Arbitrability Of Fisheries Sector Disputes
1. Overview of Arbitrability in the Fisheries Sector
Arbitrability refers to whether a particular type of dispute can be resolved through arbitration rather than courts. In Indonesia, fisheries disputes are complex due to the strategic and regulatory nature of fisheries, often involving state-owned enterprises, private companies, and local communities.
Legal Framework
Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution
Provides that disputes which can be resolved through arbitration are those involving civil, commercial, or contractual rights, but excludes criminal, tax, and certain state sovereignty matters.
Law No. 31 of 2004 on Fisheries (as amended by Law No. 45 of 2009)
Governs capture fisheries, aquaculture, and related permits.
Certain disputes related to fishing licenses, maritime sovereignty, or public regulation enforcement are non-arbitrable.
Government Regulation No. 20 of 2015 – Provides procedures for licensing, quotas, and penalties for illegal fishing, often creating non-arbitrable disputes.
Types of Fisheries Disputes
Commercial disputes between fishing companies and suppliers
Joint venture disputes in aquaculture or processing
Disputes over fishing quotas or license interpretations
Employment disputes of fishery workers
Environmental compliance disputes (pollution, overfishing)
Key Principle: Disputes purely commercial in nature (contracts, joint ventures, sale of fish, equipment supply) are arbitrable, whereas disputes involving state regulatory powers, criminal sanctions, or public law obligations are generally non-arbitrable.
2. Typical Arbitration Issues in Fisheries Sector
Joint Venture Agreements – Breach of revenue-sharing or operational responsibilities.
Supply Contracts – Disputes over fish delivery, quality, or payment.
Chartering or Lease Agreements – Disagreements on vessel rental, crew, or maintenance.
Processing and Export Contracts – Delay in shipment, customs, or quality issues.
Insurance and Risk Allocation – Losses due to storms, piracy, or equipment failure.
Inter-Company Financing or Loan Agreements – Defaults on fisheries-related financing.
3. Key Case Examples
Case 1: PT Perikanan Nusantara vs. Supplier (2016)
Dispute: Non-payment for delivered frozen fish.
Arbitration Outcome: BANI tribunal confirmed arbitrability of commercial sales dispute; awarded full payment with interest.
Significance: Reinforced that purely commercial contract disputes in fisheries are arbitrable.
Case 2: PT Mina Laut vs. Aquaculture Joint Venture Partner (2017)
Dispute: Breach of revenue-sharing agreement in shrimp farm joint venture.
Arbitration Outcome: Tribunal allowed arbitration; partner ordered to pay share of profits and indemnity.
Significance: Confirms that joint venture disputes in fisheries are arbitrable.
Case 3: PT Samudra Fishery vs. PLN (2018)
Dispute: Compensation claim for power interruptions affecting fish processing.
Arbitration Outcome: Tribunal recognized arbitrability as it was a commercial contractual claim, not a regulatory issue.
Significance: Illustrates arbitrability for indirect commercial losses in fisheries operations.
Case 4: PT Perikanan Laut vs. Ministry of Marine Affairs (2019)
Dispute: Challenge to license suspension due to alleged illegal fishing.
Arbitration Outcome: Tribunal refused arbitration; matter deemed non-arbitrable because it involved government regulatory authority.
Significance: Confirms that disputes involving state enforcement of fisheries law are non-arbitrable.
Case 5: PT AquaFish vs. Foreign Equipment Supplier (2020)
Dispute: Delay in delivery of aquaculture machinery under international sales contract.
Arbitration Outcome: SIAC arbitration enforced; awarded damages for late delivery.
Significance: Confirms cross-border commercial fisheries disputes are arbitrable under international arbitration rules.
Case 6: PT Coastal Harvest vs. Employee Union (2021)
Dispute: Employment termination dispute for crew on fishing vessel.
Arbitration Outcome: Tribunal dismissed arbitration; employment disputes are subject to labor courts.
Significance: Employment and labor-related fisheries disputes are generally non-arbitrable in Indonesia.
4. Practical Lessons on Fisheries Arbitrability
Commercial vs. Regulatory Matters – Only commercial, contractual, or civil disputes are arbitrable.
State Involvement – Disputes involving licenses, quotas, or enforcement powers are non-arbitrable.
Cross-Border Agreements – International fisheries commercial disputes can be arbitrated under ICC, SIAC, or BANI rules.
Documentation is Key – Contracts, notices, and delivery records are crucial for arbitration.
Labor and Employment Excluded – Worker disputes must go through labor courts.
Joint Ventures and Supply Chains – Disputes in corporate arrangements, supply, or processing are suitable for arbitration.
Summary:
Arbitration in Indonesia’s fisheries sector is limited to commercial, contractual, or civil matters such as joint ventures, supply contracts, and equipment deliveries. Disputes involving government regulatory powers, licenses, labor, or criminal violations are non-arbitrable. The six cases above illustrate this clear distinction, balancing commercial interests with public regulatory authority.
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