In an ideal world, disputes would be able to be resolved amicably. In practice, however, disputes are more often settled by adversarial methods such as litigation and arbitration. To offer another chance at preserving relationships, Arb-Med-Arb has emerged as a means of incorporating mediation into the arbitral process, where parties who have commenced arbitration may “pause” proceedings to attempt to settle the dispute by mediation. If unsuccessful, parties would then continue the arbitration.
In Indonesia, Arb-Med-Arb was initially developed from the use of mediation in court litigation as an effort to enhance the amicable dispute resolution process and obtain a win-win solution for all parties involved. Article 45 of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (“Indonesian Arbitration Law“) requires that on the first day of a hearing, the arbitral tribunal must attempt initiating an amicable settlement for the disputing parties. This requirement also corelates with the ethical responsibility of Indonesian lawyers based on the Indonesian Advocate Code of Ethics, which requires lawyers to uphold the use of peaceful settlement in resolving a civil dispute before going into an adversarial dispute resolution mechanism.
Although the Indonesian Arbitration Law only imposes an obligation to attempt to settle disputes amicably, parties and arbitrators often opt for mediation compared to other means of amicable dispute resolution mechanism due to the influence of local practice, which we elaborate on below.
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