Nanning, 17 September 2026
The Application and Synergy of Indonesia–China Cross-Border Commercial Dispute Resolution
Tony Budidjaja
Chairman of MedArbId
(The Indonesian Academy of Independent Mediators and Arbitrators)
Opening
Distinguished guests, colleagues, ladies and gentlemen,
It is a great honor to be here today to share some thoughts on “The Application and Synergy of Indonesia–China Cross-Border Dispute Resolution.”
Introduction
Indonesia and China have developed extensive commercial and investment relationships. As these relationships continue to grow, commercial transactions are becoming increasingly sophisticated, involving new technologies, complex contractual arrangements, and new business models. Naturally, the disputes arising from these transactions are becoming more complex as well.
This increasing complexity highlights the need for effective and appropriate dispute resolution mechanisms. Effective dispute resolution is not simply about resolving disputes after they arise. It is also about giving businesses the confidence to enter into transactions, manage commercial risks, and know that meaningful remedies will remain available when disputes occur.
Arbitration has become the preferred mechanism of dispute resolution for a wide range of commercial disputes. Arbitration can be an effective mechanism for cross-border commercial disputes between Indonesian and Chinese parties, particularly where neutrality and international enforceability are important considerations. However, arbitration is not necessarily the best answer for every commercial dispute.
In long-term commercial relationships, parties may have a strong interest in resolving disputes without immediately entering into adversarial proceedings. This is where mediation becomes particularly valuable.
In my view, the future of Indonesia–China commercial dispute resolution lies in synergy rather than substitution. Mediation can help preserve commercial relationships; arbitration can provide a final and enforceable determination; and courts can provide the necessary judicial support and supervision.
Alternative dispute resolution, or ADR, should therefore not be viewed as a collection of competing mechanisms. Mediation, arbitration, negotiation, and litigation can instead be designed to operate as complementary components of an integrated dispute-resolution architecture.
From Separate Mechanisms to a Synergistic Dispute Resolution Architecture
The traditional understanding of ADR tends to place negotiation, mediation, and arbitration alongside litigation as separate alternatives. For Indonesia–China disputes, however, a more sophisticated and integrated approach may be more appropriate.
Negotiation should generally be the first step. Many Indonesia–China commercial disputes arise from relationships that are intended to continue over the long term, such as joint ventures, supply agreements, construction projects, manufacturing arrangements, distribution agreements, and investment projects. In these circumstances, a negotiated solution may have substantially greater commercial value than an adjudicated outcome. Parties can therefore be encouraged to establish contractual escalation procedures that require senior management to attempt negotiation before formal proceedings are commenced.
When negotiation is unsuccessful, mediation can become particularly valuable, especially where the parties still have an interest in preserving their commercial relationship. A mediator can help the parties move beyond their legal positions and explore practical commercial solutions. For example, rather than simply determining whether a contractor is legally responsible for a delay, mediation may result in a revised completion schedule, additional work, restructuring of payments, a price adjustment, or an agreement concerning future business.
This flexibility is one of mediation’s greatest advantages.
Arbitration becomes particularly important when negotiation and mediation are unable to resolve the dispute and the parties require a binding determination. Where cross-border enforcement is anticipated, the parties may also benefit from the framework of the 1958 New York Convention, to which both Indonesia and China are parties.
Litigation, meanwhile, should not be viewed as a failure of ADR. Courts continue to play an essential role in supporting arbitration and mediation, particularly in matters involving interim measures, evidence, recognition and enforcement, challenges to arbitral awards, and other issues that require the exercise of state authority.
The appropriate model, therefore, is not “ADR versus courts,” but rather “ADR supported by courts.”
The objective is not to require every dispute to pass through every available mechanism. Instead, parties should be able to use the mechanism that is most appropriate to the nature of the dispute and the stage at which it arises.
What Should Indonesia–China Cross-Border Dispute Resolution Focus On?
The economic relationship between Indonesia and China has several characteristics that make sophisticated and integrated dispute-resolution mechanisms particularly important.
Looking beyond the institutional framework, I believe there are three areas that deserve particular attention in developing Indonesia–China cross-border dispute resolution.
First, institutional connectivity.
Greater cooperation between Indonesian and Chinese arbitral institutions, mediation centres, courts, professional organizations, and business associations can help build greater procedural familiarity and mutual confidence.
This cooperation could take the form of joint training, institutional partnerships, judicial dialogue, professional development, and, eventually, more practical cooperation in digital dispute resolution.
Second, cross-cultural competence.
A cross-border commercial dispute is rarely only about the law. It may also involve business relationships, reputation, hierarchy, communication styles, and different expectations regarding negotiation and settlement.
For this reason, mediators and arbitrators handling Indonesia–China disputes should ideally have an understanding not only of the applicable legal framework, but also of the commercial and cultural context in which the dispute has developed.
Third, technology.
Cross-border disputes are increasingly digital. Evidence may exist entirely in electronic form, proceedings may be conducted online, and artificial intelligence may increasingly assist various aspects of legal proceedings.
These developments have the potential to make dispute resolution more accessible and efficient. At the same time, however, they raise new legal and procedural questions.
The important point is that technology should improve the operation of the dispute-resolution system without weakening its fundamental legal safeguards.
Conclusion
To strengthen Indonesia–China commercial relations, it is important to develop a dispute-resolution system in which courts, arbitration, and ADR mechanisms do not operate in isolation, but instead complement and support one another.
Ultimately, the goal is to create a dispute-resolution framework that gives businesses confidence—not only that their disputes can be resolved, but that they can continue to do business with certainty, efficiency, and trust.
The central question, therefore, is how different dispute resolution mechanisms can work together to create a system that is efficient, enforceable, commercially sensible, and responsive to the legal and cultural characteristics of both jurisdictions.
Thank you.
