Indonesian center offers disputes settlement
Indonesian center offers disputes settlement
JAKARTA (JP): Companies with civil disputes can now turn to
the newly-established Alternative Dispute Resolution Center (ADR)
to settle their disputes.
The chairman of the Indonesian ADR, I Nyoman Moena, said
yesterday that in the near future companies with civil disputes
will not have to go to court or even arbitration agencies.
Instead, they will go to ADR centers.
"It become a worldwide trend now. Large multinational
companies prefer using ADR centers to courts or arbitration
agencies. It's because they follow a win-lose system," Moena told
The Jakarta Post.
He said once a large company brings a civil case to court it
puts its image at stake because people take a closer look at the
negative aspects of the company.
Besides, as legal analysts assert, most foreign investors do
not trust Indonesia's court system. Arbitration is seen as a more
definite and internationally recognized procedure.
Recognizing the trend, Indonesia became part of the
International Center for Settlement of Investment Disputes
Convention in 1968 and the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards in 1981.
In addition, Indonesia has established a formal national
arbitration agency called BANI.
BANI, however, is not regarded as a desirable option either
because the Indonesian arbitration system relies on enforcement
through the courts, which foreign investors try to avoid.
It has become obvious that the existence of reliable ADR
centers is necessary if Indonesia wants to actively participate
on a level playing field, Moena said.
"ADR centers follow a win-win concept by using instruments
like mediation, facilitation and conciliation. Companies will
only turn to arbitration agencies or even courts when they really
fail in the ADR centers," Moena said.
He added that settling business disputes through ADR centers
is no doubt less costly than litigation. More so when a dispute
is triggered by a petty problem.
"When it deals with a little amount of money, or different
interpretations of a word in a contract, it will be cost
efficient to settle it in ADR centers," Moena said.
The Indonesian ADR, established by a number of businesspeople
last December, will soon open its services later this month. It
plans to cooperate with ADR centers in other countries,
especially to handle disputes involving foreign companies.
With the establishment of the Indonesian ADR center, Moena
said, it is expected that business contracts between companies in
Indonesia will include a clause stating that they will use the
center to settle any disputes as a first alternative before going
to arbitration agencies or court. (rid)