Fatahillah.hoed@yahoo.com
None of us expects worst things to occur to our daily lives. But live is not always fills with cheers, joy and happiness, some times we have to prepare for the worst and sadness caused by something beyond our anticipation. It forces us to realize, every body have to face their own nightmare. Each person has to pass the obstacle in their live and even for some people occur on a timely basis.
However, some people have different perspective and perceive it as a challenge which it creates an opportunity for invention. Before using a fire to enlighten the dark, man just like animal, daily activity discontinue when the sun goes down. The invention growth further indicated by the invention of electricity which supports the invention of the light ball, which support people for their night and indoor activity.
This essay will elaborate mechanism needed in order to prevent or at least minimize any potential unpredicted negative event in the future correlated with the implementation of business contracts. It based on Choice of Law and Choice of Forum stated in the contract which decided mutually by the contract parties. Lack of Choice of Law and Choice of Forum in Business Contract create a Contract without clear direction for dispute settlement when dispute arise by any unpredicted Caused, which may caused different dispute settlement proceed by each party. Any party could also reject decision from any dispute settlement institution and seek supportive verdict from another dispute settlement institution in view of the fact that there is no guidance in the contract related to mandatory institution needs to seek by the party whenever any dispute arise caused by different interpretation or any unpredicted event.
Contracts provision shall commonly set the prevailing law for instance Indonesian Law. It means the contract parties desire to use Indonesian Law to regulate or as reference and the implementation of contract provision will be based on Indonesian Law. This is what we called it Choice of Law. Contract could also stated any dispute will be settle for instance in Singapore International Arbitration Centre. Its means the contract parties have reach mutual consensus regarding institution to settle any dispute may arise correlated with different interpretation or any unpredicted event affected the contract provision applicability which the terminology shall be Choice of Forum or Choice of Jurisdiction. Choice of Law is basically a mutual consent of the contract parties to utilize governing law in the contracts. Subsequent to nomination of the contract governing law, implementation and interpretation of contract provision shall refer to the governing Law selected by the contract parties. Disputes, will be scrutinize based on governing Law perspective in order to generate liabilities for each party. The Agency as a forum to resolve dispute either arbitration or court, determine by Choice of Forum of the contract parties.
There are considerations to select Choice of Law and Choice of Forum and Alternative Dispute Resolution (ADR). According to Baubly Gediminas, a maritime Lawyers, Choice of Forum related to select the appropriate court, could be determine by:
Prorogation Agreement: selecting certain court for dispute settlement
Derogation Agreement: the contract parties mutually consent will not resolve the dispute at the court of certain country.
However, the contracting parties aren’t entirely free to set Choice of Forum. Limitation to select Choice of Forum related to execution of the verdicts from the Agency set by Choice of Forum. Even the verdicts very supportive, it could be void for any reason such as violate public order for instance contravention with the policy of the Country where the execution of the verdict taken. Its probably occur in caused of the governing Law selected in Choice of Law is not related or appropriate with the Legal System in the Country where the verdict will be execute. Or the Choice of Forum decision is contravene with the prevailing Law and Regulation in the project location. The efficacy of Choice of Law and Choice of Forum also needs cautious consideration.
The contracting parties have to very cautiously consider selecting Choice of Law and Choice of Forum in the early phase promulgated the Contracts. Outside of Court as Choice of Law will be effective for party in good faith. Preventive action to doing business in Indonesia is by selecting Court as Choice of Forum. The preventive action is necessary because non Court Choice of Forum eventually will end up in Court when one of the contracting parties is non cooperative. It doesn’t mean everything will be just fine till the end of the road. It’s because the court also have deficiency. Indonesian Judges have minor understanding related to foreign law and various obstacles to invite Foreign Law Expert to Indonesian court. It would be wise to set Indonesian Law as Choice of Law and Indonesian Court as Choice of Forum for safety purposes dealing with Indonesian Company or Company with major asset located in Indonesia. It will not apply for Indonesian company owning an off-shore asset or multinational operate.
