Challenging Arbitral Awards in the Construction Industry: Case Study of Infrastructure Disputes

Abstract

A construction project involves many parties such as the employer, the consultants, the contractors, the subcontractors, and the suppliers. With so many parties involved, construction disputes may arise during project execution. These disputes may be settled either through a court or outside-the-court mechanism. One of the most common outside-the-court mechanisms used in construction contracts is arbitration. In arbitration, an award would be final and binding for both parties in a dispute. However, some circumstances may arise that are capable of challenging the award through the court (certiorari). Therefore, this research intends to identify the circumstances for challenging arbitral awards in the Indonesian construction industry with regard to infrastructure disputes. This research was carried out mainly through documentary analysis of Indonesian laws and regulations as well as a case study of Indonesian court verdicts on the related issue. This research found several circumstances for setting aside arbitral awards and explored the situation of arbitral award enforcement in Indonesia. With the growing popularity of arbitration as a dispute resolution mechanism, this research is expected to would provide a guideline to parties in dispute on challenging the arbitral award when they need it.