INDONESIA Law and Practice Contributed by: Maria Sagrado, Frederick Simanjuntak and Stephanie Kandou, Makarim & Taira S.
Pencatat Balik Nama Kapal ) at the domicile where the ship is registered and recorded. The hypothec deed will then be registered with the Directorate General of Sea Transportation of Ministry of Transportation to obtain the hypothec certificate ( grosse akta hipotek ) which is the evidence of the recordation of such hypothec deed in the Vessel Main Registry ( Daftar Induk Pendaftaran ). The fees for preparing the hypothec deed depends on the loan amount. The process to obtain the hypothec deed certificate usually takes 1–2 weeks. The hypothec deed is also subject to official registra- tion fees in the form of PNBP. The PNBP for hypothec deed ranges from IDR100,000–IDR30 million depend- ing on the size of the vessel. Pledge A pledge can be used to secure moveable property, whether tangible (such as machinery, vehicles, inven- tory, etc) or intangible (such as accounts receivables, shares, patent rights, etc). Unlike fiduciary security, a pledge is a possessory security, meaning that when it concerns a pledge of tangible movables, the pledged items must come into the physical possession of the pledgee, or at least must no longer be in the physical possession or control of the pledgor. To secure an asset with a pledge, the lender and bor- rower must enter into a pledge agreement. The estab- lishment of a pledge depends on the nature of the goods and is classified as follows. • A pledge of tangible moveable goods and bearer instruments – by delivery of the goods or instru- ments into the physical possession of the pledgee or a third party agreed upon by the parties. • A pledge of order instruments – by endorsement of the instruments and their delivery to the pledgee. • A pledge of intangible moveable goods (except bearer and order instruments) – by notification of the pledge to the party against whom the rights pledged will be enforced. Unlike mortgage and fiduciary security, there is no filing or registration requirement to any government authority for a pledge. However, for a pledge of shares of a publicly listed company, the pledge must be regis-
tered with the Indonesian central custodian to ensure that the relevant share account is blocked to prevent the shares from being redeemed or transferred. In addition, if the pledge is established over shares of a publicly listed company that amount to at least 5% or more of the voting rights in that company, the owner of the shares must report such granting of security to the Financial Service Authority (OJK). The 5% threshold can be satisfied from a single or an accumulation of multiple pledge transactions over shares of a publicly listed company. For a pledge of shares in a privately held company, the pledge needs to be registered in the shareholders’ register of the company. 5.2 Floating Charges and/or Similar Security Interests The concept of a floating charge is not recognised under Indonesian law. However, Indonesian law does recognise fiduciary security, which shares similarities with a floating charge. Fiduciary security allows the borrower to retain possession and use of the secured asset, while the ownership title of the asset is trans- ferred to the lender. This arrangement is generally referred to as a non-possessory security right. Fidu- ciary security can be used to secure moveable assets and can be created over both existing and future assets. In securing future assets, the lender usually requires the borrower to periodically update the list of fiduciary security objects and obtain new fiduci- ary security certificates to cover any new assets that come into existence. 5.3 Downstream, Upstream and Cross- Stream Guarantees As a general rule, Indonesian corporate entities are allowed to provide guarantees to third parties, includ- ing downstream, upstream and cross-stream guar- antees. When providing a corporate guarantee, it is important to check the provisions in the corporate entity’s articles of association and determine whether it is allowed to provide guarantee to another party and to check if the granting of the guarantee ben- efits the corporate entity. It is also important to ensure that all internal corporate approvals and authorisa- tions required by the articles of association, as well as Indonesian law, are obtained by the guarantor, and that the individuals signing the guarantee have the authority to do so.
211 CHAMBERS.COM
Powered by FlippingBook