A senior partner at the Karim Syah Law Firm, Firmansyah, said recently that the law had yet to adopt the internationally recognized Model Law on International Commercial Arbitration formulated by the United Nations Commission on International Trade Law in 1985 to provide a template that lawmakers in every country can adopt as part of their domestic legislation and arbitration procedures.

He also highlighted that the law was not in line with the latest trends in the industry, which was going through digitalization in many sectors.

“Fintech companies, for instance: Let’s say they have operated an average of three years. As such, it would be difficult to find arbitrators [specializing in the industry], with 15 years of experience,” he said.

In terms of dispute resolution, the 2018 World Economic Forum’s Global Competitiveness Report ranked Indonesia 46^th in the world for its efficiency of legal framework in settling disputes, making it lag behind its Southeast Asian neighbors, Singapore (first) and Malaysia (15^th).

The same report also ranked Indonesia in 26^th place in terms of how government regulations were burdensome to business. With a 4.1 score in a scale that ranges from 1 (extremely burdensome) to 7 (not burdensome at all), Indonesia must learn from its neighbors, Singapore, which ranked in first place with a score of 5.6, and Malaysia, which ranked fifth with a score of 5.0.

Firmansyah added that Law No. 30/1999 was “too technical”, adding that since many countries have adopted the model law it was high time for Indonesia to revise its arbitration law if it wanted to improve its alternative dispute resolution (ADR) system and make it internationally recognized.

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