The Use of Foreign Language in a Contract and Its Relevance on the Annulment of an Indonesian Arbitral Award

Abstract

Current Indonesian municipal law obliges the use of the Indonesian language in transaction activities, Memory of Understanding and other agreements. The choice of language in a contract between the subject of law in international commercial transactions becomes an essential tool to reach a consensus on a common intention. This, too, could become a triggering factor of conflict between the parties. This study discussed the legal implications and the possibility of using a foreign language in a contract as a reason to nullify an Indonesian arbitral award. This study elaborates the doctrinal legal research on legal norms and judicial decisions regarding the use of language and the annulment of an arbitral award. It is argued that a contract or agreement in a foreign language is valid. Furthermore, the annulment of an Indonesian arbitral award on the ground of the use of a foreign language is unjustifiable. Hence, it recommends an update on the Indonesian Arbitration Law concerning the mechanisms of the annulment of an arbitral award.