Litigation 2019 Second Edition

Last Updated December 05, 2019

Indonesia

Law and Practice

Authors



Oentoeng Suria & Partners in association with Ashurst is a leading full service Indonesian law firm which provides corporate and commercial advice across a wide range of specialisations, including disputes, corporate, M&A and private equity, finance, capital markets, energy and infrastructure, and restructuring to both foreign and domestic entities in Indonesia. Ashurst is a leading international law firm with 27 offices in 16 countries with 400 partners and 1,300 lawyers globally, with a reputation for successfully managing large and complex multi-jurisdictional transactions, disputes and projects and delivering outstanding outcomes for clients. Together, OSP and Ashurst has a market-leading dispute resolution team of over 200 lawyers, including 50 partners, with extensive experience acting for prominent international companies on their most significant disputes. The team works seamlessly across geographic boundaries and is equally at home operating in national courts, in domestic or international arbitration, or before specialist tribunals.

The Indonesian legal system is primarily a civil law system. Indonesia also recognises both Islamic and customary laws within its legal system and practice. Unlike other parts of Indonesia, the region of Aceh applies Islamic law.

The Indonesian courts adopt an inquisitorial system, with the judges taking an active role in proceedings. In practice, judges tend to take a more active role in criminal proceedings than in civil proceedings. The judges are not bound to follow earlier decisions, including decisions of the Supreme Court (although these are persuasive). 

There are three levels of court in Indonesia: the first instance courts or District Courts, the High Court which hears appeals from the first instance courts, and the Supreme Court as the court of last resort.

There are four first instance courts: (i) the General Court; (ii) the Religious Court; (iii) the State Administrative Court; and (iv) the Military Court. The General Court is divided into a further six courts to deal with a variety of matters – these are: (i) the Commercial Court; (ii) the Industrial Relations Court; (iii) the Corruption Court; (iv) the Human Rights Court; (v) the Juvenile Court; and (vi) the Fishery Court. The State Administrative Court also has a specialist court known as the Tax Court to handle tax issues.

There are first instance courts located in each regency of Indonesia. The Commercial Court, Industrial Relations Court and Corruption Courts are located in each of the five provinces of Indonesia. The High Court has jurisdiction over these provinces and sits in the respective provincial capitals. The Supreme Court sits in Jakarta, the capital city of Indonesia.

Court proceedings are generally open to the public. Proceedings may be closed to the public in certain circumstances. 

Matters before the Juvenile Court, divorce proceedings before the Religious Court and certain crimes against decency before the General Court are closed to the public, although the decision will be read in an open hearing.

Mandatory court-annexed mediation in civil proceedings is also closed to the public. Matters discussed during this process are kept confidential and cannot be used in subsequent court proceedings (articles 5(1) and 35(3) of the Supreme Court Regulation No 1 of 2016 on Mediation in Court Procedures). 

Pursuant to Article 123 of the Indonesian Civil Procedural Law, parties appearing in court proceedings may be legally represented. A legal representative (advocate) who wishes to appear before a court must obtain an advocate’s licence and be inaugurated by the relevant High Court, usually where the advocate is domiciled (proven by a minutes of advocate oath issued by the relevant High Court). 

If represented, a party must give its legal representative express authorisation to appear on their behalf in the relevant court proceedings under a power of attorney. If the power of attorney is executed outside of Indonesia, it must be notarised in the country where it was executed and consularised at the embassy of Indonesia.

Foreign lawyers are not allowed to appear before the court.

Third-party funding is not regulated in Indonesia. 

Please see 2.1 Third-Party Litigation Funding.

Please see 2.1Third-Party Litigation Funding.

Please see 2.1Third-Party Litigation Funding.

Please see 2.1 Third-Party Litigation Funding.

Contingency fees are not regulated in Indonesia; it is common for a lawyer and client to agree to this type of fee arrangement. 

Please see 2.1Third-Party Litigation Funding.

