ARTIKEL

Disputes or conflicts often arise in communal living, particularly in various economic and business activities. Differences of opinion, conflicting interests, and the fear of being disadvantaged are common causes of these disputes.

The resolution of business disputes is typically carried out through litigation or dispute resolution through a court process. This involves filing a lawsuit with the district court and concluding with a judge's decision. However, in addition to litigation, there is also non-litigation dispute resolution.

Using alternative dispute resolution (ADR) mechanisms to settle disputes outside of court is known as non-litigation dispute resolution. According to Law Number 30 of 1999 concerning arbitration and alternative dispute resolution (ADR Law), there are two primary forms of arbitration and alternative dispute resolution available in Indonesia for non-litigation resolution.

Arbitration is the voluntary submission of a dispute to a neutral third party, who may be an individual or an ad hoc arbitrator. The word arbitrate is derived from the Latin word arbitrare, which means the power to settle a matter based on discretion. Abdul Kadir defines arbitration as voluntarily submitting a disagreement to a trained third party for resolution with the understanding that the arbitrator's ruling will be final and enforceable. Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution, Article 1, defines arbitration as a process for settling a civil dispute outside of the general court based on a written arbitration agreement made by the disputing parties.

According to this interpretation, arbitration is a civil agreement whereby the disputing parties agree to have a third party, known as an arbitrator, decide their disputes. The arbitrator is chosen collectively by the disputing parties, and the parties agree to abide by the arbitrator's ruling.

How can parties use arbitration institutions to settle their disputes? Prior to using arbitration institutions for dispute resolution, the parties must agree in writing to use arbitration for resolving their differences. Usually by adding a clause to the main agreement, the parties agree and bind themselves to arbitrate potential disputes before any actual dispute arises. If the parties haven't included it in the main agreement, they can still come to an agreement through the use of a compromise deed, which must be signed by both parties and witnessed by a notary, in the event of a dispute.

An arbitration award is the outcome of resolving disputes through arbitration organizations. The arbitrator or arbitration panel is required by Law Number 30 of 1999 to issue the arbitration award no later than thirty days following the conclusion of the dispute examination. The parties have fourteen days from the date of the award to request corrections if there are administrative errors in the award. The parties are directly bound by the arbitration's final decision. Once the award is filed at the district court with the arbitrator or their designated representative, it can be put into effect. The district court's chief judge has thirty days from the time of registration to issue an order enforcing the arbitration award.

In addition to arbitration, non-litigation dispute resolution can also be done through alternative dispute resolution (ADR). ADR is a form of dispute resolution outside the court using agreed-upon procedures such as consultation, negotiation, mediation, conciliation, or expert determination, as stated in Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution, Article 1, number 10.

Dispute resolution through ADR has advantages over litigation, including voluntariness, quick procedures, non-judicial decisions, confidentiality, flexibility in determining resolution terms, time and cost savings, a high likelihood of agreement implementation, and the preservation of working relationships.

ADR institutions are divided into several types, including:

1. Consultation

Resolution through personal meetings between a client and a consultant providing non-binding legal advice.

2. Negotiation

Settlement through direct negotiations between disputing parties to reach an agreement.

3. Mediation

Intervention by a neutral third party (mediator) to assist conflicting parties in reaching a voluntary agreement.

4. Conciliation

Settlement through a conciliator or a conciliation commission actively providing solutions to disputes by facilitating discussions among conflicting parties.

What distinguishes arbitration, mediation, and conciliation? Arbitration involves a third party (the arbitrator) making a final decision that both parties commit to. Mediation also uses a third party (the mediator), but the mediator acts as a facilitator without providing opinions. While conciliation involves a conciliator who actively suggests solutions, their opinions are not binding.

Each non-litigation and litigation dispute resolution method has its own characteristics, strengths, and weaknesses. The choice of method depends on its effectiveness and benefits for the disputing parties.

Source: www.djkn.kemenkeu.go.id