Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Happy Rayna Stephany, Andin Aditya Rahman
A statement by Patrialis Akbar, former Minister of Law and Human Rights, that international agreements do not need to include a translation in the Indonesian language has proven to be untrue.
This is the conclusion that can be drawn from the case between PT. Bangun Karya Pratama (BKP) and an American company, Nine AM Ltd (Nine AM), which was recently decided by the West Jakarta District Court. BKP filed a lawsuit against Nine AM based on the fact that the international business contract between the two parties did not include a Bahasa Indonesia version.
The adjudicating judges ultimately decided in favor of BKP, declaring that the international business contract between the parties was null and void. Consequently, the Court also ordered BKP to return all loans funds provided to it by Nine AM.
The court decision clearly contradicts Patrialis’ statement that is based on the premise that private commercial contracts without a Bahasa Indonesia version are lawful and in accordance with Law No. 24 of 2009 on The State Flag, Language, Emblem, and the National Anthem, known as the State Law
Patrialis also asserted that based on the principle of freedom of contract, the parties to a private commercial contract can decide the language used in an agreement between them, whether that be English, Bahasa Indonesia, or even both or another language of their choice.
Expressing clear dissatisfaction with the Court’s decision, Maulana Syarif, Nine AM’s attorney, said that his client will immediately appeal the decision.
“We will submit the appeal brief on Monday,” he stated to Hukumonline during an interview last Thursday.
Maulana argued that the Law does not stipulate that contracts without a Bahasa Indonesia version must be nullified nor does it include penalties for such contracts.
“Even though it is mandatory, there are no penalties that regulate that such contracts must be declared void by law,” Mualana explained.
The case between Nine AM and BKP essentially revolves around a loan agreement that was executed on 23 April 2010. The agreement – which was made and subject to Indonesian laws and regulations – granted BKP a loan from Nine AM of USD 4.4 million.
As collateral, the parties agreed to enter into a fiducia security agreement on 27 April 2010. Collateral for the loan consisted of six Caterpillar 775F trucks. The fiducia agreement provided for repayment in 48 monthly installments of USD 148 thousand, and a final interest payment of USD 1.8 million.
After two years, BKP filed a lawsuit against Nine AM arguing that the agreements between them failed to satisfy the formal requirements under Article 31 (1) of the Law, because the agreements were made in English and did not provide a translated version in Indonesian.
The Court agreed with BKP and in its decision stated that the Law explicitly requires agreements to be made in Bahasa Indonesia. The Court disregarded Nine AM’s arguments that the Law does not explicitly provide legal consequences for contracts without an Indonesian language version.
Further provisions on this matter have yet to be provided by a Presidential Regulation as mandated by Article 40 of the State Law.
The views of Nine AM are supported by Minister of Law and Human Rights Letter No. M.HH.UM.01.01-35 of 2009 on Clarification Request of Implications and Implementation of Law No. 24 of 2009.
This document asserts that the use of foreign languages, including English, will not violate the formal requirements for a valid agreement.
This essentially means that parties to a contract are free to determine the language used in a contract based on the principle of freedom of contract under Article 1338 (1) of the Indonesian Civil Code.
In its reasoning, the Court ruled that laws stand above more technical regulations, such as Presidential Regulations and Ministerial Letters, and hence the legal arguments put forwarded by Nine AM do not overrule the obligations under Article 31 (1) of the State Law.
In conclusion, the Court decided that the agreements between BKP and Nine AM – both the loan and fiducia agreements –contradict Article 31 (1) of the State Law, and therefore fail to fulfill the obligatory formal requirements under Article 1320 of the Indonesian Civil Code.
(hot/kc)
Happy Rayna Stephany, Andin Aditya Rahman
A statement by Patrialis Akbar, former Minister of Law and Human Rights, that international agreements do not need to include a translation in the Indonesian language has proven to be untrue.
This is the conclusion that can be drawn from the case between PT. Bangun Karya Pratama (BKP) and an American company, Nine AM Ltd (Nine AM), which was recently decided by the West Jakarta District Court. BKP filed a lawsuit against Nine AM based on the fact that the international business contract between the two parties did not include a Bahasa Indonesia version.
The adjudicating judges ultimately decided in favor of BKP, declaring that the international business contract between the parties was null and void. Consequently, the Court also ordered BKP to return all loans funds provided to it by Nine AM.
The court decision clearly contradicts Patrialis’ statement that is based on the premise that private commercial contracts without a Bahasa Indonesia version are lawful and in accordance with Law No. 24 of 2009 on The State Flag, Language, Emblem, and the National Anthem, known as the State Law
Patrialis also asserted that based on the principle of freedom of contract, the parties to a private commercial contract can decide the language used in an agreement between them, whether that be English, Bahasa Indonesia, or even both or another language of their choice.
Expressing clear dissatisfaction with the Court’s decision, Maulana Syarif, Nine AM’s attorney, said that his client will immediately appeal the decision.
“We will submit the appeal brief on Monday,” he stated to Hukumonline during an interview last Thursday.
Maulana argued that the Law does not stipulate that contracts without a Bahasa Indonesia version must be nullified nor does it include penalties for such contracts.
“Even though it is mandatory, there are no penalties that regulate that such contracts must be declared void by law,” Mualana explained.
The case between Nine AM and BKP essentially revolves around a loan agreement that was executed on 23 April 2010. The agreement – which was made and subject to Indonesian laws and regulations – granted BKP a loan from Nine AM of USD 4.4 million.
As collateral, the parties agreed to enter into a fiducia security agreement on 27 April 2010. Collateral for the loan consisted of six Caterpillar 775F trucks. The fiducia agreement provided for repayment in 48 monthly installments of USD 148 thousand, and a final interest payment of USD 1.8 million.
After two years, BKP filed a lawsuit against Nine AM arguing that the agreements between them failed to satisfy the formal requirements under Article 31 (1) of the Law, because the agreements were made in English and did not provide a translated version in Indonesian.
The Court agreed with BKP and in its decision stated that the Law explicitly requires agreements to be made in Bahasa Indonesia. The Court disregarded Nine AM’s arguments that the Law does not explicitly provide legal consequences for contracts without an Indonesian language version.
Further provisions on this matter have yet to be provided by a Presidential Regulation as mandated by Article 40 of the State Law.
The views of Nine AM are supported by Minister of Law and Human Rights Letter No. M.HH.UM.01.01-35 of 2009 on Clarification Request of Implications and Implementation of Law No. 24 of 2009.
This document asserts that the use of foreign languages, including English, will not violate the formal requirements for a valid agreement.
This essentially means that parties to a contract are free to determine the language used in a contract based on the principle of freedom of contract under Article 1338 (1) of the Indonesian Civil Code.
In its reasoning, the Court ruled that laws stand above more technical regulations, such as Presidential Regulations and Ministerial Letters, and hence the legal arguments put forwarded by Nine AM do not overrule the obligations under Article 31 (1) of the State Law.
In conclusion, the Court decided that the agreements between BKP and Nine AM – both the loan and fiducia agreements –contradict Article 31 (1) of the State Law, and therefore fail to fulfill the obligatory formal requirements under Article 1320 of the Indonesian Civil Code.
(hot/kc)