Indonesia is one of the countries that recognizes and adheres to international agreements, including the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereinafter referred to as the 1958 New York Convention). Indonesia’s recognition and acceptance of the 1958 New York Convention is reflected in the enactment of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (hereinafter referred to as the Arbitration Law). With the enactment of the Arbitration Law, verdict in cases examined and ruled upon by international arbitration institutions can be enforced in Indonesia.
The definition of an International Arbitration Award, as explained in Article 1, paragraph 99 of the Arbitration Law, which has been amended through Constitutional Court Decision No. 100/PUU-XXII/2024, implies that:
“ An award rendered by an arbitral institution or an individual arbitrator outside the jurisdiction of the Republic of Indonesia, or an award by an arbitral institution or an individual arbitrator that, under the provisions of Indonesian law, is deemed an international arbitration award. “
To enforce an International Arbitral Award within the legal jurisdiction of the Republic of Indonesia, recognition is required, which falls under the authority of the Central Jakarta District Court, as mandated by Article 65 of the Arbitration Law, which states:
“An international arbitral award may be enforced in Indonesia after obtaining an exequatur from the Chief of the Central Jakarta District Court.”
The “exequatur” referred is a legal document issued by a sovereign authority to permit the enforcement of rights within its jurisdiction. The term exequatur originates from the Latin word “exequatur,” meaning “let it be executed.” Accordingly, the recognition granted in the form of an exequatur by the court within the legal jurisdiction of the Republic of Indonesia implies that the International Arbitration Award is valid and binding on the parties involved in a specific legal relationship, whether contractual or otherwise, regarding a matter that has been resolved through arbitration.
It should also be noted that an International Arbitration Award can actually be enforced in Indonesia from the moment it is issued, without requiring an exequatur from the Central Jakarta District Court, provided that the party obligated under the award acts in good faith and voluntarily complies with it. However, if the obligated party refuses to fulfill its obligations voluntarily, an exequatur from the Central Jakarta District Court is required as the legal basis for executing assets to enforce compliance with the International Arbitration Award.
Procedure for Obtaining an Exequatur for an International Arbitration Award
As previously explained, in order to enforce an International Arbitration Award, prior recognition in the form of an exequatur is required. According to Article 66 of the Arbitration Law, the requirements for an International Arbitration Award to be enforced within the jurisdiction of the Republic of Indonesia are as follows:
Procedure for Obtaining an Exequatur for an International Arbitration Award
As previously explained, in order to enforce an International Arbitration Award, prior recognition in the form of an exequatur is required. According to Article 66 of the Arbitration Law, the requirements for an International Arbitration Award to be enforced within the jurisdiction of the Republic of Indonesia are as follows:
- The International Arbitration Award must have been issued by an arbitrator or an arbitral tribunal in a country that is bound by a treaty with Indonesia, whether bilateral or multilateral, regarding the recognition and enforcement of International Arbitration Awards.
- The International Arbitration Award, as referred to in Article 66(a) of the Arbitration Law, is limited to awards that fall within the scope of commercial law under Indonesian legal provisions.
- The International Arbitration Award, as referred to in Article 66(a) of the Arbitration Law, may only be enforced in Indonesia if it does not contradict public order. While the phrase “Public Order” is not explicitly defined in the Arbitration Law, Yahya M. Harahap explains in his book that:
- “ A matter is considered contrary to public order within a given environment (country) if it contains elements or circumstances that conflict with the fundamental principles and core values of the legal system and national interests of a nation.”
- The International Arbitration Award may be enforced in Indonesia only after obtaining an exequatur from the Chief Judge of the Central Jakarta District Court.
- If the International Arbitration Award, as referred to in Article 66(a) of the Arbitration Law, involves the Republic of Indonesia as one of the disputing parties, it may only be enforced after obtaining an exequatur from the Supreme Court of the Republic of Indonesia, which will then be delegated to the Central Jakarta District Court.
Pleading for an Exequatur
Once the above-mentioned requirements have been met, the application for an exequatur determination by the Central Jakarta District Court can be submitted through several stages, as stipulated in Article 7 of Supreme Court Regulation (Perma) No. 3 of 2023 in conjunction with Article 5 paragraphs (1), (2), and (3) of Perma No. 1 of 1990, as follows:
- An application for the enforcement of a Foreign Arbitration Award may only be submitted after it has been registered (deposited) with the Registrar’s Office of the Central Jakarta District Court, in accordance with the applicable procedures under Article 377 of the Indonesian Regulation on Civil Procedure (HIR)/Article 705 of the Regulation for Regions Outside Java and Madura (RBg).
- The Chief Judge of the Central Jakarta District Court, as referred to in paragraph (1), shall forward the application documents for the enforcement of the Foreign Arbitration Award to the Registrar/Secretary General of the Supreme Court to obtain an exequatur.
- The submission of the application documents to the Supreme Court must be completed within a maximum period of 14 (fourteen) days from the date the application is received.
However, it is important to note that if the International Arbitration Award involves the Republic of Indonesia as one of the parties, based on Article 66(e) of the Arbitration Law, the award can only be enforced after obtaining an exequatur from the Supreme Court, which is then delegated to the Central Jakarta District Court.
If the Chief Judge of the Central Jakarta District Court refuses to issue an exequatur or does not recognize an International Arbitration Award, an appeal (cassation) may be filed with the Supreme Court based on Article 68 paragraph (2) of the Arbitration Law in conjunction with Article 16 paragraph (5) and Article 21 of Perma No. 3 of 2023.
Conversely, if the Chief Judge of the Central Jakarta District Court recognizes and enforces the International Arbitration Award by issuing an exequatur, then, based on Article 16 paragraph (5) of Perma No. 3 of 2023, the exequatur shall be recorded on the original and authentic copies of the International Arbitration Award. Furthermore, pursuant to Article 68 paragraph (1) of the Arbitration Law, no appeal or cassation may be filed against the decision of the Chief Judge of the Central Jakarta District Court granting the exequatur.
Once the International Arbitration Award has been recognized by the Chief Judge of the Central Jakarta District Court, an execution order will be issued, with its enforcement delegated to the District Court that has relative jurisdiction to carry it out.
Execution of an International Arbitration Award
Furthermore, there are several technical requirements for filing the registration and submission of the application documents, as stipulated in Article 18 of Supreme Court Regulation (Perma) No. 3 of 2023 in conjunction with Article IV paragraph (1) of the New York Convention, Article 67 paragraph (2) of the Arbitration Law, and Article 5 paragraph (4) of Perma No. 1/1990. The submission of application documents must be accompanied by:
- The original or an authenticated copy of the Foreign Arbitration Award, in accordance with the authentication requirements for foreign documents, along with its official translation, as required under Indonesian law.
- The original or an authenticated copy of the agreement that forms the basis of the Foreign Arbitration Award, in accordance with the authentication requirements for foreign documents, along with its official translation, as required under Indonesian law.
- A statement from the Indonesian diplomatic representative in the country where the Foreign Arbitration Award was issued, confirming that the applicant’s country is either bilaterally bound with Indonesia or jointly bound with Indonesia under an international convention on the recognition and enforcement of foreign arbitration awards.
Based on Article 69 of the Arbitration Law, after the Chief Judge of the Central Jakarta District Court issues an execution order for a legally binding international arbitration award, the subsequent execution is delegated to the Chief Judge of the District Court that has relative jurisdiction to enforce it.