Arbitration: Understanding According to Experts, Legal Basis, Terms, Purpose, Types, Benefits and Examples

Arbitration: Understanding According to Experts, Legal Basis, Terms, Purpose, Types, Benefits and Examples – What is Arbitration? On this occasion, Seputardinding.co.id will discuss it and of course about other things that also cover it. Let's look at the discussion together in the article below to better understand it.

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Arbitration: Understanding According to Experts, Legal Basis, Terms, Purpose, Types, Benefits and Examples

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Arbitration is a form of settlement of a conflict or civil dispute that is carried out in outside the general court based on an agreement made in writing by the parties to the dispute. Arbitration is carried out on the basis of the will of the disputing parties in the form of an arbitration agreement. Usually arbitration is used as an alternative to being an option that can be chosen to deal with legal issues.

Arbitration is a way of resolving civil conflicts or disputes outside of court. Conflict resolution through the arbitration method is regulated by article 1 paragraph (1) of Law no. 30 of 1999

The term meaning of arbitration or arbitration originates from the French language which ends in a decision made by an arbitrator at an arbitral tribunal. With these references, the notion of arbitration can also be said to come from Latin, namely arbitrare which has the meaning of power to overcome something with wisdom in achieving something results.

Therefore, in a science of law the mention of the notion of arbitration is very popular and in general can be understood to easily solve problems through policies outside the general court.

It will be very different when viewed through the point of view of economics, the term arbitration is as the practice of gaining profit from the difference in price between two financial markets other.

With this it will mean that there is a combination of the two types of financial markets in order to gain an advantage. What is meant by profit is the difference in market prices from one store to another.

In education, the designation of arbitrage is a transaction without negative cash flow and at least there must be positive cash flow in a condition. With this it can be simply often referred to as achieving profits without having to implement risk management steps. As an application in a company itself it will usually involve stocks, bonds, currencies, commodities, and others.

So, in a science of law the mention of the notion of arbitration is very popular and in general it can be understood to easily solve problems through policies outside the general court.

If you want to resolve a problem by arbitration, both parties to the dispute must agree beforehand. They are also required to appoint an intermediary party called an arbitrator. Furthermore, they are obliged to make a written agreement on the results of their negotiations.

The written agreement on the results of the arbitration is also known as the arbitration clause. The written agreement is a binding outcome between the two parties to the dispute.

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Definition of Arbitration According to Experts

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  H. Priyatna Abdurrasyid

Arbitration is a process of examining a dispute which is carried out judicially by several parties who are in dispute with each other. Solving the problem of the dispute will depend on the evidence that comes from the submissions of both parties.

• Frank Elkoury and Edna Elkoury

Arbitration is an easy or simple process that is voluntarily chosen by the parties who wish to settle the case decided by a neutral arbitrator according to their choice where their decision was based on the arguments in the case the.

• Stanford M. Altschul

Arbitration is an alternative dispute resolution system agreed upon by all parties for disputes. This system provides fast resolution of personal disputes.

• Marwan and Jimmy

Arbitration is a method of settling civil disputes outside of a general court which is based solely on an arbitration agreement made in writing by the parties to the dispute.

• Law Number 30 of 1999 Article 1 paragraph 1

Arbitration is a way of settling a civil dispute outside a general court based on an Arbitration Agreement made in writing by the parties to the dispute.

• Sudargo Gautama

Arbitration is an effort made by the conflicting parties in resolving disputes with value positive, because it does not result in casualties and losses between the countries involved problem.

• H.M.N. Purwosutjipto

Arbitration is a process of examining a dispute which is carried out in a judicial manner such as by the disputing parties and resolved on the basis of the evidence submitted by the parties party.

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Legal Basis for Arbitration

• Law Number 48 of 2009 concerning Judicial Powers
• Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution
• Law Number 5 of 1968 concerning Settlement of Disputes Between the State and Foreign Nationals Regarding Investment
• Presidential Decree Number 34 of 1981 concerning Ratification of the Convention on the Recognition and Enforcement of Foreign Arbitral Award
• Supreme Court Regulation Number 1 of 1990 concerning Procedures for Implementing Foreign Arbitration Awards
  UNCITRAL Arbitration Rules

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Arbitration Terms

According to Article 66 of Law no. 30 of 1999, the following are the conditions for arbitration, namely:

• The international arbitral award is handed down by an arbitrator or arbitral tribunal in a country that is the same as Indonesia bound by agreements, both bilaterally and multilaterally regarding the recognition and enforcement of arbitral awards international.
• International arbitration awards are limited to decisions that according to Indonesian law are within the scope of trade law.
• International arbitral awards can only be enforced in Indonesia and the decisions are not contrary to public order.
• International arbitral awards can be enforced in Indonesia after obtaining an executor from the Chairman of the Central Jakarta District Court.

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Purpose of Arbitration

Arbitration has the aim of resolving disputes in the presence of disinterested third parties. The third party, an arbitrator, hears the evidence brought by both parties and makes a decision. Arbitrators can act as spectators, witnesses, or listeners.

Arbitration is a form of alternative dispute resolution (ADR), which is used as substitute for litigation in hopes of resolving the dispute without the expense and time to go to court. Litigation is a process in court involving decisions that are binding on both parties.

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Types of Arbitration

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  Ad Hoc Arbitration

Ad Hoc Arbitration is a dispute settlement that is carried out specifically to handle and provide decisions for certain disputes. Ad hoc arbitration is not managed by an institution. The parties will define their own roles in aspects of the arbitration, such as the appointment of arbitrators, the rules in force, and the timetable for filing various documents.

Without a governing body, parties to an ad hoc arbitration are free to use the procedure of their choice. In cases where no procedural rules have been agreed upon, the arbitral tribunal will administer the arbitration in such manner as it deems appropriate.

