INDONESIA Law and Practice Contributed by: Enny Purnomo Widhya, Nugrahani Astiyanti and I Gusti Ngurah Oka Anantajaya, Mochtar Karuwin Komar
law provided that the lessee is a party to such nova - tion arrangement. 3.2.6 Choice of Foreign Law Indonesian law may not recognise or enforce docu - ments governed by a foreign law purporting (i) to cre - ate a security interest in assets located in the Republic of Indonesia, such as the relevant insurance proceeds (except for aircraft objects in accordance with the Cape Town Convention and the Aviation Law), or (ii) to assign rights under documents governed by Indo - nesian law or assign other contractual rights governed by Indonesian law. This is why a security assignment is typically governed by non-Indonesian law. 3.2.7 Formalities/Mandatory Terms to Create and Perfect Security Assignments The formalities required depend on the governing law of such assignment. As far as Indonesian law is con - cerned, the assignment agreement must be made in writing in the Indonesian language and such assign - ment should be notified and acknowledged by the account debtor (in this case the lessee). The acknowl - edgement by the lessee should contain provisions detailing all the rights and benefits assigned by the lessor to the security trustee, so the lessee cannot argue that it is not aware of the assignment of certain rights and benefits. Further, if the assignment results in a change of certain information recorded in the aircraft registry maintained by the DGCA, this change should be notified to the DGCA. In addition, to the extent the assignment can be registered with the International Registry for the purpose of the Cape Town Convention, it should be so registered. A security assignment that does not involve an Indo - nesian party does not need to be translated, certified, notarised or legalised to be enforceable against an Indonesian party. 3.2.8 Domestic Law Security Instruments See 3.2.1 Typical Forms of Security and Recourse with regard to domestic law security instruments. No domestic law security instruments and/or local law filings are required in order to make Cape Town
filings, except for the filing of IDERA and CDL to, and recorded by, the DGCA. For the registration of fiduciary security, notarial fee and registration cost based on the value of the secured asset shall apply. For IDERA registration, the official fee payable to the DGCA is IDR2 million (or approximately USD123). There is no fee for CDL reg - istration with the DGCA. There is no registration for the security assignment in Indonesia (except for the registration of fiduciary security over insurance and reinsurance proceeds under Indonesian law with the Fiduciary Registration Office). 3.2.10 Transfer of Security Interests Over Aircraft/ Engines To the extent the rights of the security trustee in respect of all relevant secured creditors claims are valid and enforceable under the governing law of the relevant document (which law, by virtue of Indonesian conflict of law rules, should be applied by Indonesian courts), from the perspective of Indonesian law, the transfer of such rights should be recognised in the courts of Indonesia. 3.2.11 Effect of Changes in the Identity of Secured Parties The effect of changes in the identity of secured par - ties after a security assignment’s execution primarily depends on the governing law of the security assign - ment and the law where it is registered. From the per - spective of Indonesian law, with respect to fiduciary security over insurance and reinsurance proceeds, an Indonesian court may refuse to recognise the interest of a new creditor in the assets secured by the fiduciary security over insurance and reinsurance proceeds if (i) the provisions of the existing fiduciary security over insurance and reinsurance proceeds have not been amended or supplemented to expressly identify such new creditor as the fiduciary grantee thereunder; and (ii) the fiduciary registration certificates in respect of the fiduciary security over insurance and reinsurance proceeds have not been updated to reflect the change of the creditors. 3.2.9 Domestic Registration of Security Assignments Governed by Foreign Laws
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