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When Sued at SIAC: What to Do?

SIAC

The International Monetary Fund (“IMF”) report predicts that the prospect of global economic growth in 2023 is only 2.3%, providing a projection of the chasm of crisis and recession in sight. In its 2022 World Economic Outlook (“WEO”) report, the IMF is also concerned about the deteriorating outlook for the global economy and that inflation in recent decades could worsen global economic conditions.

A. The Role of SIAC in Economic Conflicts Between Countries due to the Global Recession

Early warnings about a potential global economic recession in 2023 began to be echoed by global financial institutions such as the IMF and the World Bank. The current economic crisis in several countries clearly indicates the emergence of a recession. Investment research firm Ned Davis Research estimates a 98.1 percent chance of a recession in 2023.

One sector that could be significantly impacted by an economic recession is economic business relations. Economic recession will likely lead to defaults and disputes, and therefore, suitable dispute resolution institutions play a very important role. One of the most widely used dispute resolution institutions is Arbitration. Under Indonesia Arbitration Law (“Law 30/1999”), Arbitration is a method of resolving civil disputes outside the general court based on an arbitration agreement made in writing. by the parties to the dispute.

Law 30/1999 allows  Arbitration to be carried out using national or international arbitration institutions based on the agreement of the parties. One of many well-known international arbitration institutions is the Singapore International Arbitration Center (“SIAC”). SIAC’s advantages include being an internationally renowned institution. Indonesian business actors also choose SIAC because of its closer geographical location. The arbitrators at SIAC are considered to have a better understanding of the ins and outs of problems commonly encountered in resolving business disputes in Indonesia. In addition, the adoption of the choice of forum in the SIAC is an advantage in dispute resolution where the election is made to the judiciary or other institution determined by the parties as the institution that will handle their dispute if it occurs in the future.

SIAC

Read More: Conciliation: an Alternative Dispute Resolution

B. Common Procedure of Dispute Settlement at SIAC

Procedures for resolving disputes through the SIAC arbitration institution by the Rules of Singapore International Arbitration Center 2016 include:

  • Notice of Arbitration to the Registrar;
  • Response to Notice of Arbitration. The Respondent is obliged to send a response to the clerk within 14 days of receiving the notice of arbitration;
  • Appointment of Arbitrators; and
  • Implementation of Events.

After the Tribunal decides on the arbitration award, it is automatically said to be an international award because it was handed down by an arbitration institution or an individual arbitrator outside the jurisdiction of the Unitary State of the Republic of Indonesia.

Pursuant to article 66 of Law 30/1999, international arbitral awards can only be recognized and enforced in Indonesia if they meet the following requirements:

  1. International arbitration awards are made by an arbitrator or arbitral Tribunal in a country where Indonesia is bound by an agreement, both bilateral and multilateral, concerning the recognition and implementation of international arbitral awards.
  2. International arbitration awards are limited to decisions that according to Indonesian law, fall within the scope of commercial law
  3. International arbitral awards can only be enforced in Indonesia, limited to decisions that do not conflict with public order.
  4. International arbitration awards can be enforced in Indonesia after receiving an exequatur from the Chairman of the Central Jakarta District Court.
  5. An international arbitral award involving the Republic of Indonesia as a disputing party can only be enforced after receiving an exequatur from the Supreme Court of the Republic of Indonesia, which is then transferred to the Central Jakarta District Court.

C. SIAC Awards and Its Impacts on the Global Economy

The Rules of Singapore International Arbitration Center 2016 stipulate that when the parties have agreed to take their dispute to SIAC for arbitration or arbitration in accordance with the SIAC Rules, the parties are deemed to have agreed that the arbitration will be conducted and governed under these Rules. Therefore, the arbitrator’s decision must be made by both parties and is final and binding.

SIAC certainly has a very important role in dealing with an economic recession. This is because there are not a few agreements that rely on dispute resolution by both parties at SIAC, but many agreements regulate that dispute resolution will be carried out at SIAC. Therefore, the SIAC decision will have an impact on the global economy because, of course, it will handle cases related to capital, goods, and services.

To find out more about the role of SIAC in economic conflicts between countries due to the global recession, ADCO Law cordially invites you to attend ADCOTalks – 2023: Thinking Outside Pandora’s Box, on Tuesday, November 29, 2022, live on Zoom. 

 

Please click the button above for more information on ADCOTalks – 2023: Thinking Outside Pandora’s Box. The discussion will not only cover the role of SIAC in the global recession and the common procedure of dispute settlement at SIAC, but also the SIAC awards and its impacts on the global economy. 

 

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ADCO Law is a law firm that offers clients a wide range of integrated legal services, including commercial transactions and corporate disputes in a variety of industry sectors.

Over the course of more than a decade, we have grown to understand our client’s industry and business as well as the regulatory aspect. In dealing with the business dynamics, we provide comprehensive and solid legal advice and solutions to minimize legal and business risks.

Should you have more queries regarding this matter, please do not hesitate to contact us

ADCO Law

Setiabudi Building 2, 2nd Floor, Suite 205C

Jl. H.R. Rasuna Said Kav. 62, Setiabudi Karet

Jakarta Selatan, 12920, Indonesia.

Phone : +6221 520 3034

Fax      : +6221 520 3035

Email   : [email protected]

 

Disclaimer: This article has been prepared for scientific reading and marketing purposes only from ADCO Law. Accordingly, all the writings contained herein do not constitute the formal legal opinion of ADCO Law. Therefore, ADCO Law should be held harmless of and/or cannot be held responsible for anything performed by entities who use this writing outside the purposes of ADCO Law