What Are The Advantages and Disadvantages of Arbitration?

ARbitrage advantage disadvantage

Arbitration is one way of dispute resolution that is often taken by businesspeople in Indonesia. To that end, this article will discuss the advantages and disadvantages of arbitration. Dispute resolution through arbitration has several advantages, namely,

  1. Can be processed quickly.

Settling disputes through arbitration may prevent both disputing parties from the delays that caused by procedural and administrative things. The arbitration procedure is not complicated. The decisions also can be achieved in a relatively short time. The length of time of the arbitration agreement shall be determined by the parties involved. If it is not, it will be determined by the Arbitral Tribunal. In addition, the arbitration decision is final and binding, so there is no possibility of any other remedies, such as appeal or cassation.

  1. Inspection by experts in the field.

The parties involved in a dispute can choose their own arbitrary which is they consider to have in-depth knowledge, as well as control of the disputed case. Thus, the quality of the case to be considered can be accounted. In addition to legal experts, in an arbitration institution, there are also experts in other fields, such as banking, leasing, and chartering.

The investigation of the dispute is done in a closed session by the arbitral panel. The decision handed down in a closed session almost never published. Therefore, the confidentiality of the client’s disputes is guaranteed. In addition, the parties concerned may also determine the choice of law, the process, and the place of the arbitration proceeding to resolve the case.


advatages and disadvantages

Some of the advantages above are what makes many businesses choose arbitration to resolve their problems. Unfortunately, despite the advantages above, arbitration also has disadvantages. Here are some of the arbitration disadvantages you need to know.

  1. Implementation of execution depends on the court.

Because of the institutionalization which is a pseudo-court, the execution of the arbitral award requires the help of the court. Therefore, before being implemented, the result of the arbitration decision must first be submitted to the district court. In this case, the institution does not have an attempt to impose arbitration on the parties to the dispute. The arbitration decision can only be effectively implemented if both parties have good faith to resolve the problem.

  1. The execution of the arbitral award may ultimately be constrained

Basically, arbitration can only rely on business ethics. If one party lacks business ethics, this may result in delayed execution. Usually, losers will not accept and will fight in various ways, for example by stalling time or filing a lawsuit cancellation.

  1. The results of international arbitration institution are sometimes problematic.

Problems in settlement by international arbitration have obstacles, specifically the recognition and implementation of its decisions. Sometimes, in the losing country, there are rules that clash with the arbitration decision. Therefore, the successful implementation of the arbitral award depends on how the regulations in each of the disputing countries.

Those are some of the advantages and disadvantages of arbitration. Arbitration can be the best solution for dispute settlement as long as both parties involved have a commitment and honesty. On the other hand, arbitration will not cause any other problems if the parties involved, especially the losers, break the agreement and take legal action.


Source : Arbitration Lawyer Indonesia

BP Lawyers can assist you

We can assist you in providing the best solution to the problems or disputes related to contracts, settlement through the arbitration process and the general judiciary. You can contact us by:

E: ask@bplawyers.co.id

H: +62821 1000 4741


Leave a Reply

Your email address will not be published. Required fields are marked *