Ad hoc arbitration can also be converted into institutional arbitration. If the parties feel they need the assistance of a special agency to deal with the case in some way.

• Institutional Arbitration

Institutional Arbitration is the opposite of Ad Hoc Arbitration. Institutional Arbitration will later see an official arbitration body in resolving and awarding dispute decisions. So, later the disputing parties will ask for assistance from the institution until the case is resolved.

Unlike the ad hoc type, in this arbitration the institution is permanent so that dissolution does not occur even though the dispute decision has been made. Neighbor disputes that must be mediated by the head of the RT/RW (school is already a home for us)

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Benefits of Arbitration

Some of the benefits of arbitration include:

• Arbitration is Private

The arbitration process including this trial is not open to the public. Parties and arbitrators are often bound by strict confidentiality rules. Thus, business secrets and important information can be protected from the public, media and/or competitors.

• Arbitrators are Experts

The parties can freely choose arbitrators as long as the arbitrators chosen are impartial or independent. The selected arbitrators may come from other countries or professional fields. This will ensure the arbitrator has professional expertise and is able to handle any dispute or dispute.

• Arbitration Can Save Time And Cost

Specially made procedures and the absence of an appeal and/or review process provide an opportunity for the arbitration process to be completed in a relatively short time. The costs that must be incurred can be more efficient.

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Dispute Resolution Process by Arbitration

The method of resolving disputes using the arbitration method begins by registering the Indonesian National Arbitration Board (BANI). The stages are as follows:

• Register with BANI and collect the required requirements
• Appoint an Arbitrator
• Listen to the applicant's response
• Counterclaim process
• Examination process

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Advantages and Disadvantages of Arbitration

Following are the advantages and disadvantages of arbitration including:

• Advantages of Arbitration

  • Guaranteed confidentiality disputes of the parties
  • Delays caused by procedural and administrative matters can be avoided
  • The parties may choose an arbitrator who according to their belief has sufficient knowledge, experience and background regarding the matter in dispute, is honest and fair.
  • The parties can determine the choice of law to resolve the problem as well as the process and venue for arbitration and awards Arbitration is a decision that is binding on the parties and can be obtained through simple procedures (procedures). held

• Disadvantages of Arbitration

  • Arbitration is not yet widely known, both by the general public, and by the business community, and even by the academic community itself.
  • The community has not placed sufficient trust, so they are reluctant to submit their case to an arbitration institution.
  • The Arbitration Institution and ADR do not have coercive power or authority to execute their decisions.
  • Lack of compliance of the parties to the settlement results achieved in Arbitration, so they often denied in various ways, either by stalling, resistance, lawsuits and annulment etc.
  • Lack of the parties hold business ethics. As an extra judicial mechanism, arbitration can only be based on business ethics, such as honesty and fairness.

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Example of Arbitration

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  The Government of Indonesia and Hesham Al Warraq

On December 15, 2014, ICSID won Indonesia against a lawsuit by a Century Bank shareholder, Hesham Al Warraq. This is Indonesia's second victory in a related case, which previously faced the former shareholder of the same bank, Rafat Ali Rizvi.

In 2011, Hesham, who had served as Deputy Chief Commissioner of Bank Century, sued the government for the expropriation of shares in the bank. He asked for damages worth US $ 19.8 million. Instead of obtaining compensation, ICSID actually rejected Hesham's lawsuit regarding acts of expropriation.

Thus, Indonesia's victory in the two Century Bank cases prevented the government from having to pay a fee of around IDR 1.3 trillion or US$ 100 million.

• Churchill Mining Plc, Planet Mining, and the Government of Indonesia

On December 6, 2016, the Government of Indonesia won a lawsuit against two foreign coal mining companies. The decision of an international arbitration institution, the Washington DC-based International Center for Settlement of Investment Dispute (ICSID), rejected the lawsuits of the two companies.

The lawsuit stems from the revocation of the business licenses of the two companies by the Government of East Kutai in 2010. Churchill Mining Plc from England once obtained a mining permit for 350 km2 in Busang, Telen, Muara Wahau and Muara Ancalong by acquiring a 75% stake in PT Ridlatama Group. Meanwhile, Planet Mining from Australia is a subsidiary of Churchill.

Previously, Churchill had filed a lawsuit against PTUN Samarinda. However, the result is the same, the revocation of the business license by the regent is in accordance with the procedure. The appeal process continued up to the Supreme Court and the results remained the same, until Churchill took the case to international arbitration. Based on the ICSID decision, Indonesia is entitled to a lawsuit worth US$1.31 billion or around Rp.17 trillion.

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Examples of Arbitration Company Cases

• Dispute between Pertamina against Commerz Asia Emerald which was resolved by means of the Singapore International Arbitration Center (SIAC), in Singapore in 2008.

• Dispute related to Century Bank where two of its shareholders filed a lawsuit against the Government of Indonesia, namely Rafat Ali Rizvi and Hesman Al Warraq which was resolved with ICSID, Singapore

• Dispute between Cemex Asia Holdings which fought against Indonesia which was resolved by way of the International Center for Settlement of Investment Dispute (ICSID) in 2004 to 2007.

• Dispute between Newmont against the Government of Indonesia which was resolved by ICSID, Washington DC.

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Arbitration Company Conditions

The situation experienced by the company will occur where there are 3 conditions of the company experiencing an arbitration, namely as follows:

• In every market the same asset is not traded at the same price.

• With two identical company assets or cash flows but not trading at the same price.

• In an asset with a futures contract value, where the asset is currently not being traded at the contract price because there are warehouse storage costs for the asset that must be considered.

Thus the review from Seputarknowledge.co.id about Arbitration,hopefully can add to your insight and knowledge. Thank you for visiting and don't forget to read other articles.