INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho and Bilal Anwari, ABNR Counsellors at Law
national arbitral award against a debtor that had under - gone PKPU proceedings and successfully obtained court confirmation (homologation) of its composition plan. In court case No 200/Pdt.Sus-Arb/2023/PN Jkt. Pst ( PT Mahkota Sentosa Utama vs China Light Indus- try International Engineering & China International Economic and Trade Arbitration Commission ), the Central Jakarta District Court annulled the execution writ (exequatur) of China International Economic and Trade Arbitration Commission (CIETAC) Arbitral Award No 0831/2019, citing a violation of Indonesian public policy. Despite the general finality of arbitral award recognition under Supreme Court Regulation No 3 of 2023, the court held that the homologated composition plan from PT Mahkota Sentosa Utama’s 2020 PKPU proceedings prevailed over the arbitral award. The court emphasised that such a homologated composi - tion plan would bind all creditors under Indonesian law, and enforcing an arbitral award contradicting it would undermine the integrity of the legal system. This ruling highlights that, under certain circumstances, a court- sanctioned composition plan may take precedence over an international arbitral award that has been reg - istered in Indonesian court, particularly when enforcing the arbitral award could compromise the rights of credi - tors established through the PKPU process. 6.5 Co-Ordination in Cross-Border Cases There is no official or unofficial system of co-opera - tion, or protocols or other arrangements, between the Indonesian courts and those in foreign jurisdictions to co-ordinate restructuring or insolvency proceedings. 6.6 Foreign Creditors All creditors, whether domestic or foreign, are treated equally under Indonesian law. However, the IBL contains specific provisions allowing creditors domiciled abroad to submit their claims in bankruptcy/PKPU proceedings after the expiry of the claim submission deadline, pro - vided that certain other requirements are also fulfilled. 7. Duties and Liability of Directors and Officers 7.1 Duties of Directors Liability for a company could be attributed to a direc - tor after a company is declared bankrupt if the bank -
ruptcy of the company is a result of negligence by the BOD or the board of commissioners (BOC). In that case, if the assets of the company are not sufficient to cover the entire obligations of the company in the bankruptcy proceedings, each member of the BOD/ BOC is jointly and severally liable for the remaining obligations of the company that cannot be covered by the bankrupt company’s estate. To claim against the BOD/BOC, a lawsuit needs to be filed by the receiver of the bankrupt company in order to prove the fault or negligence of the BOD/BOC on the basis of tort under Articles 1365 and 1366 of the ICC. There could also be criminal liability under the Indonesian Penal Code for the BOD and/or the BOC. However, the members of the BOD and/or the BOC will not be liable if it can be proved that: • the bankruptcy is not due to their fault or negli - gence; • the BOD and/or the BOC conducted the manage - ment and supervision with good faith, prudence and full responsibility in the interests of the com - pany and within the objectives and purposes of the company; • the BOD does not have a conflict of interest, either directly or indirectly, over the management actions; and • the BOD and/or the BOC took measures to prevent the bankruptcy. 7.2 Personal Liability of Directors As stated in 7.1 Duties of Directors , the BOD and/or the BOC of the bankrupt debtor may be held jointly and severally liable for paying the company’s debts if such bankruptcy resulted from their fault or negli - gence, and if the company’s assets are insufficient to settle its debts towards the creditors. 7.3 Duties and Personal Liability of Officers The ICL and the IBL do not stipulate obligations and liabilities related to bankruptcy situations for officers other than the BOD and BOC. 7.4 Other Consequences for Directors and Officers The IBL does not stipulate any specific director dis - qualification or criminal liability as a result of a com -
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