Law No. 30 of 1999 regarding Arbitration and Alternative Dispute Resolution fimily acknowledges the existence of arbitration as a dispute settlement in Indonesia ("Arbitration Law"). According to Arbitration Law, the authority of arbitration to settle the dispute arising between the parties is based upon the arbitration agreement made by the parties involved in such disputes. Arbitration agreement is a consensus between the parties to settle existing or potential dispute arising between such parties through arbitration. Should the parties involved in a dispute has entered into an arbitration agreement, the District Court has no authority to adjudicate such dispute. Referring to thc opinion of the Supreme Court of the Republic of Indonesia, the judge shall state ex officio that it has no authority to adjudicate the dispute (without considering the Eksepsi of the defendant). As thc essence of arbitration agreement is a consensus, the Indonesia Civil Procedure parlicularly the provisions regarding the validity and the cancellation of the conlract, shall also apply to arbitration agreement. Indonesia is a party to the New York Convention of 1958 on the Recognition and Enforcement of Forcign Arbitral Awards as ratified by Presidential Decree No.34 of 1981 ("NYC"). Article II paragraph 3 of NYC provides that the local court, when seized of action in a matter of which the parties have agreed to arbitrate, must refer the parties to arbitration unless such local court fmds that the arbitration agreement is null and void, inoperalive or incapable of being performed. NYC is a positive law in Indonesia and as such the Indonesian court shall adhere to provisions conlained in the NYC. Therefore, the Distiict Court shall examine the arbitration agreement in order to determine whether the arbitration agreement is cancelled by the parties; the validity of the arbitration agreement and whether the dispute concerned is within the scope of the dispute as stated in the arbitration agreement