At a glance: energy disputes procedure in Indonesia

Commercial/civil law – procedural

How do courts in your jurisdiction resolve competing clauses in multiple contracts relating to a single transaction, lease, licence or concession, with respect to choice of forum, choice of law or mode of dispute resolution?

There is no specific procedure to resolve competing clauses in multiple contracts relating to a single transaction, lease, licence or concession because each court has discretion to make a decision based on the submissions made by the parties to the dispute. However, judges will primarily refer to the Indonesian Civil Procedural Law to assess whether the dispute falls under their jurisdiction. Judges are not bound by precedent.

Are stepped and split dispute clauses common? Are they enforceable under the law of your jurisdiction?

Stepped dispute resolution clauses are common and enforceable in Indonesia. If a civil dispute is administered in district court, mediation is mandatory. Split dispute resolution clauses are not common, but they are not expressly prohibited by statute.

How is expert evidence used in your courts? What are the rules on engagement and use of experts?

Parties are free to present expert evidence to support their arguments. Under the Civil Procedural Law, expert testimony is not recognised as a form of statutory evidence, except in specific cases such as environmental cases. There are no provisions for the rules of engagement and use of experts by the disputing parties. In certain conditions, the panel of judges may summon an expert based on the request of one of the parties or ex officio.

What interim and emergency relief may a court in your jurisdiction grant for energy disputes?

There is no specific interim and emergency relief for energy disputes. In general, the court may grant interim relief concerning the authority of a court and conservatory attachment.

What is the enforcement process for foreign judgments and foreign arbitral awards in energy disputes in your jurisdiction?

Foreign judgments are not enforceable in Indonesia.

Foreign arbitral awards are enforceable in Indonesia, which is a party to the New York Convention, and further regulated in Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution (AADR Law). The enforcement process of foreign arbitral awards can be summarised as follows:

• the arbitrator or legal counsel may register the foreign arbitral award with the Registrar of Central Jakarta District Court. The registration process requires the submission of:

• • • an authentic copy of the award and an official translation;
    • an authentic copy of the agreement that served as the object of the dispute and an official translation; and
    • a statement from the diplomatic representative of the Republic of Indonesia in the country where the award is issued, stating that the issuing country is party to the New York Convention;

• submission of recognition and enforcement (exequatur) petition to Central Jakarta District Court;
• issuance of exequatur stipulation by the Head of Central Jakarta District Court; and
• if the respondent refuses to comply with the award voluntarily, the usual court decision enforcement will take place (reprimand/aanmaning, attachment and auction).

Are there any arbitration institutions that specifically administer energy disputes in your jurisdiction?

No. However, the Indonesian Special Task Force for Upstream Oil and Gas Business Activities through PTK 007 mandates that if an agreement concerning the supply of goods or services between subcontractors and holders of a production sharing contract stipulates arbitration as the dispute resolution mechanism, the arbitration should be domestic. The AADR Law does not expressly define domestic arbitration but in practice, the parties will generally choose the Indonesian National Arbitration Agency (BANI).

Is there any general preference for litigation over arbitration or vice versa in the energy sector in your jurisdiction?

In practice, parties to energy sector contracts generally choose arbitration to resolve disputes. Other than the complexity of such cases, this is because arbitration offers flexibility of procedure, confidentiality, clearer timelines, freedom to choose arbitrators and finality. Based on the AADR Law, arbitration is only allowed for commercial disputes. The AADR Law does not define ‘commercial dispute’, but lists examples of commercial activities that include trade, banking, finance, investment, industrial activities and intellectual property.

Are statements made in settlement discussions (including mediation) confidential, discoverable or without prejudice?

Under the Advocates Code of Ethics issued by the Indonesian Bar Association, statements made in a settlement discussion are without prejudice (ie, the statements and confessions of the parties for settlement purposes cannot be used as evidence in the proceeding if the parties fail to reach an agreement). The Supreme Court also mandates an identical obligation for mediation administered by district courts.

Are there any data protection, trade secret or other privacy issues for the purposes of e-disclosure/e-discovery in a proceeding?

Indonesian law does not provide for discovery in proceedings.

What are the rules in your jurisdiction regarding attorney–client privilege and work product privileges?

Law Number 18 of 2003 on Advocates (Advocates Law) provides that advocates must keep confidential everything that is known or obtained from their clients unless required by law. Advocates are entitled to a confidential relationship with the client, including protection of their files and documents against confiscation or inspection and protection against interception of the advocate‘s electronic communications.

Must some energy disputes, as a matter of jurisdiction, first be heard before an administrative agency?

Yes, if the dispute concerns a decision or action by a state organ (eg, environmental permit, mining business licence, etc) then administrative proceedings precede any claim before the state administrative court. Administrative proceedings include objections and administrative appeals.

On a separate note, any contractual dispute between individuals or legal entities, or both, may be directly heard by the district court.