The Civil Procedural Law does not impose any rules as to pre-action conduct prior to initiating any court proceedings. In practice, however, a plaintiff typically sends a formal demand or warning letter about three times before it initiates court proceedings. This avoids the risk of having a lawsuit declared premature. 

All legal claims expire after 30 years (Article 1967 of the Indonesian Civil Code). While not specified, in practice, the right to bring a claim is taken to accrue from the time the cause of action arises.

In certain circumstances, a shorter time limit is prescribed. For example, claims before the State Administrative Court must be brought within 90 days of the receipt or the plaintiff's awareness of the relevant administrative decision. Limitation periods are treated as a substantive law issue (Article 55 of Law No 5 of 1986 as amended by Law No 9 of 2004 and Law No 51 of 2009). 

A claim must generally be filed in the District Court where the defendant is domiciled or, in the case of multiple defendants, where one of the defendants is domiciled (Article 118 of the Indonesian Civil Procedural Law). 

An exception to this rule is that if the claim involves an immovable asset (such as land), the claim may be filed in the District Court where that asset is located. Another exception is that if the defendant is a foreign party, the claim may be filed in the District Court where the plaintiff is domiciled.

A claim is started with the plaintiff registering the lawsuit with the court registrar at the relevant District Court. In Indonesia, a lawsuit (gugatan) is a document which provides the following information: (i) the identity of the parties (persona standi in judicio), (ii) the reasons of the claim (posita/fundamentum petendi) and (iii) the petition/demand (petitum) (Article 8 (3) of Reglement op de Rechtsvordering). There is no standardised form to be used when filing the lawsuit. A registration fee is payable by the plaintiff. 

A plaintiff is permitted to amend the lawsuit. However, if the amendment is proposed after the defendant submits a response or the first hearing on the matter, it must be approved by the defendant.   

After a claim has been registered with the District Court, the bailiff at the District Court will personally serve a written summons on the defendant to appear in court on the first day of the hearing (Article 121 of the Indonesian Civil Procedural Law). As a general rule, the period between the summons and the hearing must not be less than three working days, unless there are urgent conditions which require the immediate hearing of the dispute (Article 122 of the Indonesian Civil Procedural Law).

If the defendant is a foreign party, the District Court will send the written summons to the Supreme Court. The Supreme Court will prepare a letter enclosing the summons and send it to the Ministry of Foreign Affairs. The letter must be signed by the relevant registrar. After it is signed, the Ministry of Foreign Affairs will issue it with the summons to the diplomatic representative at the embassy of the country where the defendant is domiciled. The diplomatic representative will then arrange for it to be issued to the defendant.

If the foreign defendant does not attend the hearing, the court will adjourn the hearing typically for two months. Where a defendant fails to appear for three hearings despite being summoned, the court will continue the hearings without the defendant.

A defendant will be summoned to appear in court for a maximum of three times, following which the matter will be heard in the absence of the defendant.

If the defendant does not submit its statement of defence/response, the court will examine and rule on the case based on the plaintiff's evidence and submissions. The court will deem that the defendant has not utilised its rights to submit its defence/response.

Similarly, if there are multiple defendants and some have submitted their statement of defence/response and others have not, the court will examine and rule on the case based on the evidence and submissions before it.

Class actions are allowed where a claim relates to the consumer protection law, protection and management of the environment law, forestry law or construction services law (Article 1 (a) of Supreme Court Regulation No 1 of 2002). Where the claim relates to one or more of these areas, one or more plaintiffs may file a lawsuit and represent a group of people with the same substantial legal interest based on similar facts or legal basis. 

Once the initial claim is filed, the court will consider whether the class action is valid. If it is valid, the plaintiff representative (or group of plaintiff representatives) must notify members within the class through the media, through government offices such as sub-district office or court, or even directly to the members. Once notified, a member in the class has the option to opt-out by completing a withdrawal form and submitting it to the court.

There are no requirements to provide clients with a cost estimate. However, in practice, it is common for lawyers to do so.

No pre-action legal remedies are available before a claim is submitted. After a claim has been submitted, available remedies include a provisional decision (putusan provisi), an attachment order (sita jaminan/conservatoir beslag) and an immediate judgment (putusan serta merta /uitvoerbaar bij voorraad). 

