Consumer Arbitration Agreement Template for Indonesia

This document is a standardized arbitration agreement designed for use in consumer contracts under Indonesian law. It establishes the framework for resolving disputes between businesses and consumers through arbitration, ensuring compliance with Indonesia's Law No. 30 of 1999 on Arbitration and Law No. 8 of 1999 on Consumer Protection. The agreement outlines the arbitration process, cost allocation, arbitrator selection, and enforcement provisions while maintaining accessibility and fairness for consumers. It incorporates specific Indonesian legal requirements for consumer contracts and standard clauses, making it suitable for businesses operating in the Indonesian market.

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What is a Consumer Arbitration Agreement?

Consumer Arbitration Agreements are essential legal instruments for businesses operating in Indonesia that wish to establish clear, efficient, and legally compliant dispute resolution mechanisms with their consumers. These agreements must carefully balance the rights of consumers under Indonesian Consumer Protection Law with the efficiency of arbitration as a dispute resolution method. The document provides a framework compliant with Law No. 30 of 1999 on Arbitration while ensuring accessibility and fairness for consumers. It's particularly relevant in today's digital economy where consumer transactions are increasingly complex and cross-jurisdictional. The agreement typically includes provisions for arbitrator selection, cost allocation, procedural rules, and enforcement mechanisms, all tailored to the Indonesian legal context and consumer protection requirements.

What sections should be included in a Consumer Arbitration Agreement?

1. Parties: Identification of the business entity and the consumer, including complete contact details

2. Background: Context of the underlying consumer transaction and the agreement to arbitrate

3. Definitions: Clear explanations of key terms used in the agreement, particularly technical arbitration terminology

4. Agreement to Arbitrate: The core agreement to submit disputes to arbitration, including scope of arbitrable matters

5. Arbitration Process: Step-by-step explanation of how the arbitration will be initiated and conducted

6. Selection of Arbitrator: Process for selecting the arbitrator(s) and requirements for arbitrator qualifications

7. Applicable Law: Specification of Indonesian law as governing law and relevant regulations

8. Language of Arbitration: Specification of the language to be used in arbitration proceedings

9. Costs and Fees: Allocation of arbitration costs and fees between parties

10. Confidentiality: Provisions regarding confidentiality of the arbitration proceedings

11. Enforcement: Provisions regarding the binding nature and enforcement of the arbitral award

What sections are optional to include in a Consumer Arbitration Agreement?

1. Online Arbitration Provisions: Specific provisions for conducting arbitration online, used when parties agree to virtual proceedings

2. Multi-Language Provisions: Additional provisions when documents may need to be in multiple languages, used for non-Indonesian speaking consumers

3. Class Action Waiver: Provisions preventing class action arbitration, used where permitted by Indonesian law

4. Emergency Arbitrator: Provisions for appointing an emergency arbitrator for urgent matters, used in time-sensitive consumer disputes

5. Mediation-First Requirement: Requirement to attempt mediation before arbitration, used when parties want to encourage amicable settlement

What schedules should be included in a Consumer Arbitration Agreement?

1. Schedule 1: Arbitration Rules: Detailed rules of the chosen arbitration institution (e.g., BANI Rules) or ad hoc arbitration rules

2. Schedule 2: Fee Schedule: Detailed breakdown of administrative fees, arbitrator fees, and other costs

3. Appendix A: Arbitration Request Form: Standard form for initiating arbitration proceedings

4. Appendix B: Code of Ethics: Code of ethics for arbitrators and parties during the arbitration process

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Publisher

Genie AI

Cost

Free to use

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