What will happen when the contracting parties drafting their contract without Choice of Law and Choice of Forum? Disaster! That will be the proper answer, obviously when one of the contracting parties intentionally breaches the contracts. The repressive action (to minimize the pain) could proceed by further interpretation to the contracts. Unspecified in the Contract according to Prof Mr. Sudargo Gautama, expert on International Private Law, could be interpreted as silently perform or selection constructed on the judgment of the Court based on assumption. The interpretation requires a court trial by the Judge or non Court forum based on mutual consent of the parties.
Dispute may occur in cause of Choice of Law and Choice of Forum in contracts unsuitable to the jurisdiction at the execution place. Usually occur in the internet services. One of the cases is “Playmen” magazine from Italy prohibited banned from publishing in America by the Court of New York in case Playboy Enterprises Inc. v. Chuckleberry Publishing Inc for violating “Playboy” copyright. The publisher publishes it through internet in Italy which also could be access in America. Federal Court deems the publisher has violated order from the Court.
American court decision could not harm as long as Playmen publisher keeps the business entity in Italy and there are no holding or subsidiary or representation office in America. Unfortunately internet services never consider jurisdiction as limitation. Company which advertising their product in the internet may treated as company operate in local area which could be charge in the local court like State of New York in such case as National Football League v. Miller and Connecticut in case Inset System, Inc. v. Instruction Set Inc. unfortunately Indonesian court hasn’t yet adopt similar provision which will be a dilemma when this kind of case arrive at Indonesian district court.
The condition apply in American state could also apply in ASEAN context and much wider to the case involving parties from different countries. It takes preliminary action to redefine jurisdiction concept, considering internet as essential necessity for global business in the future competition. Jurisdiction concept has to be extended, which also needs to cover cyberspace. Person or a legal entity have no needs to physically present or physically operate conducting business in certain area as a condition precedent to be indict for suffering certain party in related area.
There is a slight possibility in the future, Malaysian legal entity without any affiliation whatsoever to any company operate in Indonesia sue in Central Jakarta District Court on the grounds that internet promotion by such company has defect to person or certain legal entity in Indonesia. The extensions of market area by the internet also bring multiplier effect in form of extension of potential location to file a suit.
It make company has to be more cautious to formulate the content and advertise their product on the internet which have to avoid controversy. Of course creativity, imagination and innovation always have a space in internet.
Any preventive action will be hopeless because Internet accessible from every part of the world especially by the fast growing of the new technology. It makes reaction to any charges arise to the company advertise on the internet solely by reactive basis. It’s impractical to set limitation to his activity solely to certain area and not intentionally violate prevailing law in any jurisdiction. Even many company state such things in the disclaimer, the affectivity depend on perspective of any local court will it be admissible in occurrence of a petition submit to the related court.
How about choice of law? Is it still necessary to insert to the contract correlated to the promotion through internet cause in many places people could file a petition to the local court? Of course it’s still needed to have choice of law in the contract to minimize dispute and to have more constructive dispute settlement by having choice of law in the contract. Marketing via internet could produce more potentially parties to file a petition because violate his right or pride or any other causes which will never be minimize or prevent by the Choice of Law provision. It’s not only consumers; agency from any government could potentially file a petition because of the content of the advertising or the procedures of advertising have violated prevailing laws and regulation in such government. Company could have better course of action by providing Choice of Law in the On-line contract favors to the company which have to approve against internet consumers.
If there is a conclusion for our issue, to have choice of law and choice of forum in business contract have unique dilemma. Business contract excluding those elements may effectuates difficulty to reach mutual consensus when dispute arise related to different interpretation or any unpredicted event in period of contract implementation.
By including those elements, business contract would not guarantee shall be free or could minimize any potential dispute or petition especially by the involvement of internet. It has to be cautiously discussed by the parties to determine which governing law and agency could be more optimize to support implementation of the contract by considering any risk might arise.
