Construction Dispute Resolution through Alternative Dispute Resolution: A Review of Business Law in Indonesia and Thailand

Abstract

The construction sector, which is full of complex interactions between business actors in Indonesia and Thailand, often gives rise to technical disputes that require effective resolution through ADR mechanisms. Although regulated and implemented in both countries, they show significant differences in terms of effectiveness, institutions, technology utilization, and legal culture that influence actors' preferences and trust in non-litigation dispute resolution. The purpose of this study is to analyze the regulation and implementation of construction dispute resolution through ADR in the business legal systems of Indonesia and Thailand, and to identify similarities, differences, and factors that influence the effectiveness of ADR mechanisms in both countries. This study uses normative legal methods with legislative, conceptual, and comparative approaches to analyze the regulation and implementation of construction dispute resolution through ADR in Indonesia and Thailand, with data collection through literature studies and descriptive-comparative data analysis. The results of the study indicate that although Indonesia and Thailand both recognize and regulate construction dispute resolution mechanisms through ADR in their business legal systems, the effectiveness of their implementation differs significantly. Indonesia faces challenges in the form of institutional fragmentation, low practitioner understanding, and limited digitalization, while Thailand demonstrates a more structured, integrated, and progressive ADR system with the support of specialized institutions such as THAC, ADR obligations in government contracts, and the widespread implementation of the Dispute Adjudication Board mechanism. Factors such as government policy, legal culture, and the use of technology are the main differences in the effectiveness of ADR in the two countries, making Thailand superior in the implementation and acceptance of ADR, particularly in the resolution of construction disputes.