A Reflection to Indonesia’s Court-Ordered Mediation

A Reflection to Indonesia’s Court-Ordered Mediation

In 2015, the Singapore International Arbitration Centre (SIAC) and the Singapore International Mediation Centre (SIMC) issued an Arb-Med-Arb (AMA) Protocol, which sought to synergize arbitration process with mediation process organized by the respective institutions.

The AMA Protocol essentially provide that if the parties agree, an arbitration proceeding submitted to SIAC would start off with the parties undergoing mediation process administered by SIMC. Should mediation fail (or partially fail), arbitration proceeding would proceed as usual. But should it succeed, their mediated settlement would be recorded by the arbitration tribunal as a “consent award”, having the same enforceability as SIAC’s arbitral award.

In terms of Alternative Dispute Resolution mechanism, the move taken by SIAC and SIMC may be seen as breakthrough; when mediation and arbitration are governed as part of a dispute resolution, parties would usually regard them as separate processes. With the AMA Protocol, mediation is in itself a part of the arbitration process.

Notwithstanding its novelty in the Alternative Dispute Resolution regime, the AMA Protocol feels all too familiar if we compare it with our Indonesian civil procedure law (hukum acara perdata). Since the Dutch colonized our land to today, mediation is in one way or another, a part of our civil litigation process.

Article 154 RbG and Article 130 HIR (both our civil procedure law code) require the court to reconcile the parties in a civil dispute; since 2002, our judiciary bodies have interpreted that reconciliation among the parties should be done through a mandatory mediation process (court-ordered mediation). The court-ordered mediation process is currently regulated under Supreme Court Regulation No. 1 of 2016 regarding Mediation Procedure in Court (PerMA 1/2016).

Virtually all civil dispute submitted to an Indonesian court must first go through a maximum-30 plus 30 days of court-ordered mediation. If mediation fails, the litigation process will proceed as usual. If mediation is successful, the parties and mediator would execute a settlement agreement (kesepakatan perdamaian) or if partially successful, a partial settlement agreement (kesepakatan perdamaian sebagian). The parties then have the option to strengthen the enforceability of the settlement agreements by requesting the court to incorporate it as a settlement deed (akta perdamaian), which has the same executorial force as a final and binding court decision. In a way, doesn’t this sound similar to the AMA Protocol?

While our court’s mediation ‘tradition’ may be older than that of the AMA Protocol, it is not the wiser. Court-ordered mediation is still greatly undervalued; attorneys and legal counsels are often uneager to push the settlement of claim through mediation. Clients and disputing parties (sometimes, being influenced by their attorneys or legal counsels) are reluctant to open themselves to discussions in a mediation for fear that it gives an implied message that they are weak. Court-ordered mediators sometimes lack the competence and or most times indifferent to reaching an amicable settlement for the dispute.

As a result, statistics show an extremely low rate of civil disputes being resolved through court-ordered mediation. By median, the success rate of court-ordered mediation from 2013 to 2016 is less than 15%. Even in 2014, the Supreme Court Annual Report indicated that only 5.3% of civil disputes were successfully resolved through mediation.

Of course, efforts to promote court-ordered mediation by our judiciary bodies should be appreciated. The culmination of PerMA 1/2016 is in itself an applaudable achievement; for example, it put emphasis on undergoing mediation with good faith, failing of which may result in the revocation of claim or obligation to pay for mediation cost.

PerMA 1/2016 also requires the direct presence of the disputing parties, not merely their attorneys, in the mediation process. This could give mediators more room to understand the underlying interests of the parties, the commercial solution that could be mutually agreed and pave way to repairing the relationships of the disputing parties.

But beyond upgrading the regulatory framework of court-ordered mediation, active role from relevant parties are equally or more crucial; attorneys and legal counsels should be more serious in advising their clients to consider the benefits of settling the dispute through court-ordered mediation. Court-ordered mediators must be incentivized and trained to be more competent in handling the mediation process.

Even, law schools may need to revisit their curriculum to ensure that mediation (including court-ordered mediation) is given more spotlight. While Indonesian law schools normally hold ‘moot competition’ (fictional case simulation competition) for court proceedings, arranging moot competition focused on mediation process may also be another alternative to stimulate student’s interest and awareness.

Singapore and the rest of the world are confidently setting their eyes to mediation as the century’s most effective way to resolve a dispute. Aside from the conclusion to the AMA Protocol by SIAC and SIMC, the growing global recognition of mediation is also apparent from the efforts of Working Group II of the United Nations Commission on International Trade Law (WG II UNCITRAL) to draft a convention on the enforcement of international settlement agreement resulting from mediation.

In their 68th session last February, WG II UNCITRAL published their updated draft of the convention, which stated in its preamble that mediation is “increasingly used in international and domestic commercial practice.”  When the world is starting to put more trust to mediation, shouldn’t we do the same, especially with ourcourt-ordered mediation?

Theodore M. Amarendra

Senior Associate RAH & PARTNERS LAW FIRM


This article is intended strictly informational purposes. It is not intended as a legal advice or to solicit any business. You should not take, or refrain from taking, any legal action based upon the information contained in this article without first seeking professional counsel.