ALTERNATIVE DISPUTE RESOLUTION IN CONSTRUCTION CONTRACT IN INDONESIA

Abstrak

Essentially, construction projects emerge from the intersection of two primary interests. On one side, there is the demand from Service Users, and on the other side, the Service Providers offer their services. Law Number 2 of 2017 on Construction Services, in Article 1 Paragraphs (5) and (6), defines Service Users as owners or employers utilizing Construction Services, while Service Providers are those offering such services. The construction industry is highly complex due to the involvement of multiple disciplines and interactions with numerous individuals, each with their own interests. This complexity increases the potential for disputes. Disputes in construction contracts, or construction disputes, often arise and are sometimes unavoidable during contract execution. These disputes can stem from various factors, both internal and external. Alternative Dispute Resolution (ADR) has become a significant approach in addressing disputes within construction contracts in Indonesia. This method provides a practical and harmonious alternative to litigation, offering faster and more cost-effective resolutions. This paper investigates the implementation of ADR in the construction industry, focusing on its legal framework, commonly used methods, benefits, and associated challenges. By examining these aspects, the study aims to suggest strategies for optimizing ADR practices to better cater to the demands of Indonesia's expanding construction sector.