The BANI Regulation 2025: What Practitioners Need to Know
The BANI Regulation 2025: What Practitioners Need to Know
As has been widely discussed, in early 2025 the Indonesian National Arbitration Board (“BANI”) officially issued the latest Arbitration Rules and Procedures to be used as a guidelines for dispute resolution at BANI. The BANI Regulation 2025 highlighted several key issues, including BANI’s authority in cases of Unlawful Acts (Torts), the expansion of the limitations on legal counsel practicing at BANI, the new concept of consolidation of arbitration applications, the arbitrator replacement, and the emergency arbitration. These concepts were certainly added and/or modified in the BANI Regulation 2025 with the aim of ensuring their effective implementation and enforceability, thereby supporting the continued advancement of arbitration practice within BANI. Therefore, the author will briefly outline several things that legal practitioners should pay attention to regarding the BANI Regulation 2025.
BANI’s Authority in Cases of Unlawful Acts (Torts)
Previously, there was still a debate regarding BANI’s position in handling non-contractual disputes, namely disputes regarding Unlawful Acts. Currently, Article 2 paragraph (1) of BANI Regulation 2025 expressly states that BANI has the authority to resolve non-contractual disputes if the parties agree in a written agreement. The relevant provision reads as follows:
Article 2 paragraph (1) of BANI Regulation 2025:
“If the parties to a commercial agreement or not have agreed in writing that their disputes shall be referred to arbitration before BANI or BANI Arbitration Center or under the Rules of BANI, then such dispute shall be settled under the administration of BANI in accordance with these Rules, subject to such modifications as the parties may agree in writing, so long as such modifications do not contradict with the mandatory law or the policies of BANI.”
The Expansion of the Limitations on Legal Counsel’s Practicing at BANI
BANI Regulation 2022 (the previous regulation) stipulates that foreign legal counsels must be accompanied by Indonesian legal counsels in arbitration cases subject to Indonesian law. However, Article 5 paragraph (2) of BANI Regulation 2025 stipulates that in all arbitration cases at BANI subject to Indonesian law or any other law, foreign legal counsel’ must be accompanied by Indonesian legal counsels.
Article 5 paragraph (2) of BANI Regulation 2022:
“However, if a party is represented by foreign advisor(s) or foreign legal advisor(s) in an arbitration case relating to dispute subject to Indonesian law, the foreign advisor(s) or the foreign legal advisor(s) may attend the arbitration proceedings only if he is accompanied by the Indonesian advisor(s) or legal advisor(s).”
Article 5 paragraph (2) of BANI Regulation 2025:
“However, if a party is represented by foreign advisor(s) or foreign legal advisor(s), the foreign advisor(s) or the foreign legal advisor(s) may attend the arbitration proceedings only if they are accompanied by Indonesian advisor(s) or legal advisor(s).”
The New Concept of Consolidation of Arbitration Applications
In Article 9 paragraph (1) of the BANI Regulation 2025, it is stipulated that an arbitration request can be submitted against multiple parties (including parties outside the agreement) as long as the relationship between the parties in question can be proven. Furthermore, in Article 9 paragraph (2) of the BANI Regulation 2025, a merger can be submitted against more than one agreement as long as the agreements are related and all the agreements in question choose BANI or BANI Rules as the dispute resolution forum. Furthermore, Article 9 paragraph (3) of the BANI Regulation 2025 provides an opportunity for third parties outside the agreement to join the arbitration process with provisions that must be considered as stated in the article.
Article 9 of BANI Regulation 2025:
“1. The Request of Arbitration by Many Parties
Subject to article 11 para. 4., the request for arbitration may be submitted by and/or many parties, as long as the existence of the connection between them are sufficiently proven.
2. The Request of Arbitration with Many Agreements
Disputes arising in relation to more than one agreement may be submitted in a single request for arbitration as long as there is a connection between the agreements and BANI or BANI Rules is chosen as forum for the settlement of disputes by the all agreements.
3. The Participation of Third Party
The third parties as the non-parties in the arbitration agreement may participate and join in the process of arbitration if there is an element of interests involved and their involvement are agreed by the parties and approved by the arbitration tribunal.”
The Arbitrator Replacement
In BANI Regulation 2025, there is a possibility of replacing an arbitrator if he does not carry out his duties properly.
Article 13 paragraph (3) of BANI Regulation 2025:
“When an arbitrator is default in his duty de jure and de facto and on the basis of the judgment the Chairman of BANI that the said arbitrator cannot perform his duty, the procedure in relation to the recusal and the replacement of an arbitrator shall be made in accordance to Article 12.”
The Emergency Arbitration
Emergency Arbitration is regulated under Article 17 paragraph (5) of BANI Regulation 2025 and Attachment I on Emergency Arbitration Rules of BANI Regulation 2025. In relation to the emergency arbitration, it is worth exploring in greater depth the implementation and application of emergency arbitration in practice.
Article 17 paragraph (5) of BANI Regulation 2025:
“A party that needs urgent interim or conservatory measures prior to the constitution of the arbitration tribunal may apply for emergency arbitration pursuant to the Emergency Arbitration Rules as attached in Attachment 1.”
Bibliography:
– BANI Rules 2025.
Authored by King Kin Maharani (kingkin@fwp.co.id)
This article is intended to provide a broad summary and general information on certain recent legal developments in Indonesia. It is not intended to constitute legal advice, nor should it be treated as such. FWP disclaims any responsibility or liability for any inaccuracies, interpretations, or omissions contained in this article. For any specific legal concerns or actions that may impact your legal rights and responsibilities under Indonesian law, it is highly recommended that you seek advice from a qualified Indonesian legal professional.