The provisional decision and attachment order are discussed in more detail in 6 Injunctive Relief. The immediate judgment is discussed in more detail in 4.2 Early Judgment Applications.

A claimant may apply for an immediate judgment (putusan serta merta /uitvoerbaar bij voorraad) in its lawsuit. The judge may grant an immediate judgement on some or all of the issues in dispute.

Based on Supreme Court Circular Letter No 4 of 2001 in conjunction with Supreme Court Circular Letter No 3 of 2000, a court should only grant an immediate judgment when there is authentic evidence which cannot be denied. For example, parties may tender evidence such as a notarial deed or certificate of ownership. Additionally, the court may also require the plaintiff to provide security of the same value as the value of the object, property, or goods to be attached.

An immediate judgment may be executed even if there is an ongoing appeal filed by the losing party to the High Court or Supreme Court.

In practice, courts rarely grant immediate judgments even if the requirements are satisfied.

Indonesian law does not expressly provide for dispositive motions. However, a defendant may file a demurrer which seeking dismissal of an action on the basis that the District Court lacks the absolute or relative competence to hear the matter. 

For State Administrative Court and class action lawsuits in the District Court, the courts are also empowered to dismiss a case early. 

In a State Administrative Court proceeding, the chairman of the State Administrative Court may conduct a dismissal hearing before a trial. If the lawsuit violates formality requirements (such as failing to meet deadlines for submissions) or if a claim is not within the jurisdiction of the court, the court may immediately reject the lawsuit (Article 62 of Law on State Administrative Proceeding).

Similarly, in a class action lawsuit, the court may dismiss the lawsuit if formality requirements are not satisfied by the plaintiffs, or if there are differing facts or bases of claims between the plaintiffs (Article 5 of Supreme Court Regulation No 1 of 2002).

Under civil procedure law in Indonesia, a third party may be joined to an ongoing dispute (vrijwaring). The disputing parties may make the request for the court to join the third party to the proceeding by submitting a written request.

It is also possible for a third party to join an ongoing proceeding as a co-claimant or co-defendant (voeging) or to protect its own legal interests in the proceeding (tussenkomst). The third party may file a request to join as a party to an ongoing dispute to the court. Such requests will usually be granted where the third party can demonstrate it has a legal interest in the merits of the dispute.

Security for costs is not recognised in Indonesia.

Indonesian courts do not award legal costs. Accordingly, parties are generally expected to pay their own legal costs when making interim applications. 

There is no specific timeframe for granting these types of applications. 

There are no procedures for discovery in Indonesia.

Please see 5.1 Discovery and Civil Cases.

Please see 5.1 Discovery and Civil Cases.

Pleadings are filed with their supporting documentary evidence. The parties may submit any further documentary evidence that they rely on during the evidentiary hearings. 

Under the Article 19 of the Advocates Law in Indonesia, attorneys are required to keep information obtained from their clients confidential even after the attorney-client relationship has terminated. This applies to in-house attorneys as well. 

An exception to this rule is if such information is required by law to be disclosed, for example, in certain criminal investigations. 

Please see 5.1 Discovery and Third Parties.

Pre-action legal remedies or injunctive relief are not available prior to submission of a claim. Following commencement of an action, injunctive relief to prevent further losses to a party may be available by way of a provisional decision (putusan provisi) and an attachment order (sita jaminan/conservatoir beslag).

A provisional decision is usually sought when a lawsuit is submitted. It can only be issued by the judge or panel of judges after a defendant has submitted its defence. The provisional decision is issued pursuant to Article 180 of the Indonesian Civil Procedure Law read in conjunction with SEMA 4/2001 and SEMA 3/2000, which allows an application to prevent one party from selling or transferring goods which are the subject of a dispute. 

An order for an attachment of a party's identifiable assets (sita jaminan/ conservatoir beslag) can be requested at the time of submission of a claim or subsequently. Examples of assets which may be placed under such an order include monies in bank accounts, bank guarantees, moveable and immovable assets.

