The enforcement of arbitral awards in Indonesia continues to face legal and procedural obstacles despite the country’s adoption of international arbitration standards. The findings were revealed in a study conducted by I Made Kariyasa from Mahasaraswati University Denpasar. The research was published in the April 2026 edition of the Contemporary Journal of Applied Sciences (CJAS).
The study examined the implementation of arbitral awards within Indonesia’s national judicial system amid the growing complexity of cross-border commercial disputes. Arbitration has increasingly become a preferred dispute resolution mechanism among business actors because it offers faster procedures, confidentiality, flexibility, and decisions that are final and binding.
According to the study, the expansion of economic globalization has increased the demand for dispute resolution mechanisms outside conventional courts. In Indonesia, the use of arbitration has continued to grow alongside rising investment activity and international business transactions.
Legally, Indonesia already has Law No. 30 of 1999 concerning Arbitration and Alternative Dispute Resolution and has ratified the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. However, the enforcement of international arbitral awards in Indonesia still requires judicial recognition through an exequatur process handled by national courts.
The researcher explained that this condition creates a close dependency between arbitration and the national judicial system. In practice, Indonesian courts still hold the authority to determine whether arbitral awards violate public policy principles.
The study used a normative juridical approach with a literature review method. Research materials included legislation, legal journals, legal doctrines, and court decisions related to both national and international arbitration practices.
The findings identified several major challenges in the enforcement of arbitral awards in Indonesia:
- The interpretation of “public policy” remains overly broad and is frequently used as grounds to reject the enforcement of international arbitral awards.
- National courts still possess the authority to annul arbitral awards despite arbitration decisions being final and binding.
- Judicial decisions involving arbitration cases remain inconsistent across courts.
- Enforcement procedures remain lengthy because they require exequatur and multiple legal stages.
- Many arbitral awards are difficult to execute because of challenges in locating and seizing the losing party’s assets.
The study also highlighted the major Karaha Bodas Company (KBC) vs Pertamina case as a clear example of conflict between international arbitral awards and Indonesia’s national courts. In that dispute, Indonesian courts attempted to annul an international arbitral award related to a geothermal energy project. However, courts in the United States still recognized and enforced the award, allowing asset seizures abroad.
Another case discussed in the study was Astro Nusantara International BV vs PT Ayunda Prima Mitra, where Indonesian courts refused to enforce an arbitral award issued by the Singapore International Arbitration Centre (SIAC) on procedural and jurisdictional grounds. The research viewed this as evidence of Indonesia’s still restrictive approach toward international arbitration.
According to I Made Kariyasa, these conditions place arbitration in Indonesia within a “semi-autonomous” system because the effectiveness of arbitral awards remains highly dependent on court approval. This situation is considered capable of reducing legal certainty and weakening foreign investor confidence in Indonesia’s legal system.
To improve the effectiveness of arbitral award enforcement, the study recommended several strategic measures:
- Regulatory reform to clarify the limits of public policy interpretation in line with international standards.
- Strengthening judicial competence in international arbitration law.
- Simplifying enforcement procedures to make them faster and more efficient.
- Adopting digital technologies such as online dispute resolution and blockchain-based arbitration systems.
- Increasing legal awareness among business actors regarding arbitration mechanisms.
The study is considered important because it demonstrates that although Indonesia has adopted modern arbitration regulations, their implementation still requires stronger harmonization between national courts and international arbitration standards. Without more consistent reforms, arbitral awards risk becoming merely administrative victories without effective enforcement in practice.
Author Profile
- I Made Kariyasa - University Denpasar
Research Source
Kariyasa, I Made. Implementation of Arbitral Awards in the National Judicial System in Modern Commercial Disputes in Indonesia. Contemporary Journal of Applied Sciences (CJAS), Vol. 4 No. 5, April 2026, pp. 311–318.
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