Dispute Resolution Model of Construction Work Contract: A Case Study In Indonesia

Abstract

The complexity of the construction industry causes the potential for construction disputes to be very large and cannot be avoided. There have been many methods of resolving construction contract disputes, but the resolutions still cause losses to the conflicting parties, both financially and non-financially. Thus, it is necessary to explain the construction work contract dispute resolution model in Indonesia that reflects the win-win solutionprinciple, and propose an ideal dispute resolution model of construction work contract. Considering that a construction work contract dispute arises as a result of an escalation of disagreements, a dispute resolution should be done quickly, without harming each other. Based on the common goals of the parties to the contract, this study is adequate to use the contract normative legal method. This study yields two conclusions. First, the dispute resolution model of construction work contracts still reflects the win-win solutionprinciple (which consists of mediation, conciliation, and dispute council) in a narrow sense. The resolution only produces suggestions and does not have binding force and is not final, even though the construction sector which basically has a high business risk really needs a quick resolution and can be complied with by all parties in the construction work contract. Second, the ideal dispute resolution model of construction work contract in Indonesia is sufficient to use arbitration in a broad sense, that is, arbitration that accommodates mediation and conciliation, but the results are still final and binding. It is recommended to remove the word "court" in the explanation of Article 47 paragraph (1) letter (h) of the Construction Services Law, as well as adopt a compromise on the revocability doctrine and its exceptions and ratify the New York Convention in 2015 in the 1999 Arbitration Act.