INDONESIA Trends and Developments Contributed by: Farih Romdoni Putra, Aditya Bagus Anggariady, Ghifar Hilmi and Andhika Kusumonegoro, KARNA
Conclusion Law No 37 of 2004 remains the cornerstone of Indone - sia’s bankruptcy and restructuring framework. Despite its relative maturity, the law has yet to undergo com - prehensive reform to address the evolving dynamics of modern commerce, particularly in the era of globali - sation where Indonesian debtors frequently maintain financial ties with multiple foreign investors, lenders and lessors. While the existing provisions – especially those recog - nising debts in both domestic and foreign currencies – have established a sound legal foundation for cross- border participation, the absence of detailed rules on the co-ordination and recognition of foreign insolven - cy proceedings continues to present challenges. In sum, Indonesia stands at a critical juncture – where maintaining the balance between national legal sover - eignty and global financial integration will determine the resilience, fairness and predictability of its insol - vency regime moving forward.
• assets belonging to a guarantor or third party can - not be included in the bankruptcy estate ( boedel pailit ) unless it can be proven otherwise. Before this clarification, it was common in practice for third-party assets to be wrongfully included in the bankruptcy estate, causing legal uncertainty and vio - lating the principle of assets separation. Through SEMA No 2 of 2024, the Supreme Court pro - vides concrete legal protection for third parties who are often affected in bankruptcy of PKPU proceed - ings. The Supreme Court emphasized that a guaran - tor’s liability is not automatically and proportionally. This approach strengthens both fairness and legal certainty, preventing the misuse of bankruptcy pro - ceedings as a means of seizing third-party assets. Ultimately, SEMA No 2 of 2024 signifies a shift in Indonesian insolvency law towards greater protection of third-party property rights and the enforcement of proportionality between creditors, debtors and guar - antors/third parties. These two SEMAs reflect the Supreme Court’s ongo - ing effort to harmonise bankruptcy law with commer - cial realities and substantive justice: • through SEMA No 3 of 2023, the Court seeks to prevent misuse of PKPU as a coercive tool against developers in disputes that are not genuinely insolvency-related; and • through SEMA No 2 of 2024, it reinforces the limits of liability to prevent arbitrary confiscation of third- party assets. Thus, both SEMAs represent an important step towards building a more balanced, equitable and legally certain bankruptcy framework in Indonesia.
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