To apply for a Docdex decision, a claimant must file a claim using the provided form. The claim must be accompanied by the payment of the applicable filing fee. The ICC International Centre for ADR will determine whether the claim falls within the scope of the Docdex Rules and will, either reject the claim or notify the respondent of the claim.
Docdex proceedings do not provide for the oral examination of fact or expert witnesses or for oral submissions at a hearing. All communications and submissions in the proceedings are sent to or by the ICC International Centre for ADR. There are no direct communications between the parties and the Appointed Expert, whose identity remains confidential. All submissions in Docdex proceedings and all Docdex decisions are in English only.
Decisions are issued in English using the provided form. The Appointed Expert renders the decision exclusively on the basis of the claim; any answer and any supplement; the terms and conditions of the trade finance-related instrument, undertaking or agreement; the ICC banking rules that may be applicable; and international standard practice in trade finance.
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Disclaimer: The following questions and answers are provided for general information only and may not be completely accurate in every circumstance, do not purport to be legal advice, and are not intended to be legally binding in a particular case.