INDONESIA Law and Practice Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
• insurance and maintenance programmes. In respect of language requirement (note that this is a general requirement and not related specifically to the aircraft registration), Indonesian and English lan - guage versions of a contract involving an Indonesian party should be prepared and signed simultaneous - ly. Although the Indonesian Language Law and the implementing regulation thereof do not prescribe any sanction for failure to have a bilingual agreement, based on the past practice of the courts, there is a risk that a contract between a foreign party and an Indonesian party could be annulled by an Indonesian court on the basis of the absence of the Indonesian version of the contract by the time the English version of the contract was signed. 2.2.2 Tax and Withholding Gross-Up Provisions For any tax advice, please consult with an Indonesian tax consultant on this matter. 2.2.3 Parts Installed or Replaced After a Lease’s Execution If the lease covers “parts that are installed or replaced on an aircraft or engine after its execution”, such pro - visions and any amendments thereof should be recog - nised and enforceable in Indonesia to the extent that they are also recognised and enforceable under the governing law of the lease. 2.2.4 Risk of Title Annexation This would depend on the governing law of the lease. 2.2.5 Recognition of the Concepts of Trust/Trustee In general, Indonesian law does not recognise the concept of trust except in capital market matters and in the banking industry. Therefore, if there is a trust arrangement, whereby the trustee will hold the aircraft in trust in favour of a beneficiary, from the perspective of Indonesian law, it is the trustee who will be deemed as the legal owner of the aircraft. Indonesian law will not recognise the beneficiary as the legal owner of the aircraft. Consequently, only the name of the trustee can be noted in the certificate of registration of the aircraft as the registered owner of the aircraft. The authors have observed a certificate of registration naming the owner with a note that the name stated
is not acting in an individual capacity but solely as trustee of the owner. A number of challenges have been brought by Indone - sian debtors before Indonesian courts against the use of trust arrangements. However, the Supreme Court did not touch upon the issue of trust but decided the cases on the basis of other arguments presented by the Indonesian debtors. 2.3 Lease Registration 2.3.1 Notation of Owner’s/Lessor’s Interests on Aircraft Register The name of the owner and the lessor of the aircraft will be recorded in the aircraft register. However, only the name of the owner will appear in the certificate of registration of the aircraft. Under Indonesian law, the aircraft register is not con - clusive evidence of the legal owner of title of the air - craft. By registering the aircraft, such aircraft can be legally operated in Indonesia by an Indonesian opera - tor in accordance with the Aviation Law. 2.3.2 Registration If the Owner Is Different From the Operator Only the name of the owner will appear in the certifi - cate of registration of the aircraft. 2.3.3 Aircraft/Engine-Specific Registers There is no separate register of leases in Indonesia, but a copy of the lease will have to be filed with the DGCA as a prerequisite for obtaining the certificate of registration. 2.3.4 Registration of Leases With the Domestic Aircraft Registry There is no separate register of leases in Indonesia, but a copy of the lease will have to be filed with the DGCA as a prerequisite for obtaining the certificate of registration. For formalities of lease for aircraft reg - istration purposes, see 2.2.1 Mandatory Terms for Leases Governed by English or New York Law . Leases are not subject to any consent from a govern - ment entity (including any government applications).
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