THE EFFECTIVENESS OF DISPUTE RESOLUTION THROUGH THE DISPUTE BOARD IN CASES OF FAILURE TO FULFILL TKDN COMMITMENTS IN PT PLN (PERSERO) CONTRACTS

Abstract

The implementation of Domestic Component Level (TKDN) is one of the strategic policies of the Indonesian government to enhance the competitiveness of local products and drive national economic growth. However, the implementation of TKDN in procurement contracts often faces challenges, including the inability of suppliers to meet the committed value specified in the contract. This research examines the effectiveness of dispute resolution through arbitration in a case of failure to meet TKDN in the construction contract of Extension 2 LB GI 150 kV Balikpapan to GIS Kalimantan between PT PLN (Persero) as the goods/services user and PT Jaya Utama as the supplier. This dispute was resolved through a Dispute Board, as stipulated in the contract clause. This study explores the arbitration mechanism used, the implementation of administrative and financial sanctions, and the legal and business implications of the arbitration award. The results show that the arbitration mechanism through a Dispute Board is an effective alternative dispute resolution if supported by clear regulations and the commitment of the parties to resolve the dispute constructively.