INDONESIA Law and Practice Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
If the lease is governed by a foreign law, it is advis - able that the lease contains a provision which specifi - cally states that the termination of the lease can occur without the need of a court order. This is to prevent any issue if there is a challenge by the lessee on the unilateral termination by the lessor and such challenge is brought (for any reason) by the lessee before an Indonesian court. To re-export an aircraft, the lessor will be required to obtain an export clearance from the Indonesian cus - toms service and apply for certain licences (such as the security clearance, diplomatic clearance and flight approval). The aircraft does not need to be physically located in Indonesia at the time of any such actions. 2.6.2 Lessor Taking Possession of the Aircraft An “unfriendly” repossession may require a court judgment. Furthermore, with respect to the reposses - sion of an aircraft, a deregistration of the aircraft would have to be applied for and would be granted upon fulfilment of all prevailing policies and administrative requirements of the DGCA. For export of the aircraft or of the equipment, customs, security and DGCA clear - ances are required. The Aviation Law states that an Indonesian registered aircraft can be deregistered from the Indonesian Civil Aircraft Registry upon request of: • the owner of the aircraft; or • the creditor by virtue of a recorded irrevocable deregistration and export request authorisation (IDERA), if the lessee is in default under its agreement and this deregistration process could be made without the need of a court order. This will provide more protection for owners and/or creditors (including lessors) if they are to repossess the aircraft in the event of default by the Indonesian lessee. Further, the Cape Town Convention also provides vari - ous forms of remedies that can be utilised by creditors
(which include the owner, mortgagee or lessor) and one of them is to take possession of the aircraft in the event of default by its debtor. Pursuant to the declara - tions made by the Republic of Indonesia, such rem - edies can be utilised without court action and without the leave of the court. However, due to the issuance of Government Regu - lation No 32 of 2021 on the Management of Aviation Activities (the “Aviation Government Regulation”), which contradicts the Aviation law, there is now uncer - tainty as to whether in the event of a default by a lessee, in a situation where the owner/lessor is not named as the authorised party under an acknowl - edged and recorded IDERA, such owner/lessor can repossess the aircraft without a court action. The regulation now requires a final and binding court rul - ing for a deregistration request by an owner due to a default by a lessee. Additionally, a Ministry of Transportation Regulation issued in 2021 also requires that a deregistration request be submitted by: • a creditor having international interest based on temporary ruling from the court; and • a party who has won an arbitration award or court ruling in the event of a default. It should be noted that, under the hierarchy of Indo - nesian laws and regulations, provisions under an implementing government regulation and/or ministe - rial regulation should not be contrary to and must be consistent with the Law they are designed to imple - ment. In this case, the Aviation Government Regu - lation issued in 2021 and Ministry of Transportation Regulation also of 2021 should not contradict the Aviation Law. However, this inconsistency has to date not been rectified by the government nor considered by the Indonesian courts. 2.6.3 Specific Courts for Aviation Disputes There are no specific courts to decide aviation dis - putes and disputes may be heard either in the District Court or, if the parties agree to arbitration, in the nomi - nated arbitral forum.
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