The Issue Of Arbitral Award Enforcement in Indonesia

Abstract

International arbitration has been significantly growing in many countries. This dispute settlmement mechanism has been pursued in cases not only between companies, but also between investors and State. Despite that, the enforcement of arbitral awards can be problematic. In Indonesia, both domestic and foreign arbitral awards must be enforced through the national court. In this regard, the Indonesian law that governs arbitration allows the annulment of arbitral award if it contradicts public order. However, the definition of public order is quite unclear and provides loophole that leads to its misapplication. Numerous arbitral awards in Indonesia are annulled based on public order grounds. As such, there is a need for countries, particularly Indonesia, to provide certainty for parties of arbitration in enforcing arbitral awards that have been rendered.