Recognition and Enforcement of International Arbitral Awards in Indonesia: An International Law and Corporate Law Perspective
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Abstract
This article examines the recognition and enforcement of foreign arbitral awards in Indonesia by focusing on the tension between Indonesia’s formally pro-enforcement legal framework and the uncertainty generated by the public policy exception. Rather than merely restating the New York Convention, Law No. 30 of 1999, and recent procedural reforms, this article argues that the main legal problem lies in how public policy is interpreted and applied at the enforcement stage. The article uses the Karaha Bodas dispute as a foundational case study because it illustrates the conflict between international arbitral finality, state-linked commercial obligations, and domestic regulatory priorities. It further situates that case within broader doctrinal and procedural developments in Indonesia, including reforms under PERMA No. 3 of 2023. From a corporate law perspective, the article argues that enforcement uncertainty is not merely a procedural issue, but also a governance and risk-management issue, as it affects directors’ prudence, contractual risk allocation, arbitration clause design, and cross-border asset planning. The article concludes that Indonesia has moved toward a more structured enforcement regime, but greater consistency in the interpretation of public policy remains necessary to strengthen legal certainty and investor confidence.
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