There are no regulations stipulating the timeframe for granting an attachment order or a provisional decision. There is no provision for these to be granted on an urgent/after-hours basis.

Injunctive relief in Indonesia cannot be made on an ex parte basis.

An applicant may be held liable for damages suffered by a respondent if the injunction is later discharged. In particular, in an application to prevent one party from selling or transferring goods which are the subject of a dispute, SEMA 4/2001 and SEMA 3/2000 require the applicant to provide security of equal value as the goods in dispute to prevent the other party from suffering any losses if the injunction is later discharged.

The Indonesian Civil Procedural Law provides that Indonesian courts may grant injunctive relief against assets located inside and outside Indonesia. However, it is rare for the court to grant such a decision in respect of overseas assets. 

The applicant can only obtain injunctive relief against its opposing party and not a third party.

Where a respondent fails to comply with the terms of a provisional decision, the applicant may apply for enforcement. To obtain an enforcement order – which is granted by the chairman of the relevant district court – the applicant is required to obtain permission from the chairman of the relevant high court. An enforcement order is granted if (i) the provisional decision is necessary to protect the applicant's interest, or (ii) the provisional decision is necessary to preserve the applicant's claim.

If there are particular goods or items to be seized, the applicant may also seek enforcement assistance from the bailiff of the relevant court pursuant to articles 197 to 198 of the Indonesian Civil Procedure Law to seize these items if the respondent refuses to comply.   

Starting civil proceedings in Indonesia first begins with the submission of a lawsuit (surat gugatan) to the chairman of the relevant District Court. Once the lawsuit has been registered, the defendant will receive a letter of summons to appear at a first court hearing where the judge will order mandatory court-annexed mediation based on Supreme Court Regulation No 1 of 2016 on Mediation Procedure in Court. The mediation is typically handled by a different judge. The disputing parties also have the option to proceed with an independent mediator who is not a judge of the District Court.

If mediation is successful, the court may incorporate the parties' agreement into a decision (putusan dading). This decision is final, binding and cannot be appealed. If efforts at mediation fail, the judge will give directions on the filing of written submissions and, subsequently, evidence. Parties may make their submissions verbally or in writing. In practice, most parties submit their arguments in writing with the option to verbally raise these arguments in court.

After submissions of arguments and evidence, a court hearing is scheduled for witness and expert testimonies. Parties are not obliged to exchange written witness and expert testimonies prior to the hearing. Instead, witnesses and experts provide their oral testimony in court. If they do submit a written statement or affidavit, these will be conveyed and examined in court. 

The last stage of the proceedings is the submission of any final written submissions (kesimpulan). The judge or panel of judges will then deliberate and issue an oral ruling in open court. This will be followed by a written judgment which will be issued in due course.

The Indonesian Supreme Court has been progressively migrating the administration of proceedings to an online platform known as e-Litigasi (or e-Litigation). This e-Court system will manage the online submission of documents and handle administration of court schedules, including the submission, exchange, receipt and review of documents such as responses and evidence. Currently, civil, religious, military administrative and state administrative cases are being processed through this platform. On 19 August 2019, the Supreme Court issued the Supreme Court Regulation No 1 of 2019 on Administration of Case and Hearing in the Court through Electronic System with an aim to regulate court procedures using the electronic platform in all courts of first instance by 2020.

Under the Indonesian Civil Procedure Law, there are specific timelines and procedures to which parties have to adhere. While there is no concept of "case management hearings", management of timelines related to a civil proceeding happens across several hearings. In each of these hearings, the judges set down specific dates for subsequent hearings and issue court orders such as the adjournment of hearings for mediation, directions to file responses, directions to present evidence and directions to hear the oral testimonies of factual and expert witnesses. 

For proceedings in the State Administrative Court, the court may embark on a dismissal process which allows the judge to reject a civil suit before the case is being examined. In this process, the judge may request that a plaintiff provide further information or clarification to substantiate its claim.

