Alternate Dispute Resolution Law at Indonesia

Indonesia has a comprehensive legal framework for Alternative Dispute Resolution (ADR), encompassing arbitration, mediation, and consumer dispute resolution. Here's an overview of the key legal structures and practices:

1. Arbitration in Indonesia

Arbitration in Indonesia is primarily governed by the Arbitration and Alternative Dispute Resolution Law (Law No. 30 of 1999). This law aligns with international standards and provides a legal framework for resolving disputes outside the courts. Key provisions include:

Arbitration Agreement: Parties must agree to submit disputes to arbitration, and the agreement must be in writing.

Arbitral Awards: Awards are binding and can be enforced through the District Court.

Arbitration Institutions: The Indonesian National Board of Arbitration (BANI) is a prominent institution administering arbitration proceedings.

Arbitration is commonly used in commercial disputes, including those related to contracts, construction, and investment.

2. Mediation in Indonesia

Mediation is recognized as a voluntary ADR method in Indonesia. The Supreme Court Regulation No. 1 of 2016 mandates that courts offer mediation services for civil disputes. If mediation fails, the case proceeds to trial. Mediators are typically judges or court-appointed professionals trained in dispute resolution.

Outside the judiciary, various institutions and private organizations offer mediation services, particularly in family, labor, and commercial disputes.

3. Consumer Dispute Resolution

In line with the Consumer Protection Law (Law No. 8 of 1999), Indonesia provides mechanisms for resolving consumer disputes:

Consumer Dispute Settlement Agency (BPSK): Established at the district level, BPSK facilitates the settlement of consumer disputes through mediation and conciliation.

Consumer Protection Committees: These committees assist in resolving disputes and protecting consumer rights.

Additionally, Indonesia is a member of the ASEAN Consumer Protection Cooperation, which promotes regional cooperation in consumer protection and dispute resolution.

4. Other ADR Mechanisms

Indonesia also recognizes other ADR methods:

Negotiation: Informal discussions between parties to reach a mutually acceptable agreement.

Conciliation: A process where a neutral third party assists the disputing parties in reaching an agreement.

These methods are often used in conjunction with arbitration and mediation to resolve disputes efficiently.

Summary Table

ADR MethodGoverning Law/RegulationApplicabilityKey Features
ArbitrationLaw No. 30 of 1999Civil and commercial disputesBinding awards; administered by institutions like BANI
MediationSupreme Court Regulation No. 1 of 2016Voluntary in civil disputesCourt-mandated in civil cases; mediators are trained professionals
Consumer ADR (BPSK)Law No. 8 of 1999Consumer disputes with tradersMediation and conciliation services at the district level
NegotiationInformal processAll types of disputesFlexible and informal; parties have full control over the outcome
ConciliationInformal processVarious disputesNeutral third party assists in reaching an agreement

Indonesia's ADR landscape is diverse, offering various mechanisms tailored to different types of disputes. While arbitration and mediation are widely used, consumer disputes have specific legal frameworks to ensure fair and accessible resolution processes.

 

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