Jakarta, 2022. Our firm has successfully won an arbitration claim on the management dispute over apartment managed as hotel by an international operator.

The main claim by the Claimant, our client, is that the Defendant has violated three main points under the management agreement i.e., increase of annual management fees, late payment penalty, and cut off access over apartment common area and its unit. The increase of management fees was wrongly implemented since it was not according to what has been agreed under the management agreement.

The panel of arbitrators considers that when the wordings stipulated in the agreement are clear, the parties may not deviate from it. They refer to the rectangular of four square contract theory as stipulated under Article 1342 of Indonesian Civil Code. The arbitrators also considers that there are no provisions allowing the Defendant to cut off access over common area and apartment unit, and hence, that action is considered as unlawful. Furthermore, the arbitrators declare that all provisions in the agreement that may be interpreted in such a way i.e., giving the right to cut off access, is considered as null and void. Responding to the award, Eddy Leks says, “We learn that a good faith principle in implementing an agreement is crucial. Any deviation and unilateral interpretation to benefit a certain party is a violation of a contractual right or obligation. The arbitrators’ decision are an important milestone for the protection of a property owner/tenant.”

Leks&Co is recommended on commercial dispute resolution by Legal500, asialaw Profiles, and Benchmark Litigation. One Client said, as quoted by Benchmark Litigation 2019, “In my experience, the law firm’s litigation team often thought out of the box and was very professional with extraordinary legal service execution.”

If you have any queries, you may contact us through query@lekslawyer.com, visit our website www.lekslawyer.com or visit our real estate law blogs i.e., www.hukumproperti.com and www.indonesiarealestatelaw.com.