Indonesia has no concept of jury trials. Instead, civil cases are determined and generally ruled by a panel of three judges, who are the fact-finders and decision-makers on the law. These judges typically publish a joint judgment (putusan), but if there is a dissenting opinion of the member of the panel, the position of the relevant judge will be stated in the decision.

Generally, any party which asserts a fact has the burden of proving that fact. There are five types of evidence which can be presented in civil proceedings.

Written Evidence

Written evidence is presented in the form of ordinary letters, authentic deeds, and privately signed deeds. Any documents presented must be stamped and translated into Bahasa Indonesia if it is in a foreign language.

Witness' Testimony

Witness testimony includes oral testimonies from fact and expert witnesses. There are, however, limitations as to who can appear as witnesses in court. For example, members of the immediate family, relatives, spouses (except in divorce cases), children or the mentally disabled may not be admitted as witnesses.

Inference

Inference is defined under Article 1915 of the Indonesia Civil Code as conclusions which are drawn by the law or the judge from known or unknown events which have taken place. 

Confessions

Confessions may be made in or out of court. A confession made in the court (before the judges) by one of disputing parties, either personally or by its representative, will serve as complete evidence against such party. Such a confession cannot be withdrawn, unless it has been proven that it contradicts events which have taken place. A verbal confession made outside of court cannot be admitted except if it has previously been tendered through other methods, for example, when another witness has previously made this confession in his or her testimony.

Decisive Oaths

Decisive oaths can be ordered by the panel of judges in respect of any dispute of any nature. Decisive oaths are ordered by the court as a form of declaration when parties fail to reach settlement or when there are confessions which cannot otherwise be admitted as evidence. 

Under Article 154 of the Indonesian Civil Procedure Law, disputing parties and judges may invite an expert to provide expert testimony at an open hearing. Such testimony may be submitted as a written affidavit, supported by an oral testimony on its contents at the oral hearing. The judges are allowed to exercise their discretion as to whether to consider the expert testimony.

Hearings are generally open to the public, save for a few exceptions such as divorce, juvenile crimes and crimes concerning acts of indecency (eg, harassment and rape). However, transcripts of hearings are not accessible to the public even on request as they are considered to be part of the case dossier. The public may access judgments and rulings.

Judges tend to take a more passive approach in civil proceedings as compared to criminal proceedings as they are only required to examine arguments and evidence raised by the parties. Moreover, under Article 163 of the Indonesian Civil Procedure Law, parties also have the burden of proving their arguments and evidence raised.

Judgments are usually reserved to a later date and rendered after proceedings have been concluded. However, there are certain decisions which are issued by the court before a hearing on the merits of the case – for instance, an interlocutory decision on the absolute competence of the court. 

The Supreme Court has provided some guidelines on the time limit from the commencement to the conclusion of civil proceedings through the Supreme Court Circular Letter No 2 of 2014. For example, matters within the courts of first instance (ie, District Courts) must be concluded within five months, any appeals to the courts of appeal (ie, High Courts) must be concluded within three months. According to the Supreme Court’s Head Decree No 214/KMA/SK/XII/2014 on Time Period of Case Handling in Supreme Court of Republic of Indonesia, any appeal to the court of cassation (ie, Supreme Court) or judicial review (peninjauan kembali) must be concluded within 250 days. In practice, at the District Court level, a trial is estimated to take six months to a year (or sometimes longer) from the commencement of legal proceedings to the issuance of a judgment.

There are different timelines for other forms of commercial disputes. For instance, in bankruptcy proceedings, the application for bankruptcy needs to be determined by the courts within 60 days from the date of filing. For industrial relations disputes, courts are required to issue their decisions within 50 days from the date of the first hearing.

Parties may choose whether to have their settlement ratified by a court via a court decision or if they would prefer to simply withdraw proceedings. 

Parties to any dispute must attempt to settle their dispute through mandatory mediation at the commencement of civil proceedings (Supreme Court Regulation No 1 of 2016 on Mediation Procedure in Court). Even if parties do not come to a settlement after mandatory mediation, parties may continue to voluntarily negotiate with each other and settle any time during the proceedings (even up to the appeal level at the High Court and Supreme Court).

