The issue of ultra petita in arbitration has sparked ongoing discussion among legal practitioners, particularly regarding its implication in the annulment of arbitral awards. This article provides a comprehensive review of how Indonesian jurisprudence interprets ultra petita as a potential ground under the Indonesia Arbitration Law.
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Annulment of an Arbitral Award
An arbitral award may be subject to a legal remedy of annulment, which is filed to the Chief of District Court within a period of 30 (thirty) days from the date the arbitral award is delivered and registered with the District Court. Article 70 of Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution (“Arbitration and ADR Law”) jo. Article 24 paragraph (4) of the Supreme Court Regulation Number 3 of 2023 on the Appointment of Arbitrator by Court, Repudiation Rights, Examination on the Enforcement and Annulment Petition of Arbitral Awards (“Supreme Court Reg. on Arbitration”), has regulated three reasons that are the basis for annulling an arbitral award, in short, a fake letter submitted during the examination, a document that determines that it is hidden by the opposing party or a trick carried out by one of the parties.
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The aforementioned provisions have implicitly provided a limitation on the grounds upon which a petition for annulment of an arbitral award may be filed. This indicates that, the grounds for filing a petition for annulment of an arbitral award should only be limited to the three reasons mentioned above. Whereas when referring to the provisions of those articles, it can be understood that the review of an annulment petition shall only concern the procedural aspect of the issuance of the arbitral awards. Consequently, assessment and/or examination of an arbitral award annulment petition by the court cannot be directed at the subject matter of the dispute that has been considered by the arbitral tribunal.
Despite having clear provisions, under both the Arbitration and ADR Law, along with the Supreme Court Reg. on Arbitration, in practice, however, petitions for annulment of an arbitral award may request something outside of the three grounds as mentioned above.
“Assessment and/or examination of an arbitral award annulment petition by the court cannot be directed at the subject matter of the dispute that has been considered by the arbitral tribunal.”
Annulment of Arbitral Award on the Ground of Ultra Petita
It should be noted that an arbitral award, in principle, must neither contain nor render upon matters beyond what has been claimed by the parties involved. This is consistent with the non ultra petita legal principle as may also be seen under Article 178 of the Herzien Inlandsch Reglement (HIR), which essentially prohibits judges from ruling on matters that were not claimed or from granting more than what was requested.
When an award granted something outside of what had been requested, what legal remedy is possible? In other words, can ultra petita be used as a reason for annulling an arbitral award?
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In principle, a petition for annulment of an arbitral award filed on grounds other than the three reasons stipulated under the Arbitration and ADR Law, as well as the Supreme Court Reg. on Arbitration, should not be deemed valid for such annulment. Particularly, in the context of an allegation that an arbitral award contains ultra petita, in fact, through the provisions of Article 70 of the Arbitration and ADR Law have limited the previous provisions regulated in Article 643 Reglement op de Recthvordering (“Rv”) which provide an opportunity for annulling an arbitral award if the arbitral award contains something that is not claimed or more than what is claimed (ultra petita). The provisions of Rv have been revoked by the Arbitration and ADR Law.
Therefore, given the existence of a clear limitation on the grounds for submitting a petition for annulment of an arbitral award, how will the court, in practice, assess the petition when an annulment is filed on the basis that the arbitral award contains ultra petita?
“Violation of non ultra petita principle does not fall on the reasons to annul an arbitral award.”
PT. Asuransi Umum Bumiputera Muda 1967 v. PT. Bank Pembangunan Daerah Sumatera Selatan dan Bangka Belitung, Jurisprudence Number 585 B/Pdt.Sus-Arbt/2016 jo. 173/Arb.Btl/2015/PN.Plg
In this case, the Claimant essentially filed an annulment petition over an arbitral award before the Palembang District Court. Whereas the issue in this petition is that the Claimant based the petition for annulment on the allegation that the arbitral award contained an element of ultra petita.
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The Claimant argues that ultra petita, although not included among the grounds set forth in Article 70 of Arbitration and ADR Law, could nonetheless serve as a valid basis for the annulment of an arbitral award, as stated in the following, that:
“… however, an arbitral award may also be filed for annulment to the Chief of District Court, in addition to the grounds for annulment outside the provisions of Article 70 of Law Number 30 of 1999;”
The petition was, however, rejected at the first level of court through Decision Number 173/Arb.Btl/2015/PN.Plg, which was subsequently appealed to the Supreme Court, wherein Judex Juris in Decision Number 585 B/Pdt.Sus-Arbt/2016 considers:
“Judex Facti did not make a mistake in applying the law, it turns out that the reason for the request to annul the arbitral award in the a quo decision regarding ultra petita, these reasons are not included as referred to in the Provisions of Article 70 of Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution.”
