Indonesia's arbitration regime is governed by Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution. While the law does not adopt the UN Commission on International Trade Law Model Law, the statute has provided a stable and enduring framework for arbitration practice in the past 25 years. In that time, arbitration has grown into a trusted mechanism for commercial dispute resolution in Indonesia.
Recent years have also brought important refinements, even as the arbitration community continues to anticipate a comprehensive reform of the Indonesian Arbitration Law.
The Supreme Court Regulation No. 3 of 2023 (SC regulation 3/2023) reinforced the enforceability of both domestic and foreign arbitral awards, underscoring the significance of arbitration in Indonesia's dispute resolution landscape. Constitutional Court Decision No. 100/2024 clarified the meaning of "international arbitral award", aligning domestic interpretation and removing longstanding ambiguities. Together, these developments enhance legal certainty, reassure investors, and further entrench arbitration's role in cross-border commerce.
Institutionally, Indonesia hosts a range of arbitral institutions catering to specific sectors. The most prominent arbitration institution is the Indonesian National Arbitration Board (BANI). It has recently introduced its new 2025 Arbitration Rules and Procedures.
Modernisation and challenges
2025 marks another step forward in Indonesia's effort to improve itself as a pro-arbitration jurisdiction in Southeast Asia. Recent judicial and institutional reforms, alongside evolving court practices, suggest a more consistent embrace of arbitration as a preferred dispute resolution mechanism. These developments are gradually enhancing confidence among both domestic and international users.
Still, Indonesia's aspirations to rival established regional arbitral hubs remain a work in progress. Its progress is best assessed against the more mature arbitral ecosystems of neighbouring jurisdictions in Southeast Asia.
This article reviews the principal changes shaping the Indonesian arbitration regime in 2025, focusing on the new 2025 Arbitration Rules and Procedures of the BANI, introduced in January 2025, and their interaction with the SC regulation 3/2023.
2025 BANI rules
The 2025 BANI rules refine the 2022 version in an effort to bring the institution closer to international standards. A new model arbitration clause is now provided, giving users clearer guidance when designating it as their forum.
Although the BANI has indicated that cases filed after 2 January 2025 will fall under the new rules, one question is whether parties may still select the earlier version by agreement. As with any reform, the effectiveness of the rules will ultimately depend on how their new mechanisms are applied in practice.
Emergency arbitration
The most significant innovation is the introduction of emergency arbitration. The mechanism allows parties to seek urgent interim relief before a tribunal is constituted. This provision aligns with already established practices of leading international arbitral institutions.
Emergency arbitration under the Indonesian Arbitration Law. Indonesia's Arbitration Law does not explicitly recognise emergency arbitration procedures. It characterises arbitral awards as final and binding, a concept that is unique compared to the interim nature of emergency awards. Their enforceability remains uncertain, particularly since SC regulation 3/2023 only provides for the enforcement of interim measures ordered by an arbitral tribunal.
Emergency arbitration under the 2025 BANI rules. Emergency arbitration allows parties to seek urgent interim relief before the full constitution of the arbitral tribunal. This mechanism is particularly valuable where waiting for the tribunal's formation could result in irreparable harm. In its procedures, the BANI chairman must appoint an emergency arbitrator within two days of receiving a request. The arbitrator must render a decision within 14 days, extendable by seven days. This is less prescriptive than timelines under other arbitration institution rules.
The rules declare emergency awards as "final and binding" and include a waiver of recourse to the District Court. While aimed at enhancing enforceability, this position must be assessed against article 70 of the Arbitration Law, which permits annulment of awards in certain circumstances. It remains unclear how courts will interpret this waiver.
Further questions arise over whether a subsequently constituted tribunal may modify or set aside an emergency award. Similarly, some questions remain in respect of the scope of relief that an emergency arbitrator may grant, and the enforceability of emergency awards under SC regulation 3/2023, which expressly provides for the enforcement of security attachments issued by a regular tribunal
A useful comparison can be drawn to article 18(5) of the 2025 BANI rules, which empowers a tribunal to order interim measures such as security attachment, the deposit of goods with third parties, or the sale of perishable goods. Whether emergency arbitrators may exercise equivalent authority, and how such measures will be recognised by Indonesian courts, remains an open question.
While the rules permit challenges to emergency arbitrators, they do not clarify whether such challenges suspend the ongoing proceedings. By contrast, rules of other institutions provide for suspension during a challenge, ensuring procedural fairness. Guidance from the BANI on this point would provide welcome certainty.Regarding costs, the BANI sets a flat fee of IDR200 million (USD12,000) excluding VAT, payable on filing. This cost is envisaged to be paid by the requesting party.
Despite these uncertainties, the adoption of emergency arbitration represents an important modernisation and demonstrates the BANI's intent to align with international best practices.
Indonesian counsel in proceedings
In the spirit of Indonesia's Independence Day, the 2025 BANI rules reflect a major reform in a similar spirit in arbitration by expanding the role of Indonesian counsel across all proceedings. Previously, the rule applied only to cases governed by Indonesian law. The 2025 rules now require local counsel participation in all BANI arbitrations, regardless of the governing law.
This promotes the role of Indonesian practitioners and builds domestic arbitration capacity, but a question remains as to whether it may narrow party autonomy.
Multi-party and multi-contract
The 2025 BANI rules replace the prior discretionary consolidation mechanism with explicit provisions for initiating multi-party and multi-contract arbitrations at the filing stage. Specifically, parties may submit an arbitration request:
- involving multiple parties, provided a clear connection between them can be established; and
- arising from multiple agreements, where the agreements are interrelated and all designate BANI arbitration.
This reform enables parties to commence multi-party or multi-contract arbitrations from the outset, rather than filing separate cases and later seeking consolidation.
That said, uncertainty remains as to whether the consolidation mechanism under the 2022 BANI rules continues to be available. The term "consolidation" is absent from the 2025 BANI rules, which instead only provide for the initiation of such proceedings. Further clarification may be required on whether these requests are subject to the discretion of the BANI chair or secretariat, or whether they will be automatically accepted on filing.
Challenge grounds
The 2025 BANI rules introduced an additional valid ground to challenge an arbitrator at the discretion of the BANI chair, namely, based on a de jure (existing by legal right) or de facto (whether by right or not) failure to act. This new provision allows an arbitrator to be challenged if they fail to perform their duties.
Conclusion
The 2025 BANI rules suggest progress towards modernising Indonesia's arbitral regime. The introduction of emergency arbitration, multi-party and multi-contract mechanisms, and enhanced arbitrator accountability brings the BANI closer to international norms.
Some questions remain, particularly around the enforceability of emergency awards under national law and consolidation mechanisms. Whether Indonesian courts will support these innovations under SC regulation 3/2023 will be decisive for their long-term impact.
Overall, the reforms reflect Indonesia's continuing evolution as a more arbitration-friendly jurisdiction. While gaps remain compared to established arbitral centres, the new rules represent a positive step towards improved confidence in Indonesian arbitration as a viable venue for dispute resolution.
Originally published by Asia Business Law Journal.
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