Once parties have agreed on the terms of settlement, they may decide if they wish to either withdraw the claim or ratify the settlement agreement in court by issuing a court ruling. If parties decide to proceed with the latter, they are required to send the settlement agreement, along with a settlement deed (akta van dading). The settlement agreement and settlement deed would be reviewed by the panel of judges within two days of submission by the parties. In practice, this timeframe may not be strictly followed as there are no sanctions against the court if delay occurs. 

If the judges find problems with the settlement agreement, they may ask parties to revise the agreement with the supervision of the mediator. Once the court is satisfied, the court will ratify the settlement agreement and settlement deed by reading out the deed in court and subsequently issuing a court ruling confirming the terms. The court ruling is final and binding.

While mediation is kept confidential unless otherwise agreed, once the settlement agreement in the form of a deed is ratified in court through a court ruling (through akta van dading) it no longer remains confidential. 

If parties wish to keep the terms of their settlement confidential, parties should consider submitting only a statement indicating that the parties have settled their dispute via a settlement agreement which would be ratified by a court ruling. The full version of the settlement agreement containing the terms of settlement would then rest in the hands of the parties. 

Parties are expected to voluntarily comply once they have signed the settlement agreement. Only settlement agreements which have been ratified by a court ruling (through akta van dading) can be enforced in court. Similar to the enforcement of a local judgment, the applicant seeking enforcement may apply to court for an enforcement order. If the enforcement order is not satisfied, the applicant may apply for an order for the attachment of a party's identifiable assets.

If parties have chosen to withdraw their claim in court, they would have to initiate fresh proceedings for breach of the settlement agreement.

Parties may choose to mutually agree to set aside a settlement agreement, or alternatively, seek the court's assistance through the issuance of a court judgment in setting aside the settlement agreement. There are two grounds on which a settlement agreement may be set aside, as detailed below. 

First, the failure of the settlement agreement to meet formality requirements as stipulated under Supreme Court Regulation No 1 of 2016 on Mediation Procedure in Court, in which the settlement agreement must not include terms which: (i) contravene the law, public order, or morality; (ii) may harm or be detrimental to any third parties; or (iii) are not enforceable.

Second, the settlement agreement has been rendered null and void due to material defects in the agreement. For instance, whether the settlement agreement was drafted based on false information provided.

At the end of a full trial, the court has the power to award certain forms of relief to a successful litigant. However, any decision made by the court will depend on whether it was first pleaded by that party (Article 178 (3) of the Indonesian Civil Procedural Law).

A court has the power to render three types of decision/judgment (putusan), as detailed below

Declaratory Decision (putusan declaratoir)

This is a decision which defines the legal conditions, or rights and duties of parties. For example, making a declaration that one party has breached a condition in a contract, declaring that there was a sales and purchase agreement between the parties, or declaring that an asset or property is not legally owned by a party.

Constitutive Decisions (putusan constitutive)

This is a decision which nullifies, terminates or creates a legal condition. For instance, divorce decisions which state that two individuals are no longer married.

Condemnatory Decisions (putusan condemnatoir)

This is a decision which is punitive in nature as it mandates punishment either through the fulfilment of monetary obligations and/or specific performance. For instance, the court may order a losing party to pay its debt to the winning party or order the losing party to transfer assets to the winning party.

Similar to the rules governing the types of relief that may be granted by a court, Article 178(3) of the Indonesian Civil Procedure Law provides that the court may only award damages which were sought by a party. It may not award more damages than a party has sought. The courts calculate the amount of damages or compensation owed based on the principle of ex aequo et bono (that is, what is fair and just).

In respect of a breach of contract, a party may sue for compensation of costs, damages and interest for the breach (Article 1243 of the Indonesian Civil Code).  Such damages may comprise of actual costs (ie, expenses) incurred, losses suffered and any lost profits which were foreseeable as a result of a defaulting party's action. 

