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Legal Updates | BANI Duality: Between the "Original" and the "Renewed" One

On 8th September 2016, BANI Pembaharuan or Renewed BANI was launched in Indonesia. Its name is very similar to that of the already existing arbitration centre, BANI (Badan Arbitrase Nasional Indonesia). Up to now, BANI has been regarded as the most prominent Indonesian arbitration institution.

BANI Pembaharuan claims that it is actually a transformation of the existing BANI. According to BANI Pembaharuan, the original BANI were based on a statute that stipulates that the original BANI founders have the authority to appoint the governing board of BANI. However, by 2015, all of the original BANI founders had passed away and BANI Pembaharuan initiators felt the need for BANI to improve the governance of the institution by, among other things, ensuring its status as a legal entity. They also added that BANI Pembaharuan has asked the original BANI to unify but acknowledged that they have not reached an agreement on the terms of the unification. BANI Pembaharuan further claims that its status as a legal entity has been approved by the Minister of Law and Human Rights.

Given BANI's duality, parties whose existing arbitration clause refers to BANI and intend to choose BANI as their dispute resolution forum should take legal advice on the possible consequences if they refer a dispute to BANI.

Hadiputranto, Hadinoto & Partners, Member of Baker & McKenzie International - 30th September 2016

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Indonesia Snapshot

Capital: Jakarta
Population: 259 million (2016)
Currency: Indonesian Rupiah
Nominal GDP: $936 billion USD (IMF, 2016)
GDP Per Capita: $3,620 USD at Current Prices (IMF, 2016)
GDP Growth: 5.0% (2016)
External Debt: 36.80% of GDP (BI, Q2 2016)
Ease of Doing Business: 91/190 (WB, 2017)
Corruption Index: 90/176 (TI, 2016)