Adjudication Construction for Security Payment on Settlement of Dispute of Construction Disputes in Indonesia and Malaysia ( A Comparative Law Study )

Abstract

Construction disputes are frequently technically complex, requiring fact intensive investigations which necessitate efficient management of the claims process. Construction disputes invariably necessitate a rapid, if temporary, decision in order to permit work to progress on the project. Another related issue in the involment on major international construction projects of parties from different jurisdictions with different cultural approaches, and indeed with different legal systems. They will come to a project  with different exfectations perhaps both as to the effect of their substantive rights under the contract and also as to the treatment of disputes needs to be aware of, and that will be of particular relevance in any formal dispute resolution procedure where, for example, the contrasting approaches of civil and common law jurisdiction to procedural issues may give rise to difficulties if not effectively managed. Guidance has been developed by Kuala Lumpur Regional Center for Arbitration concerning Construction Industry Payment and Adjudication Act 2012. Republic of Indonesia Law No.2 of 2014 concerning Construction Servises provide Settlement of Disputes in Article 88 and Republic of Indonesia Law No.30 of 1999 concerning Arbitration and Alternative Dispute Resolution.  This study focus on analysing of settlement of construction disputes of both regulation in Malaysia and Indonesia.

The method used in this study is descriptive analysis refers to legal normative with comparative law approach between Malaysia and Indonesia.

In conclusion, there are some important findings: (1) Indonesia provides settlement of contruction disputes may be resolved by (a) mediation; (b) conciliation; and (c) arbitration; (2) Indonesia provides settlement of contruction disputes may be resolved by Disputes Board; (3) Malaysia provides settlement of construction disputes may be settled through adjudication decision within forty-five days from the service of the adjudication response or reply to the adjudication response, whichever is later.