Compensatory damages caused by unlawful acts are also recognised in Indonesia (Article 1365 of the Indonesian Civil Code). Both "material" and "immaterial" damages may also be sought by the plaintiff.

Punitive damages may be awarded by a court even though not expressly provided for in regulations.

Parties may claim interest on top of the costs and losses claimed in any proceedings. 

Post-judgment interest may be granted by the court and is accrued if the losing party does not pay the sums awarded by the court. The State Gazette No 22 Year 1948 stipulates an interest rate of 6% per annum, as does the Indonesian Civil Code (moratoir interest). However, in practice, parties often seek interest based on bank interest rates.

Parties are expected to comply voluntarily with a final and binding domestic judgment. This also means that any decision that is subject to an ongoing appeal at the High Court and the Supreme Court may not be enforced. Unlike decisions pending appeal, a decision subject to a case review (peninjauan kembali) can still be enforced.

In the event of non-compliance, the procedures for enforcement of a final and binding domestic judgment are provided in the Indonesian Civil Procedure Law.

The successful party may submit a petition to the chairman of the relevant District Court to summon the losing party to comply with the court's decision. The chairman of the District Court will order the losing party to satisfy the court's decision within eight days after the order is issued (aanmaning). In the order, the losing party will be requested to make its appearance at a hearing. In practice, however, the chairman may summon the losing party up to three times if the losing party does not show up at the first and second hearings ordered.

Once the losing party has complied with the court order, the chairman will record and issue minutes notifying parties that the order has been fulfilled.

If the losing party continues to refuse, the successful party may submit a request for attachment of the losing party's assets (permohonan sita eksekusi). The chairman of the District Court will issue an attachment order (penetapan sita eksekusi) for the assets to be seized. A bailiff will be appointed to seize the assets. 

Once the losing party's assets have been seized, the successful party may submit a petition for execution to the chairman of the District Court (permohonan eksekusi) for the sale of the seized assets in a public auction. The chairman will issue the order for execution (penetapan eksekusi) allowing the auction of the losing party's assets. Any amount in excess of the sums sought by the successful party will be returned to the losing party. 

The timeframes for such enforcement proceedings are uncertain especially if the losing party's assets are difficult to locate or are in different parts of Indonesia.   

Article 436 of the Reglement op de Rechtsvordering (an Indonesian Civil Procedural Regulation from the Dutch colonial era) provides that a foreign court decision may not be enforced directly in Indonesia. Instead, any successful party has to file a fresh claim in a relevant District Court. The foreign judgment may be used as evidence in support of the new claim. The Indonesian courts, however, are not bound by any decision of the foreign court and have discretion as to the evidentiary weight they ascribe to the foreign judgment.

There are two levels of appeal.

First, parties may appeal a decision from the District Court (which is the court of first instance) in each region to the High Court in each province. This is an appeal as of right, meaning that no leave is required. 

Second, if parties are dissatisfied with the High Court's decision, they may file an appeal (cassation) to the Supreme Court, Indonesia's apex court. This is an appeal as of right. This is the final level of appeal and the decision is final and binding. There are also certain matters such as the rejection of the granting of exequatur (enforcement) for an international arbitration award, the annulment of a domestic arbitration award, bankruptcy, and employment disputes where an appeal may be directly made from the District Court to the Supreme Court.

Separate from appeals is the case review process (peninjauan kembali) which is a restrictive legal remedy against a final and binding decision (the Supreme Court's cassation decision). The case review is only available under limited circumstances such as the provision of false information from one party, deception, or substantial evidence which was not discovered during the earlier proceedings. The submission of a case review will not affect the enforcement of the previous court decision, unless the case review decision states otherwise. 

An appeal to the High Court is considered a "re-examination court" in which the court will re-examine all facts and legal aspects of the case. This is referred to as judex facti examination. This means that the High Court will decide the matter in its entirety based on all evidence and materials which have been presented by the parties in the District Court during the first instance proceeding. This would include parts which have been decided by the District Court even if they have not been appealed (SC Decision No 46 K/Sip/1969, No 1043 K/Sip/1972 and No 194 k/Sip/1975).

