Jakarta crisis halts arbitration plans

Plans to open an international arbitration centre in Indonesia have suffered a set-back as Jakarta-based western lawyers continue to pull out of the crisis-racked country.

Nick Stone, an insurance and arbitration specialist and a recent recruit to Herbert Smith's Singapore office as senior consultant, had hoped to set up an arbitration centre based on the Hong Kong arm of the Chartered Institute of Arbitrators.

Stone said that 10 Jakarta-based fellows or associates of the institute met in February

to explore the possibility of setting up the centre.

However, by the end of March, four had left the country due to the construction and financial services industry being “decimated”.

Stone said any timetable for further progress was reliant on stability returning to the Indonesian economy, but he believed that with the IMF scrutinising the country's court system, the time was right to raise the profile of international arbitration there.

Jakarta already boasts an arbitration centre called BANI, that holds both domestic and international arbitrations.

It is only now starting to build up an international panel – appointing US lawyer Karen Mills from Jakarta firm KKSM. But it is understood there has never been an international arbitration award enforced in Indonesia.

Other jurisdictions are also interested in attracting international arbitration.

Lawyers in the Philippines set up the Philippine Dispute Resolution Centre in July 1996, and the Singapore International Arbitration Centre is seeing an increase in the number of international arbitrations it holds.