“… the District Court’s consideration was appropriate and correct on the grounds that the Claimant could not prove the elements referred to in Article 70 of Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution that could annul the National Board of Arbitration (Badan Arbitrase Nasional) Award.”
“In any manner, the court has no authority to declare or assess whether or not an arbitral award does indeed contain the element of ultra petita.”
The Court’s Authority in Assessing a Petition for Annulment of an Arbitral Award that is Ultra Petita
The court in assessing the a quo petition has clearly determined that a petition for annulment of an arbitral award cannot be filed based on reasons beyond what is stipulated under Article 70 of the Arbitration and ADR Law, which is also subject to the provisions under Article 24 paragraph (4) of the Supreme Court Reg. on Arbitration. In this regard, the court also established that the Claimant has failed to prove the existence of any of the elements set out under the provisions.
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Whilst the court in PT. Asuransi Umum Bumiputera Muda 1967 v. PT. Bank Pembangunan Daerah Sumatera Selatan dan Bangka Belitung, may have established its clear standing in assessing a petition for annulment of an arbitral award that is allegedly ultra petita, in practice, however, there are still annulment petitions on the grounds of ultra petita that are nevertheless ended up being granted by the court.
PT. HK Realtindo v. Badan Arbitrase Nasional Indonesia (BANI), etc., Jurisprudence Number 665 B/Pdt.Sus-Arbt/2024 jo. 524/Pdt.Sus-Arb/2023/PN Jkt.Tim
In this annulment petition of an arbitral award, the Claimant has argued, among other things, that the Arbitral Tribunal has rendered an arbitral award that is ultra petita. The Claimant essentially states that the award, which solely orders the Claimant to bear the damages, constitutes an award that is ultra petita. Whereas in the a quo arbitration case petition, the bearers of damages should also be addressed to Co-Respondent II.
Against such claim, the Judex Facti, in its legal consideration, argues that:
“Considering that based on… evidence proving that there has been cooperation between the Claimant and Co-Respondent II…, therefore the Arbitral Tribunal award… has rendered an award that is ultra petita, and therefore the Arbitral award must be annulled;”
The granted arbitral award annulment, was subsequently appealed by the Respondents. Although ultra petita was not discussed further, Judex Juris in its decision did not refute the previous Judex Facti’s considerations, and instead upheld the first level decision.
Nevertheless, it should be understood that, notwithstanding the Panel of Judges’ consideration in PT. HK Realtindo v. Badan Arbitrase Nasional Indonesia (BANI), etc., in any manner, the court should not have the authority to declare or assess whether or not an arbitral award does indeed contain the element of ultra petita, even if it was factually true that the arbitral award in question exceeded the scope of the relevant parties’ claims. The court should be bound to respect the final and binding nature of an arbitral award and provide legal certainty arising therefrom. As when referring to Article 62 paragraph (4) of the Arbitration and ADR Law, in the context where the court assesses a petition for enforcement when one party fails to comply with the award voluntarily, it was stipulated that the court “shall not examine the reasons or considerations underlying the arbitral award.”
Author
Dr Eddy Marek Leks, FCIArb, FSIArb, is the founder and managing partner of Leks&Co. He has obtained his doctorate degree in philosophy (Jurisprudence) and has been practising law for more than 20 years and is a registered arbitrator of BANI Arbitration Centre, Singapore Institute of Arbitrators, and APIAC. Aside to his practice, the author and editor of several legal books. He led the contribution on the ICLG Construction and Engineering Law 2023 and ICLG International Arbitration 2024 as well as Construction Arbitration by Global Arbitration Review. He was requested as a legal expert on contract/commercial law and real estate law before the court.
Co-authored
Miskah Banafsaj is an associate at Leks&Co. She holds a law degree from Universitas Indonesia. Throughout her studies, she was actively involved in student organizations and participated in various law competitions. She has also previously worked as an intern at several reputable law firms. At this firm, she is involved in doing legal research, case preparation, and assists with ongoing matters.
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Sources:
- Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution.
- Supreme Court Regulation Number 3 of 2023 on the Appointment of Arbitrator by Court, Repudiation Rights, Examination on the Enforcement and Annulment Petition of Arbitral Awards.
- Reglement op de Rechtvordering
- Herzien Inlandsch Reglement;
- Supreme Court Decision Number 585 B/Pdt.Sus-Arbt/2016;
- Supreme Court Decision Number 665 B/Pdt.Sus-Arbt/2024;
- Palembang District Court Decision Number 173/Arb.Btl/2015/PN.Plg
- South Jakarta District Court Decision Number 524/Pdt.Sus-Arb/2023/PN Jkt.Tim
