Alternative Dispute Resolution (ADR), according to Ros Angesti Anas Kapindha, Salvatia Dwi M, and Winda Rizky Febrina, “Efektivitas dan Efisiensi Alternative Dispute Resolution (ADR) Sebagai Salah Satu Penyelesaian Sengketa Bisnis Di Indonesia”/ “Effectiveness and Efficiency of Alternative Dispute Resolution (ADR) as one of the Business Dispute Resolution in Indonesia”, is the means of dispute resolution outside of the litigation scope. In ADR, some resolutions might be performed in the actions of :
- Consultation
- Negotiation
- Mediation
- Conciliation
- Arbitration
- Good offices
- Mini Trial
- Summary Jury Trial
- Rent a Judge
- Med Arb.
Jacqueline M. Nolan-Haley in her book “Alternative Dispute Resolution in A Nutshell” also explains that ADR is an umbrella term which refers generally to alternatives to court adjudication of dispute such as negotiation, mediation, arbitration, mini trial and summary jury trial.
In the Law of Indonesia No. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution, ADR are classified as : consultation, negotiation, mediation, conciliation or expert assessment. The definition itself from the Law is : ways of dispute resolution outside the scope of general judiciary based on the arbitration agreement made in written by the disputing parties.
ARBITRATION
The Arbitration Law also recognizes both domestic and foreign arbitration processes as the execution and enforcement of foreign arbitral award should be in accordance to the Indonesian law jurisdiction. Based on the current regulated law arbitration can only apply to private disputes, such as : disputes on commercial relation or other subjects that are fully determined by the parties as the main value of arbitration is based on the nature of mutual consent. Mutual consent of the parties may determine the arbitration location, venue, appointed arbitrators and the governing law.
The Arbitration Law regulates the process as follow :
- Appointment of arbitrators by the parties
- Confidentiality of the proceedings
- Final and binding nature of the arbitral award
The complete procedure of Arbitration procedures in Indonesia can be found under the Chapter III and IV of Arbitration Law No. 30 of 1999.
Whilst the execution and enforcement of the foreign arbitral award require a court order in Indonesia, either party may also submit for annulment petition of the award based on the law No. 30 of 1999 and Decision of Constitutional Court No. 15/PUU-XII/2014.
NEGOTIATION
Negotiation, though not explicitly stated, Article 6 of Law No. 30 of 1999, defines negotiation as direct meeting between the disputing parties to reach mutual agreement on settlement or dispute resolution as the objective. Further process of negotiation should be concluded with a written agreement between the parties. The agreement shall be binding to both parties and serves as the “law” between them based on the principle of pacta sund servanda where agreements shall be binding and considered as law by the contractually binding parties.
MEDIATION & CONCILIATION
Article 6 of Law No. 30 of 1999 governs mediation as the action to be taken after the disputing parties fail to reach a mutual agreement through negotiation. The idea of mediation is to settle the dispute through a neutral third party that will be known as a mediator. However, the mediator shall not obtain any power upon decision during the mediation process. The mediator will be expected to persuade the disputing parties to reach a mutual agreement and its role is mainly to accommodate the disputing parties to settle their dispute resolution outside of the scope of judicial courts. The difference between mediation and conciliation is that, though settlement is found through a neutral third party, the conciliator shall be expected to actively persuade the disputing parties as well as providing advices and opinions based on the condition and situation of the dispute. Conciliator, based on the governed regulated law, may also summon witnesses or expert witnesses to attend the conciliation hearing.
As negotiation, mediation and conciliation shall also express its result in written agreement between the parties, in which shall make the resolution of mediation binding and final for the parties. Shall either ways fail to facilitate the dispute resolution, the parties shall be allowed to perform other settlement actions, either by litigation or arbitration. In conciliation, an additional document is that, issued by the conciliator is known as recommendation which may be approved or rejected by the parties.
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ENFORCEMENT OF INTERNATIONAL ARBITRAL AWARD
The Country has not fully adopted the UNCITRAL Model Law regarding the enforcement of alternative dispute resolution in Indonesia. However, some of the articles are still considered to be directed under the provisions of UNCITRAL Model Law. Then what would happen to an international arbitral award that recognizes either or all the disputing parties as Indonesian Law Subject?
The International Arbitral Award are considered not of national arbitration product when the performance of settlement and resolution performed overseas / outside the jurisdiction of Indonesia. The International Arbitral Award may be enforced in Indonesia only after obtaining an exequatur (an official authorization, permitting execution) from the Chief Judge of the Jakarta Pusat District Court (“JPDC”) and the award must be enforced and not against the governed regulated law of Indonesia. If Republic of Indonesia is as one of the disputing party, then the award may only be enforced after acquiring an exequatur from the Supreme Court of the Republic of Indonesia which will then be delegated to JPDC.
The process of enforcement shall further follow the steps and requirements based on the Registrar Office of JPDC.