Alternative Dispute Resolution Inside The Court in Indonesia

Some of foreign clients ask me, "is there any alternative dispute resolution inside the court in Indonesia?". Some foreign investors are asking this to me, given the risks of investing, including the dispute resolution in court. The foreign investors are always comparing the law in Indonesia with the laws in their home country, which happens to their native state law is more comprehensive in dispute resolution.

Alternative dispute resolution in civil court is mediation  for settlement, which in some other countries also called "settlement hearing". In principle, the process towards settlement can be done anytime during the court process, either at the beginning of the process (at mediation) or at the end of the process (before the verdict). Mediation as stipulated in Article 2 paragraph (2) Supreme Court Regulation Number 01 Year 2008 (“Perma 01/2008”) regarding the Procedure of Court Mediation is a procedure which is mandatory or traversed by each judge, the mediator and the disputing parties. Any violation of this process will result in a court decision to be null and void.


Unfortunately, in practice, the process of mediation in accordance Perma 01/2008 has not been sufficiently effective in reconciling the parties. In my experience, there are some things that should be put forward in mediation:


The attorney should not only encourage his principals to actively and directly participate as stipulated in Article 7 paragraph (4) Perma 01/2008, but the disputing parties shall attend and actively participate in the mediation process. Thus, mediation was attended not only by attorney, but also actively attended by the disputing parties. 


In the event that one party (either principal or their attorney) were not present although it has been properly called or principal was not present without a logical reason (even though its attorney was present), there should be a mechanism that the mediator has the right to give recommendations to the panel of judges who will examine the case that the party who was not present has no good faith in resolving disputes. 


In Article 10 Perma 01/2008 there were two kinds of mediators, a judge and not a judge. Of course in practice, the disputing parties prefer judge mediator since no charge. It is desirable if the judge mediator also get compensation, then the judge mediator will participate more active in reconciling the parties. 


In my opinion, to impose a fee for the services of a judge mediator did not violate the principle of justice system that are simple, fast and low cost. The emphasis of the mediation process is the settlement efforts.


Kukuh K. Hadiwidjojo