PASAL 32 AYAT (4) UNDANG-UNDANG NOMOR 25 TAHUN 2007 TENTANG PENANAMAN MODAL SEBAGAI DASAR KEWENANGAN ARBITRASE INTERNASIONAL DALAM MEMERIKSA SENGKETA PENANAMAN MODAL ASING

The existence of foreign investment has significance roles and contribution over the economic growth of the developing countries. Issues relating to foreign investment in the latter half of the 20th century have been the attention of countries in the world and have spawned the multilateral and bilateral agreements on foreign investment as part of international laws. The developments of International laws in the field of foreign investment law provides reasonable protection for investors and guarantee the sovereignty of the host country over its natural resources, as well as on environmental protection for sustainable development. To attract foreign investors, developing countries trying to adjust their investment regulations to conform with the provisions of international law in the field of foreign investment. In an effort to increase foreign investment, Indonesian government has enacted the Law No. 25/2007. This law regulates both foreign investment and domestic investment activity. Especially for foreign investment, Indonesian government provides guarantees: (1) equal treatment to all foreign investors; (2) there will be no act of nationalization; and (3) the right to transfer assets and repatriation. In connection with disputes that may arise in relation to foreign investment, Article 32 paragraph (4) provides that the parties have agreed to settle the dispute through international arbitration forum. The selection of international arbitration as a dispute settlement forum due to the characters of foreign investment law relationship which is a contractual dispute involving the existence of foreign elements; therefore, there is international character on the dispute. This provision is a form of legal protection for foreign investors to submit disputes to international arbitration forum that is more neutral and reliable to give a fair decision. More over, the provision also provides legal certainty that the arbitration award can be exercised in any country through the facilities of multilateral treaties or bilateral treaties concerning the recognition and enforcement of international arbitration awards. Article 32 paragraph (4) has several legal effects as follows: International arbitration as the primary forum for dispute resolution (default forum) for foreign investment disputes; The nature of the norms of Article 32 paragraph (4) of Law No.25 of 2007 is imperative; The existence of the arbitration agreement in a foreign investment agreement must be agreed upon, if not agreed then the provisions of Article 32 paragraph (4) of Law No. 25 Year in 2007 became the basis of authority of international arbitration If the parties in relation to foreign investment can not agree on international arbitration clause as the dispute forum, then the application of Article 32 paragraph (4) as the basis for arbitration authority has set aside the principle of volunteerism