The most important requirement to petition for BAPMI's Arbitration for dispute settlement is a prior Arbitration Agreement between the disputing parties. Without an Arbitration Agreement, the dispute cannot be submitted to BAPMI. An Arbitration Agreement means a written agreement of the parties that the dispute between them will be resolved through BAPMI's Arbitration. An Arbitration Agreement may be set out in:
- one of the clauses of the agreement entered into by the parties before the dispute arises (Arbitration Clause); or
- a separate agreement entered into by the parties after the dispute arises.
The parties being bound by an Arbitration Agreement do not have the right to file a dispute to any District Court, and in this case any Court is incompetent to adjudicate the dispute of the parties being bound by an Arbitration Agreement.
Model Arbitration Clause:
BAPMI recommends the parties intending to choose the way of completion of Arbitration BAPMI in the contract using a standard Arbitration clause as follows:
"Any dispute arising out of and/or in connection with this Agreement and/or performance of this Agreement, regarding either a breach or tort, including termination and/or validity of this Agreement, shall be resolved and decided through BAPMI's Arbitration in Jakarta, in an Arbitral Tribunal consisting of three (3) Arbitrators, based on BAPMI's Rules, and final and binding Arbitration Award."
Arbitration Agreement after dispute arises:
Article 8 of Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution provides that in the event that the parties agree to choose the dispute settlement through Arbitration after the dispute occurs, the agreement must be in writing and contain the following:
- the issue in dispute;
- the full names and residences of the Parties;
- the full name and residence of the Sole Arbitrator/ Arbitral Tribunal;
- a place on which the Sole Arbitrator/ Arbitral Tribunal will pass an award;
- the full name of the Secretary in proceeding;
- a period of dispute settlement;
- a statement of preparedness of the Arbitrator.