Arbitration In Indonesian Cement-Free Concrete Demonstration Plants
1. Legal Framework for Arbitration in Indonesia
Governing Law:
Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution regulates arbitration in Indonesia.
Arbitration applies if parties have a valid written arbitration agreement.
Badan Arbitrase Nasional Indonesia (BANI) is the main domestic arbitration institution, but parties can also choose international arbitration bodies like ICC or SIAC.
Key Features:
Arbitration awards are final and binding.
Court intervention is limited to enforcement or annulment.
Annulment is possible only on statutory grounds:
Fraud
Arbitrator exceeding authority
Violation of public policy
Procedural irregularity
Foreign arbitration awards are enforceable under the New York Convention.
2. Arbitration in Cement-Free Concrete Demonstration Plants
Disputes may arise in cement-free concrete demonstration plant projects, which often involve:
Design, construction, and commissioning of pilot plants for alternative concrete technologies.
Supply of specialized materials (geopolymers, industrial by-products, or other binders).
Performance guarantees for strength, durability, and environmental compliance.
Licensing and IP rights for innovative concrete formulations.
Payment disputes, cost overruns, or delays in plant commissioning.
Integration of laboratory testing, automation, and quality control systems.
Environmental and regulatory compliance, including emission and waste management.
Why Arbitration is Preferred:
Technical complexity: Arbitration panels can include civil engineers, materials scientists, and process engineers.
High-value projects: Arbitration allows faster resolution for costly demonstration plants.
Confidentiality: Protects proprietary technology and industrial processes.
3. Arbitration Process in Indonesia
Step-by-Step Process:
Invoke Arbitration Clause: Parties submit disputes to arbitration.
Arbitrator Appointment: Parties select arbitrators, or BANI appoints them.
Hearing & Evidence: Parties submit technical reports, testing data, and expert testimony.
Award Issuance: Tribunal issues a binding arbitration award.
Registration for Enforcement: Award is registered at the District Court.
Annulment Option: Courts may annul awards only under statutory grounds.
Advantages for Cement-Free Concrete Demonstration Plants:
Arbitrators with technical expertise can evaluate concrete mix performance and plant processes.
Flexibility for site inspections and laboratory testing.
Confidential resolution protects proprietary concrete formulations and process innovations.
4. Indonesian Arbitration Case Law Examples
Below are six (6) Supreme Court cases relevant to arbitration enforcement, annulment, and technical/industrial project disputes:
Case 1 — MA No. 543 K/TUN/2025
Issue: Enforcement of arbitration award involving a government entity.
Relevance: Confirms enforceability of arbitration awards in industrial and infrastructure projects.
Case 2 — MA No. 901 B/Pdt.Sus-Arbt/2025
Issue: Recognition of a BANI arbitration award.
Relevance: Demonstrates judicial respect for domestic arbitration awards in technical and industrial disputes.
Case 3 — MA No. 355 B/Pdt.Sus-Arbt/2025
Issue: Registration and procedural compliance.
Relevance: Highlights importance of procedural correctness for enforcement of complex technical contracts.
Case 4 — MA No. 1218 B/Pdt.Sus-Arbt/2024
Issue: Industrial supply and service contract dispute.
Relevance: Confirms awards are enforced if arbitrators act within authority, applicable to demonstration plant projects.
Case 5 — MA No. 142 B/Pdt.Sus-Arbt/2025
Issue: Dispute over industrial equipment supply and service obligations.
Relevance: Analogous to disputes over concrete mixers, automation systems, and process equipment.
Case 6 — MA No. 1212 B/Pdt.Sus-Arbt/2023
Issue: Petition to annul an arbitration award.
Relevance: Reinforces that annulment is limited to statutory grounds: fraud, exceeding authority, or public policy violation.
Additional Reference — MA No. 941 B/Pdt.Sus-Arbt/2024
Issue: Alleged fraud affecting arbitration award.
Relevance: Shows judicial scrutiny of procedural fairness, particularly important for projects involving proprietary industrial technology.
5. Special Considerations for Cement-Free Concrete Demonstration Plants
Technical Performance: Arbitration may evaluate whether concrete mixes meet strength, durability, and sustainability specifications.
Intellectual Property & Licensing: Protection of proprietary formulations and industrial processes.
Regulatory Compliance: Panels may review environmental permits, waste handling, and safety protocols.
Delay & Cost Disputes: Arbitration resolves disputes over plant commissioning, milestone payments, and cost overruns.
Site Inspections & Testing: Arbitrators may conduct plant inspections or witness laboratory testing.
6. Enforcement and Annulment Principles
Enforcement: Registered awards are treated as final court judgments.
Annulment Grounds:
Fraud in obtaining the award.
Arbitrator exceeded authority.
Award violates public policy.
Procedural irregularities.
Foreign Awards: Must comply with the New York Convention and Indonesian public policy.
7. Key Takeaways
Arbitration is well-suited for high-value, technically complex industrial demonstration projects, such as cement-free concrete plants.
Law No. 30/1999 and BANI rules provide a structured framework.
Courts generally enforce arbitration awards, intervening only on narrow statutory grounds.
Supreme Court cases (MA Nos. 543 K/TUN/2025, 901 B/Pdt.Sus-Arbt/2025, 355 B/Pdt.Sus-Arbt/2025, 1218 B/Pdt.Sus-Arbt/2024, 142 B/Pdt.Sus-Arbt/2025, 1212 B/Pdt.Sus-Arbt/2023, 941 B/Pdt.Sus-Arbt/2024) illustrate enforcement, annulment limits, and procedural expectations.
RELATED Blog
comments