None of us expects worst things to occur to our daily lives. But live is not always fills with cheers, joy and happiness, some times we have to prepare for the worst and sadness caused by something beyond our anticipation. It forces us to realize, every body have to face their own nightmare. Each person has to pass the obstacle in their live and even for some people occur on a timely basis.
However, some people have different perspective and perceive it as a challenge which it creates an opportunity for invention. Before using a fire to enlighten the dark, man just like animal, daily activity discontinue when the sun goes down. The invention growth further indicated by the invention of electricity which supports the invention of the light ball, which support people for their night and indoor activity.
This essay will elaborate mechanism needed in order to prevent or at least minimize any potential unpredicted negative event in the future correlated with the implementation of business contracts. It based on Choice of Law and Choice of Forum stated in the contract which decided mutually by the contract parties. Lack of Choice of Law and Choice of Forum in Business Contract create a Contract without clear direction for dispute settlement when dispute arise by any unpredicted Caused, which may caused different dispute settlement proceed by each party. Any party could also reject decision from any dispute settlement institution and seek supportive verdict from another dispute settlement institution in view of the fact that there is no guidance in the contract related to mandatory institution needs to seek by the party whenever any dispute arise caused by different interpretation or any unpredicted event.
Contracts provision shall commonly set the prevailing law for instance Indonesian Law. It means the contract parties desire to use Indonesian Law to regulate or as reference and the implementation of contract provision will be based on Indonesian Law. This is what we called it Choice of Law. Contract could also stated any dispute will be settle for instance in Singapore International Arbitration Centre. Its means the contract parties have reach mutual consensus regarding institution to settle any dispute may arise correlated with different interpretation or any unpredicted event affected the contract provision applicability which the terminology shall be Choice of Forum or Choice of Jurisdiction. Choice of Law is basically a mutual consent of the contract parties to utilize governing law in the contracts. Subsequent to nomination of the contract governing law, implementation and interpretation of contract provision shall refer to the governing Law selected by the contract parties. Disputes, will be scrutinize based on governing Law perspective in order to generate liabilities for each party. The Agency as a forum to resolve dispute either arbitration or court, determine by Choice of Forum of the contract parties.
There are considerations to select Choice of Law and Choice of Forum and Alternative Dispute Resolution (ADR). According to Baubly Gediminas, a maritime Lawyers, Choice of Forum related to select the appropriate court, could be determine by:
Prorogation Agreement: selecting certain court for dispute settlement
Derogation Agreement: the contract parties mutually consent will not resolve the dispute at the court of certain country.
However, the contracting parties aren’t entirely free to set Choice of Forum. Limitation to select Choice of Forum related to execution of the verdicts from the Agency set by Choice of Forum. Even the verdicts very supportive, it could be void for any reason such as violate public order for instance contravention with the policy of the Country where the execution of the verdict taken. Its probably occur in caused of the governing Law selected in Choice of Law is not related or appropriate with the Legal System in the Country where the verdict will be execute. Or the Choice of Forum decision is contravene with the prevailing Law and Regulation in the project location. The efficacy of Choice of Law and Choice of Forum also needs cautious consideration.
The contracting parties have to very cautiously consider selecting Choice of Law and Choice of Forum in the early phase promulgated the Contracts. Outside of Court as Choice of Law will be effective for party in good faith. Preventive action to doing business in Indonesia is by selecting Court as Choice of Forum. The preventive action is necessary because non Court Choice of Forum eventually will end up in Court when one of the contracting parties is non cooperative. It doesn’t mean everything will be just fine till the end of the road. It’s because the court also have deficiency. Indonesian Judges have minor understanding related to foreign law and various obstacles to invite Foreign Law Expert to Indonesian court. It would be wise to set Indonesian Law as Choice of Law and Indonesian Court as Choice of Forum for safety purposes dealing with Indonesian Company or Company with major asset located in Indonesia. It will not apply for Indonesian company owning an off-shore asset or multinational operate.
