Legal Certainty in Dispute Resolution within the Construction Services Industry for Small and Medium Enterprises
Published:
2026-01-30Downloads
Abstract
The construction services industry is central to infrastructure development in Indonesia, yet contractual disputes over payments, project delays, and variations can impose substantial legal and financial burdens on small and medium-sized enterprises (SMEs). This study examines the legal certainty of dispute-resolution mechanisms available to construction SMEs and identifies reforms that could strengthen accessible and effective remedies. It employs normative legal research using statutory, case-based, comparative, theoretical, and philosophical approaches. The analysis considers Law Number 2 of 2017 on Construction Services, the 1999 Arbitration and Alternative Dispute Resolution Law, and relevant implementing regulations, together with comparative lessons from Singapore and the United Kingdom. The findings identify overlapping jurisdiction between litigation and non-litigation forums, insufficient institutional support for dispute boards, inconsistent contractual dispute-resolution clauses, and limited access to affordable remedies for smaller contractors. Comparative analysis suggests that statutory adjudication, specialized dispute-resolution institutions, clear procedural deadlines, and enforceable decisions could improve predictability and protect project cash flow. The study develops a three-level reform framework involving regulatory harmonization, institutional strengthening of construction-sector alternative dispute-resolution mechanisms, and standardization of contractual dispute clauses. Its contribution is an integrated assessment of normative, institutional, and enforcement-related dimensions of legal certainty, with particular attention to the vulnerabilities of SMEs in Indonesian construction contracts.
Keywords:
Construction disputes Legal certainty Arbitration Dispute boards Construction SMEsReferences
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Copyright (c) 2026 Anita Noviyanti, Tami Rusli, Zainab Ompu Jainah, Erlina B
This work is licensed under a Creative Commons Attribution 4.0 International License.
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