THE EFFECTIVENESS OF ARBITRATION AS AN ALTERNATIVE DISPUTE RESOLUTION MECHANISM FOR BUSINESS DISPUTES IN THE BENGKULU REGION

Abstract

Business disputes are an inevitable consequence of increasingly complex commercial activities, including those occurring in the Bengkulu region. Business actors require a dispute resolution mechanism that provides efficiency, confidentiality, legal certainty, and responsiveness to commercial needs. Arbitration constitutes an alternative dispute resolution mechanism recognized under Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolution. This study aims to analyze the effectiveness of arbitration in resolving business disputes in Bengkulu and identify the legal and practical factors influencing its implementation. This research employs a normative juridical method using statutory, conceptual, and contextual approaches. The legal materials consist of legislation, legal doctrines, books, journal articles, and supporting documents related to arbitration and business dispute resolution. The materials were analyzed qualitatively through legal interpretation, classification, and systematic analysis. The findings indicate that arbitration is legally capable of providing procedural flexibility, confidentiality, party autonomy, expert-based adjudication, and final and binding awards. Nevertheless, its practical effectiveness in Bengkulu has not been fully optimized because arbitration clauses are not widely used in commercial contracts, access to arbitration institutions remains limited, and arbitration is often perceived as appropriate only for large-value disputes. Strengthening arbitration requires legal education, improved contract drafting, institutional cooperation, affordable procedures, and the development of technology-based dispute resolution services. Arbitration is therefore effective in principle, but its regional implementation depends on accessibility, business awareness, institutional support, and voluntary compliance with arbitral awards.