Cross border of Jurisdiction between Arbitration and District Court in Business Dispute Settlement under the Indonesian Legal System

Abstract

In Indonesia, the resolution of business disputes can be pursued through amicable means, either via the court system or alternative methods. Court proceedings often entail prolonged durations, which can significantly increase overall case costs compared to out-of-court dispute resolution options. Among these alternatives, arbitration stands out as a preferred method due to its adjudicative nature, akin to court proceedings, and its advantages over mediation, conciliation, and negotiation. Arbitration is frequently perceived as more effective and efficient, facilitating win-win solutions for disputing parties. Within the Indonesian legal framework, arbitration closely resembles court procedures for dispute resolution, with its awards holding equivalent binding authority and enforceability. This article employs secondary data analyzed through a qualitative-juridical methodology to investigate the jurisdictions of district courts and arbitration. The findings indicate that arbitration assumes absolute jurisdiction in the presence of an arbitration clause or an underlying arbitration agreement, thereby precluding the jurisdiction of the district court.