The implementation of international arbitral awards in commercial relationships : a comparative legal study between Indonesia and Australia

Shahrullah, Rina Shahriyani (2005). The implementation of international arbitral awards in commercial relationships : a comparative legal study between Indonesia and Australia PhD Thesis, T.C. Beirne School of Law, The University of Queensland.

       
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Author Shahrullah, Rina Shahriyani
Thesis Title The implementation of international arbitral awards in commercial relationships : a comparative legal study between Indonesia and Australia
School, Centre or Institute T.C. Beirne School of Law
Institution The University of Queensland
Publication date 2005
Thesis type PhD Thesis
Supervisor Peter McDermott
Gabriel Moens
Total pages 509
Collection year 2005
Language eng
Subjects 180106 Comparative Law
Formatted abstract

This thesis examines whether the UNCITRAL Model Law on International Commercial Arbitration (hereafter referred to as the Model Law) should be adopted by Indonesia and incorporated into Indonesian arbitration law in order to facilitate the recognition and enforcement of international (foreign-rendered) arbitral awards in that country and to keep up with the modem trend ('the pro-enforcement approach') in the context of international commercial arbitration today.

The Model Law adopts the 'pro-enforcement approach' since it suggests that states adopting the Model Law should recognize and enforce international arbitral awards regardless of the country in which the awards are rendered. This approach constitutes 'the modem trend' in the context of international commercial arbitration because it facilitates the process of recognition and enforcement of international arbitral awards.

This thesis argues that although Law No.30 of 1999 (hereafter referred to as the New Indonesian Legislation) is relatively new legislation on arbitration in Indonesia; this New Legislation continues to fo1low the approaches of the previous arbitration Regulation (Supreme Court Regulation No.1 of 1990). Accordingly, the New Legislation has been drafted without regard to the Model Law which most countries now utilize. As a result, the process of recognition and enforcement of international (foreign-rendered) arbitral awards in Indonesia may not be compatible with the modem trend ('the pro-enforcement approach') in the context of international commercial arbitration today.

The refusals of the enforcement of the international (foreign-rendered) arbitral awards in Indonesia in Bankers Trust Company & Bankers Trust International Pic. v PT.Mayora Indah, Tbk.1 and in Bankers Trust Company & Bankers Trust International Pic. v PT.Jakarta International Hotel & Development, Tbk.2 and subsequently the annulment of international (foreign-arbitral) awards in Perusahaan Pertambangan Minyak dan Gas Bumi Negara & PT.PLN (Persero) v Karaha Bodas Company, L.L.C.3 have been criticized, and have damaged the reputation of that country in the world of international commercial arbitration.

The refusals and the annulment of the arbitral awards in those cases would not have occurred if the New Indonesian Legislation had adopted the Model Law because the Model Law facilitates the process of recognition and enforcement of international arbitral awards regardless of the country in which the awards are made. Hence, the view is expressed that the adoption of the Model Law by Indonesia would facilitate the recognition and enforcement of international (foreign-rendered) arbitral awards in that country.

It may be assumed that the adoption of the Model Law would not merely modernize the process of recognition and enforcement of international (foreign-rendered) arbitral awards in Indonesia. The insertion of the 'pro-enforcement approach' of the Model Law into Indonesian arbitration law would also modernize that country's arbitration law entirely since the Model Law governs the entire conduct of international commercial arbitration.

This thesis also expresses the view that the Model Law meets the contemporary needs of society since it facilitates the recognition and enforcement of international arbitral awards irrespective of the country where the awards are made. This approach justifies the incorporation of the Model Law in Australia by an amendment of the International Arbitration Act 1974 (Cth) in 1989. However, the 'opting-out' provision of the Model Law provided by the Act, may give rise to a number of complications in relation to the process of recognition and enforcement of international arbitral awards in that country. This is because apart from the Model Law, there is no other statutory procedure under the Act for such recognition and enforcement. In this particular circumstance, the Australian domestic arbitration laws may fill the lacuna. Yet, this approach may give rise to complications since 'purely domestic arbitration regime’ intervenes the jurisdiction of 'international arbitration’; consequently the distinction between the two types of arbitration may be difficult to draw.

The conclusion in this thesis is that the Model Law should be adopted by Indonesia and incorporated into Indonesian arbitration law to reform this area of law in that country. This would keep up with developments in business and trade both nationally and internationally and developments in law in general. In this regard, Indonesian arbitration law should adopt the Model Law in a similar manner to Australian arbitration law. However, to avoid complications experienced by arbitration law of Australia, the view is put forward that Indonesia should not permit the opting out of the Model Law. 

Keyword International commercial arbitration
Arbitration agreements, Commercial -- Australia
Arbitration agreements, Commercial -- Indonesia

Document type: Thesis
Collection: UQ Theses (RHD) - UQ staff and students only
 
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Created: Mon, 20 May 2013, 11:26:30 EST by Mr Lachlan Wong on behalf of Scholarly Communication and Digitisation Service