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)