In June of 2013, Indonesia’s legal community, especially legal practitioners who deal frequently with foreign parties, were shocked by a groundbreaking decision that was handed down relating to the language used in contracts. This decision was issued by the West Jakarta District Court and held that any contracts involving Indonesian parties which are drawn up without any Indonesian language version being made available will be considered null and void. This decision regarding the mandatory use of the Indonesian language when drawing up contracts referenced Law No. 24 of 2009 on the National Flag, Language, National Emblem and National Anthem (“Language Law”).[1] Moreover, the decision undoubtedly represented a new interpretation of Indonesian law and a new norm and standard to be adhered to in relation to international business practice.
 
The case which was referenced in the decision concerned a civil dispute between PT Bangun Karya Pratama Lestari and Nine AM Ltd. (popularly referred as the “Nine AM Case”),which was originally registered at the District Court of West Jakarta as No. 451/Pdt.G/2012/PN.Jkt.Bar (“First Level”) and which was later appealed at the High Court of Jakarta as No. 48/PDT/2014/PT.DKI (“Appeal Level”). Eventually, the case was also submitted to the Supreme Court for a cassation and was registered as No. 1572 K/Pdt/2015 (“Cassation Level”). At all levels of this decision, the various courts involved found that any contracts drawn up by any Indonesian parties without an Indonesian-language version being made available are in violation of the Language Law, and have thus failed to satisfy the element of “legitimate cause” (kausa yang halal), as a requirement of any contract which is based on the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata – “KUHPER”).
 
Despite the fact that the various judges involved in this case had already rendered final decisions, a number of local legal practitioners remained of the belief that the imperative norms as regards the drawing up of contracts using the Indonesian language should not be interpreted in an affirmative manner, as such an interpretation would serve to discourage foreign investment within Indonesia. Furthermore, the decision was considered to have neglected the basic concept of freedom of contract, which allows any parties to a given contract to enter freely into an agreement, which obviously includes the freedom to determine the language of a contract.
 
In order to reflect the fact that this controversial question has been widely highlighted by a number of legal communities, this edition of Indonesian Legal Digest (ILD) will address the various issues which have arisen as a result of the Nine AM Case. These issues encompass: