Insights / Updates

Stay up to date with legal developments in Indonesia.

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Recognition and Support for Arbitration under Indonesian Law

Alternative dispute resolution ("ADR") has been long recognised and practiced in Indonesia. The promulgation of the Indonesian Arbitration Law has encouraged the business community to increase the use of arbitration over other dispute resolution options. The legislative framework and the growing trend towards arbitration as an ADR option has resulted in the development of reliable and professional arbitration firms in Indonesia. 

In this Update, we examine the framework of arbitration in Indonesia with reference to the: 

  1. applicable legislation;
  2. timeframe for arbitration;
  3. involvement of the courts;
  4. types of disputes that may be resolved by arbitration; and
  5. arbitration institutions within Indonesia.
Restorative Justice Gaining Support in AGO's New Regulation

The Attorney General's Office ("AGO") recently enacted the Attorney General's Regulation No. 15 of 2020 on the Discontinuation of Prosecution based on Restorative Justice (“Regulation 15 of 2020”). Before this, the Indonesian National Police has already adopted the concept of restorative justice through the Criminal Investigation Regulation (Chief of Police Regulation No. 6 of 2019), but its application was limited to only the investigation stage.

Regulation 15 of 2020 takes the concept further by also allowing a prosecution to be dismissed based on restorative justice. Together with the Criminal Investigation Regulation, it essentially turns restorative justice into a path to avoid a criminal conviction, placing it as the last resort.

A New Standard to Convict Defendants in Corruption Cases

In light of the disparity of the decisions rendered by the Indonesian courts in relation to corruption cases, the Indonesian Supreme Court recently enacted Supreme Court Regulation No. 1 of 2020 ("Regulation No. 1 of 2020") to provide a standardised and fair benchmark in convicting defendants for corruption under Articles 2 and 3 of the Anti-Corruption Law ("Anti-Corruption Law").

Under Regulation No. 1 of 2020,the court should sequentially consider the following six aspects to determine conviction for violation of Articles 2 and 3:

  1. the amount of loss suffered by the state;
  2. the scale of the crime, impact and benefits enjoyed by the defendant;
  3. the term of imprisonment;
  4. any incriminating and alleviating conditions;
  5. the criminal conviction; and
  6. any other provisions relating to a criminal conviction.