Mechanism for Transition of Disputes from Arbitration to Litigation and Its Legal Consequences (Case Study of Decision Number 425 B/Pdt.Sus-Arbt/2016 Between PT Sea World Indonesia and PT Pembangunan Jaya Ancol)

Abstract

This study examines the mechanism of dispute resolution transition from arbitration to litigation and its legal consequences through a case study of Supreme Court Decision No. 425 B/Pdt.Sus-Arbt/2016 between PT Sea World Indonesia and PT Pembangunan Jaya Ancol. The dispute originated from a Build-Operate-Transfer (BOT) agreement that led to differing interpretations regarding the right to extend the management contract. The findings indicate that the shift from arbitration to litigation is permissible when procedural violations or breaches of legal principles occur, as regulated in Law No. 30 of 1999. The legal consequences include the loss of the arbitral award’s executorial power and the emergence of legal uncertainty for the parties involved.