Definition of Adjudication:
Definition of "Adjudication" may be very confusing because the term is a generic term to refer to a settlement process by binding decision of a competent authority. Even in Indonesian language, the term is often adapted into "Ajudikasi", whereas the letters "Ad" in Adjudikasi (Adjudication) should not be changed simply into "a", which in Indonesian language means "not".
In the discussion on Alternative Dispute Resolution (ADR), those included in the Adjudication mechanism are Court and Arbitration processes because both involve a decision made by a competent authority (judges/ Arbitrators) and the decision is binding, while those included in the non-Adjudication mechanism is negotiation, Mediation, conciliation, etc., which involve no decision (but a settlement agreement entered into voluntarily by the parties). Furthermore, in the last decade, the term "Adjudikasi (Adjudication)" is then associated with an ADR mechanism with the characteristics similar to Arbitration. It could be argued that Adjudication is a simplified Arbitration mechanism to be then customized in such a way so as to meet the needs of dispute resolution of retail and small claims, because it would be costly when retail and small claims are resolved through Arbitration.
If Arbitration is considered expensive for a retail and small claim, why the claim is not resolved through Mediation? Such retail and small claim has previously been pursued through Mediation but failed to reach a settlement agreement. Furthermore, the parties want a decision on the claim without going through Arbitration, let alone judicial process. The Adjudication mechanism is developing rapidly in the context of consumer protection. It is therefore not surprising that such a mechanism feels customers friendly.
Adjudication is similar to Arbitration with the following differences:
- Arbitration is for all parties provided that they are bound by an Arbitration agreement, whereas Adjudication is only for customers of retail and small claims as Petitioners (plaintiffs)
- financial services providers/ financial services institutions as respondents (defendants);
- Arbitration has no expiration date of claim, unless it is set forth in the civil law, while the filing of BAPMI's Adjudication is restricted to a maximum of 30 days after the parties sign an Adjudication agreement entered into no later than 30 days after the Mediation taken by the parties fails to achieve settlement;
- Arbitrators are selected by the parties, while Adjudicators are selected by BAPMI's Management;
- in Arbitration proceedings, reply and rejoinder are submitted, while in Adjudication, only answer (response of respondent/ defendant to Petitioner's/ plaintiff's claim) is submitted;
- Arbitration proceedings are intended to seek legal facts, while Adjudication is only for general facts;
- Arbitrators decide based on fairness and justice (ex aequo et bono) when such authority is given by the parties, while Adjudicators must decide based on fairness and justice only;
- Arbitration Award is final and binding, while Adjudication Award will be final and binding when the Petitioner (plaintiff), which is the consumer, accepts the award;
Reasons for choosing BAPMI's Adjudication:
There are several reasons why the disputing parties choose BAPMI's Adjudication to resolve disputes:
- the disputing parties can no longer continue the negotiations;
- the disputing parties requires a settlement method with right-based procedure/ approach;
- the disputing parties requires a final and binding decision, but the consumer as the Petitioner (plaintiff) requires an option for him to choose whether to accept or reject the decision;
- the service provider as the respondent (defendant) wants to provide good services to the customer in the hope of gaining positive impacts for the service provider in terms of other consumers' loyalty (including the general public);
- the disputing parties want to get a guarantee that the person who will make a decision on the dispute (Adjudicator) really understand the Capital Market issues and have the expertise in Adjudication practices;
- the disputing parties want to resolve the dispute through a forum that is closed to the public;
- the disputing parties requires clean procedural practices.