The Issuance of the Supreme Court Regulation No. 3 of 2023 An Assessment of How It Would Promote Arbitration in Indonesia ( Part 1)

by Eva Fauziah & Sri Purnama. Originally published in the Indian Journal of Arbitration Law (IJAL), an open-access student journal. with title “The Issuance of the Supreme Court Regulation No. 3 of 2023: An Assessment of Its Impact on Promoting Arbitration in Indonesia.” Indian Journal of Arbitration Law, 12(2), pp. 100-126.

In the realm of dispute resolution, arbitration has emerged as a compelling alternative to traditional litigation. It offers a streamlined process, allowing parties to tailor the resolution to their specific needs while maintaining confidentiality. This is particularly crucial in business disputes where sensitive information and relationships are at stake.

Indonesia, like many countries, has recognized the value of arbitration and established a legal framework to govern its practice. The Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution (AADR Law) has been the cornerstone of arbitration in the country. However, over two decades have passed since its enactment, and the law has remained largely unchanged.

The global landscape of arbitration has evolved significantly during this time, with new practices and standards emerging. This has created a disconnect between the AADR Law and the contemporary needs of arbitration in Indonesia. While the law still functions, its lack of alignment with modern practices poses challenges, particularly in disputes involving international parties.

The Supreme Court of Indonesia has recognized this issue and taken a significant step towards modernization. The Supreme Court Regulation Number 3 of 2023 (SCR 3/2023) introduces new provisions aimed at filling the gaps in the AADR Law and aligning Indonesian arbitration practices with international standards. This regulation addresses procedural aspects such as the appointment of arbitrators, rights of recusal, and the examination of enforcement and annulment of arbitral awards.

This article series delves into the intricacies of SCR 3/2023, analyzing its potential to promote arbitration in Indonesia. It explores the historical context and evolution of arbitration in the country, highlighting the limitations of the AADR Law and the need for reform. The subsequent articles will examine the key features of SCR 3/2023, assess its impact on arbitration practices, and offer critical insights and recommendations for further improvement.

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Sri Purnama

Junior Legal Research Analyst

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