indonesia arbitration - Bani

agreement. Furthermore, the article also provides that the arbitration which has
been chosen by the parties shall be executed in accordance to the rules and procedures
of such designated, except otherwise agreed by the parties. 9
Article 1 provides that the parties are free in determining the arbitration procedures
to be applied in hearing the dispute, and put it in an explicit written
agreement. This article provides that the procedure may not conflict with the
provisions of Arbitration Law. The next paragraphs and 4 stipulate that in case
the parties do not decided the procedure to be applied by them then the arbitrator
or the arbitrator tribunal will decide it for the parties based on this law. After
the parties have agreed on it, the parties should determine the venue of that
arbitration. If the parties do not determine that venue, the arbitrator or arbitral
tribunal will determine it on behalf of the parties. 10
Article 4 and 1 confirms that Indonesia also applies the party autonomy in
selection of the governing law in arbitration. Under this provision, the parties
may choose any other institution that they think the best for them to settle their
disputes, while textual interpretation of the Article 4 paragraph 1 confirms that
the parties are free to choose the law governing their arbitration proceeding.
Usually the arbitration institution has their own arbitration sets of procedural
law, and if the parties have agreed to submit their case to solve that institution,
the parties mostly used that procedural law to govern their dispute. 11 Moreover,
Article 7 paragraph provides that the examination of the witness before the
arbitrator or arbitral tribunal shall be carried out in accordance with the provisions
in the procedure of Civil Code.
Regarding the Ad-hoc Arbitration, Indonesian’s Arbitration Law stipulates that
it is the right of the parties to apply any rules governing their arbitration as long
as the disputing parties agreed upon. Indonesian Arbitration Regulation also
provides default procedural law apply of no other rules have been designated.
In practice, there are some companies that settle their dispute by using the adhoc
arbitration besides using the national or international arbitration institution.
The Ad-hoc arbitration in this case will adopt its own rules governing the
arbitration proceeding. And the adoption of rules in the ad-hoc arbitration in
this case based on the agreement of the parties. The rules used for the arbitra-
9 See Arbitration Law; article 4 paragraphs and 2.
0 See Arbitration Law, article paragraphs , 2, and .
For example the parties choose the ICC Court of the arbitration, then based on ICC rules,
the parties can use the ICC Rules to govern their dispute. See supra, International law in
determining the law governing the arbitration procedure, p. 5.
INDONESIA ARBITRATION - Quarterly Newsletter No. 4/2008
Law Governing Arbitration Proceedings