INDONESIA Law and Practice Contributed by: Nico Angelo Putra Mooduto, Mahareksha Singh Dillon, Talitha Amanda Ekadhani and Bagas Ananta, SSEK Law Firm
due to enforcement challenges, it may be awarded if the contractual obligation is clear and feasible to execute. This remedy is more likely in cases involv- ing unique items or specific actions that cannot be adequately compensated through monetary damages. • Restitution and Reinstatement: In cases involv- ing unjust enrichment or wrongful possession, the court may order restitution, requiring the defendant to return property or assets wrongfully obtained. Reinstatement may also be ordered, especially in employment or contractual contexts, where it may involve returning the litigant to their previous posi- tion or condition before the harm occurred. Indonesian courts generally focus on fair and equita- ble compensation for losses suffered, with a prefer- ence for remedies that restore the successful litigant’s position rather than impose punitive measures. 9.2 Rules Regarding Damages Under Indonesian law, there are two primary grounds for filing a claim: • claims based on default or breach of an agree- ment; and • claims based on unlawful acts or torts. Unlike common law jurisdictions, punitive damages are not recognised, as damages awarded are purely compensatory for the material or immaterial damages. Regarding breaches of contract, Article 1246 of the Indonesian Civil Code specifies that a party may seek compensation for: • costs that have already been incurred by the affected party (expenses); • damage or loss of property caused by the negli- gence of the other party (losses); and • profits that were anticipated but not realised due to the breach (interest). If not regulated under the contract, Article 1250 of the Indonesian Civil Code provides the percentage of interest on monetary judgments at 6% per annum, calculated from the date of it first requested before the court.
Liquidated damages are enforceable under Article 1249 of the Indonesian Civil Code. For these types of damages, the non-defaulting party must not receive damages that are higher or lower than the amount agreed in the contract. Damages that may be awarded are those that were foreseeable at the time the agreement was concluded and are a direct result of the breach, under Articles 1247 and 1248 of the Indonesian Civil Code. For unlawful acts, the panel of judges is required to ascertain the existence of a causal connection between the defendant’s actions and the harm or damages claimed by the plaintiff. Additionally, Article 1371 (2) of the Indonesian Civil Code suggests that compensation for unlawful acts should be assessed based on the position and capacity of both parties involved, as well as the factual circumstances of the case. 9.3 Pre-Judgment and Post-Judgment Interest Article 1250 of the Indonesian Civil Code mandates the accrual of post-judgment interest at a rate of 6% per annum, calculated from the date it is requested in court until the obligation is fulfilled. While the Article specifies that default interest must only be paid from the time it is formally requested in court, jurisprudence in Indonesia offers a noteworthy exception. Specifi- cally, Supreme Court Decision No 367 K/Sip/1972 states that compensation for losses and interest may commence from the date the loss occurred. 9.4 Enforcement Mechanisms of a Domestic Judgment Once a domestic judgment becomes final and bind- ing, if the losing party does not voluntarily comply, the successful party may submit an enforcement applica- tion to the district court in the jurisdiction of the losing party’s residence. In practice, the district court will issue an execution warning ( aanmaning ), directing the losing party to sat- isfy the judgment within eight days. If compliance is not met within this timeframe, the court may order the attachment of the losing party’s assets as specified in
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