Key Points in the Revision of the Arbitration Law

The government has initiated a series of revisions to Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution ("Law 30/1999"). The academic manuscript has been completed.

“The academic manuscript was finalized in 2024,” a government source told hukumonline.com. However, the commencement of the draft discussion will fall under the authority of the Directorate General of Legislation of the Ministry of Law.

The document consists of six chapters. The regulatory amendment aims to establish arbitration and alternative dispute resolution mechanisms in trade and investment while ensuring legal certainty. This is intended to support Indonesia's business climate.

Several key regulatory directions include:

• Adjusting the scope of international arbitration rulings based on United Nations Commission on International Trade Law (UNCITRAL) provisions.

• Developing online dispute resolution mechanisms in arbitration and alternative dispute resolution to meet public demand for faster digital dispute resolution.

• Establishing regulations for foreign arbitrators chosen by Indonesian or foreign businesses in investment or international trade disputes in Indonesia.

• Addressing the need for Micro, Small, and Medium Enterprises (MSMEs) to have access to simpler, faster, and more cost-effective arbitration through single-arbitrator mechanisms and document-based review agreements.

• Defining administrative correction limitations to ensure corrections do not alter the substance of rulings, thus providing legal certainty.

• Setting limits on public order interpretations to prevent varied court rulings.

• Aligning with Constitutional Court Decision No. 15/PUU-XII/2014, which invalidated the explanation of Article 70 on arbitration award annulments.