Chinese Foreign Minister Wang Yi (left) meets Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan (right) ahead of the fourth high-level dialogue and cooperation mechanism between Indonesia and China in Labuan Bajo, East Nusa Tenggara, on April 19, 2024. — The Jakarta Post
JAKARTA: Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan has proposed creating a legal framework that includes arbitration rules like those enforced in Singapore to help attract more investment, including family offices, to Indonesia.
Speaking at the launch for the Mineral and Coal Information System (Simbara), Luhut claimed that making arbitration, where disputes between parties from different countries are resolved outside of the jurisdiction via an impartial third party, final or non-appealable was “simple” and would bring legal certainty.
“When the arbitrator – an international, certified one that comes from abroad – in the arbitration court has decided A, then A is the final decision, no more appeal.
If there are appeals, that creates room for foul play,” said Luhut, adding he had conveyed this to President Joko Widodo.
In a press conference following the ceremony, the senior minister said final arbitration was practised in Singapore, Abu Dhabi and Hong Kong, which were three of Asia’s main hubs for family offices, hence his proposal to put something similar in place in the archipelago.
“Implementing this will bring about legal certainty in our country, and there are so many people who want to put their money in Indonesia,” claimed Luhut.
A family office is an organisation or firm responsible for managing the wealth of ultra-rich individuals or families.
The entity differs from typical asset managers since it is built solely for managing the assets and investments of a small group of individuals or families.
Luhut said an “abundant” amount of “family office and family business” money wanted to enter Indonesia.
Indonesia does not have its own international arbitration court, but the country did ratify the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the 1958 New York Convention, in 1981, which makes it subject to decisions in international courts, known as arbitral awards.
International arbitration is a method of resolving disputes between parties from different countries outside of the jurisdiction, where an impartial third party, the arbitrator, makes a binding decision.
It is often used in commercial disputes, offering a private, flexible, and neutral forum for conflict resolution.
Arbitration cases are handled by the Indonesian National Board of Arbitration for both domestic and international disputes in the country.
However, arbitral awards can be appealed in Indonesia through the Supreme Court, in accordance with the 1999 Arbitration Law. — The Jakarta Post/ANN
