BANI dan BANI Pembaharuan

On 8 September 2016, BANI Pembaharuan or Renewed BANI was launched in Indonesia. Its name is very
similar to that of the already existing arbitration center, BANI (Badan Arbitrase Nasional Indonesia).

BANI Pembaharuan claims that it is actually a transformation of the existing BANI. According to BANI
Pembaharuan, the original BANI was 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.

In rebuttal, as explained in their media announcement dated 15 September 2016, the board of the
original BANI does not recognize BANI Pembaharuan and has stated that BANI Pembaharuan is
unlawfully using its name.

The board of the original BANI also insisted that although nothing in the law requires BANI to have a
legal entity status, it is an institution that has articles of association/statute, an organization structure
and a working plan like a normal organization.

The board of the original BANI also argued that BANI has gained international recognition.

It was among the initiators of regional forums such as the Asia Pacific Regional Arbitration Group and
Regional Arbitral Institutes Forum. It is also a member of the International Council for Commercial
Arbitration.

Given BANI 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.

Each side started multiple proceedings against the other after BANI’s board stated in September 2016
that it does not recognize the Renewed BANI.

The skirmishes were kicked off by the Renewed BANI in the South Jakarta District Court where an
unlawful act action was brought against BANI’s governing board members. The Renewed BANI sought
declarations that, in effect, it is BANI’s true successor and as such, it is entitled to both the name and
BANI’s premises.

Not long afterwards, BANI hit back and filed an administrative suit against the Renewed BANI at the
Jakarta State Administrative Court. The suit claimed that the Renewed BANI was illegitimately using the
contested acronym.

BANI was successful in the dispute settled in Jakarta State Administrative Court, and BANI
Pembaharuan prevailed in the South Jakarta District Court.
 In June 2017, the Renewed BANI commenced separate proceedings in the Commercial Court seeking
cancellation of the existing BANI trademark in the name of BANI. Appeals have followed and a new
Commercial Court action is now pending. If all appeals are exhausted by the respective claimants, the
relevant proceedings could potentially continue for several years.

Where does this leave BANI’s users?

As different courts have reached different conclusions on similar issues, BANI’s users have been left in
the same uncertain situation as they were in a year ago. As such, our original BANI recommendation
remains the same.

Please refer to our expert legal insights, “Will the real BANI please stand up? A fork in the road for
arbitration in Indonesia?”

In the absence of a voluntary settlement, legislative intervention should be urgently considered by the
Indonesian government in light of the potential adverse consequences to Indonesia’s attractiveness as a
dispute resolution forum. Until the matter is resolved, question marks remain over both the status of
arbitration proceedings under the auspices of either institution and the validity of any awards.

The following table summarises the current state of proceedings involving BANI and BANI-P.

Court Nature and summary of claim Status

 Civil claim brought by BANI-P against BANI

 Decision in favour of BANI-P
 Claim for, amongst others, unlawful act and
South Jakarta declaration that BANI-P (and not the current  Appeal filed by BANI sometime in
District Court administrators of BANI) is the legitimate and August/September 2017; currently
valid successor of the original founders of awaiting decision of the High Court.
BANI

 Decision in favour of BANI

 Administrative claim brought by BANI against  Appeal filed by BANI-P with the State
BANI-P Administrative High Court which has
Jakarta State
reversed the decision of the court of
Administrative  Petition to nullify the decision of the Ministry first instance.
Court of Law and Human Rights acknowledging and
registering the constitution of BANI-P  Cassation filed by BANI in early
January 2018; currently awaiting
decision of the Supreme Court.

Commercial Court  Trademark infringement claim brought by  Decision in favour of BANI

(Central Jakarta) BANI against BANI-P
  According to BANI, no appeal was
filed against the decision of the
 Petition to declare BANI as the rightful
Commercial Court which therefore
trademark holder of the name “BANI”
becomes valid and binding as of 31
October 2017

It is understood that BANI has filed a Kasasi (Supreme Court appeal) against the decision of the State
Administrative High Court in early 20181.

What next?

Given the likely long-term uncertainty of this dispute, for users of arbitration in Indonesia, our outlook
and recommendations as set out in our initial report and in our Keris Book (Guide to Dispute Resolution
and Governing Law Clauses in Indonesia Related Contracts) remain unchanged. In summary, a cautious
approach should be adopted and2:

 for arbitration agreements concluded before the establishment of BANI-P, it is prudent for the
time being, to construe this as reference to the original BANI.

 for arbitration agreements concluded after the establishment of BANI-P, consider the parties’
knowledge and intentions at the time the contract was executed. Additional wording may need
to be agreed before commencing arbitration with either institution in order to insulate any
award issued from potential enforcement challenges premised on the dispute between the two
institutions.

 for new arbitration agreements, consider – where possible – the use of alternative rules and
institutions so as to avoid the uncertainties. Where parties are contemplating the use of
domestic industry-specific institutions, specialist legal advice should be sought.

Kesimpulan

Untuk menghindari kebingungan mengenai pemilihan di antara dua BANI, maka agreement yang dibuat
sebelum adanya BANI Pembaharuan sudah menegaskan bahwa yang dipilih pihak berperkara adalah
BANI Mampang. Namun, setelah ada BANI Pembaharuan, para pihak harus jelas menentukan di mana
mereka ingin beracara supaya menghindari adanya perselisihan di awal ketika salah satu pihak hendak
mengajukan permohonan arbitrase.3

Sebaiknya, pasca pembentukan "BANI Pembaharuan", sebelum membuat kontrak, para pihak
seharusnya sudah sepakat dan menentukan dengan tegas institusi arbitrase mana yang dimaksud,
"BANI" atau "BANI Pembaharuan”4.

1 https://www.lexology.com/library/detail.aspx?g=855c1d87-2c89-4cbb-b1e3-6f3bbecded70
2 Ibid.
3 http://www.hukumonline.com/berita/baca/lt581736de5a3d2/lawyer-serahkan-pemilihan-bani-ke-para-pihak-
berperkara
4 Ibid.
Tapi perlu dipertimbangkan juga kemungkinan kalau nama "BANI Pembaharuan" harus diubah menjadi
nama lain karena bisa saja nama tersebut dipermasalahkan oleh BANI selaku pemegang merek "BANI".
Kalau terjadi hal seperti ini, maka para pihak juga harus mengubah klausul arbitrasenya 5.

5 Ibid.