What will happen when the contracting parties drafting their contract without Choice of Law and Choice of Forum? Disaster! That will be the proper answer, obviously when one of the contracting parties intentionally breaches the contracts. The repressive action (to minimize the pain) could proceed by further interpretation to the contracts. Unspecified in the Contract according to Prof Mr. Sudargo Gautama, expert on International Private Law, could be interpreted as silently perform or selection constructed on the judgment of the Court based on assumption. The interpretation requires a court trial by the Judge or non Court forum based on mutual consent of the parties.
Dispute may occur in cause of Choice of Law and Choice of Forum in contracts unsuitable to the jurisdiction at the execution place. Usually occur in the internet services. One of the cases is “Playmen” magazine from Italy prohibited banned from publishing in America by the Court of New York in case Playboy Enterprises Inc. v. Chuckleberry Publishing Inc for violating “Playboy” copyright. The publisher publishes it through internet in Italy which also could be access in America. Federal Court deems the publisher has violated order from the Court.
American court decision could not harm as long as Playmen publisher keeps the business entity in Italy and there are no holding or subsidiary or representation office in America. Unfortunately internet services never consider jurisdiction as limitation. Company which advertising their product in the internet may treated as company operate in local area which could be charge in the local court like State of New York in such case as National Football League v. Miller and Connecticut in case Inset System, Inc. v. Instruction Set Inc. unfortunately Indonesian court hasn’t yet adopt similar provision which will be a dilemma when this kind of case arrive at Indonesian district court.
The condition apply in American state could also apply in ASEAN context and much wider to the case involving parties from different countries. It takes preliminary action to redefine jurisdiction concept, considering internet as essential necessity for global business in the future competition. Jurisdiction concept has to be extended, which also needs to cover cyberspace. Person or a legal entity have no needs to physically present or physically operate conducting business in certain area as a condition precedent to be indict for suffering certain party in related area.
There is a slight possibility in the future, Malaysian legal entity without any affiliation whatsoever to any company operate in Indonesia sue in Central Jakarta District Court on the grounds that internet promotion by such company has defect to person or certain legal entity in Indonesia. The extensions of market area by the internet also bring multiplier effect in form of extension of potential location to file a suit.
It make company has to be more cautious to formulate the content and advertise their product on the internet which have to avoid controversy. Of course creativity, imagination and innovation always have a space in internet.
Any preventive action will be hopeless because Internet accessible from every part of the world especially by the fast growing of the new technology. It makes reaction to any charges arise to the company advertise on the internet solely by reactive basis. It’s impractical to set limitation to his activity solely to certain area and not intentionally violate prevailing law in any jurisdiction. Even many company state such things in the disclaimer, the affectivity depend on perspective of any local court will it be admissible in occurrence of a petition submit to the related court.
How about choice of law? Is it still necessary to insert to the contract correlated to the promotion through internet cause in many places people could file a petition to the local court? Of course it’s still needed to have choice of law in the contract to minimize dispute and to have more constructive dispute settlement by having choice of law in the contract. Marketing via internet could produce more potentially parties to file a petition because violate his right or pride or any other causes which will never be minimize or prevent by the Choice of Law provision. It’s not only consumers; agency from any government could potentially file a petition because of the content of the advertising or the procedures of advertising have violated prevailing laws and regulation in such government. Company could have better course of action by providing Choice of Law in the On-line contract favors to the company which have to approve against internet consumers.
If there is a conclusion for our issue, to have choice of law and choice of forum in business contract have unique dilemma. Business contract excluding those elements may effectuates difficulty to reach mutual consensus when dispute arise related to different interpretation or any unpredicted event in period of contract implementation.
By including those elements, business contract would not guarantee shall be free or could minimize any potential dispute or petition especially by the involvement of internet. It has to be cautiously discussed by the parties to determine which governing law and agency could be more optimize to support implementation of the contract by considering any risk might arise.