In its re-examination, the High Court may, but is not obliged to, consider any additional arguments and references to evidence set out in the memorandum and counter-memorandum of appeal. The High Court also has the power to decide if new evidence or witnesses are necessary.

Article 357 of the Reglement op de Rechtsvordering prescribes that the examination of an appeal should be conducted based only on written documents which have been presented. However, the High Court still has the authority to summon parties or require the attendance of witnesses if it considers that such processes are necessary for its determination of the case. This rarely happens in practice.

An appeal to the Supreme Court is more limited in its review as compared to that in the High Court. The Supreme Court does not review the facts of the case and only decides on matters of law. This is referred to as judex juris examination.

Under Article 30 of the Supreme Court Law (Article 46 of Law No 14 of 1985 on Supreme Court as amended by Law No 5 of 2004 and Law No 3 of 2009), there are only three grounds on which a cassation appeal to the Supreme Court can be filed:

  • the lower court (ie, District Court or High Court) did not have or exceeded its authority – this covers situations when the court was not the competent court to administer the case and when the court granted relief which was not requested by a party;
  • the lower court incorrectly applied or violated the applicable law; or
  • the lower court was negligent in fulfilling the conditions required by the applicable laws and regulations to ensure validity of the relevant decision.

Finally, the case review process is an extraordinary legal remedy and the most restrictive of the three. The grounds on which a case review can be filed are:

  • the judgment was rendered based on fraud or deceit which was only discovered after the judgment was rendered;
  • evidence which existed during the previous proceedings but could not be found, surfaced which could be material to the outcome of the case;
  • the panel of judges exceeded their powers;
  • the panel of judges failed to consider parts of the petition of relief;
  • the decision contradicted another court decision on the same legal dispute and on the same grounds;
  • the panel of judges made mistakes or errors in their judgment.

Appeal to the High Court

A party dissatisfied with the decision of the District Court has to file an appeal to the High Court within 14 days of receiving the District Court's decision. To file an appeal, the appellant is required to sign the Deed of Appeal (Akta Pernyataan Banding) at the District Court and pay the appeal fee. The appellant has the option to submit a Memorandum of Appeal (Memori Banding) setting out the reasons for appeal. The respondent has the option to file a Counter Memorandum of Appeal (Kontra Memori Banding). Submissions of the Memorandum of Appeal and Counter Memorandum of Appeal are not mandatory. According to the Supreme Court Circular Letter No 2 of 2014, appeals to the High Court must be completed within three months. If the examining High Court judges are unable complete the appeal within the timeframe, they must submit a written report to the chairman of the relevant High Court with a copy given to the Supreme Court. There is, however, no sanction on the court if it exceeds the timeframe stipulated. 

Appeal to the Supreme Court

A dissatisfied party (cassation petitioner) has to file the request for cassation within 14 days after they have been notified of the decision of the High Court.  Similar to an appeal to the High Court, the cassation petitioner has to sign a deed of cassation (akta pernyataan kasasi) and pay an appeal fee. Within 14 days of the signing of the deed of cassation, the cassation petitioner is required to file its Memorandum of Cassation (Memori Kasasi), setting out its reasons for appeal. The respondent has 14 days upon receipt of the Memorandum of Appeal to file its Counter Memorandum of Appeal (Kontra Memori Kasasi). According to the Supreme Court’s Head Decree No 214/KMA/SK/XII/2014 on Time Period of Case Handling in Supreme Court of Republic of Indonesia, the Supreme Court must complete the cassation process within a maximum period of 250 calendar days (around eight to nine months) starting from the receipt of the case files until the delivery of Supreme Court’s decision to the district court. Similar to the High Court appeal process, there are no sanctions if the Supreme Court fails to meet the timeline. 

Case Review

Any party disputing a Supreme Court's decision may file a case review application in the relevant District Court, submitting a Memorandum of Case Review explaining the grounds of its application. The application must be filed within 180 days of the ground relied upon. For example, within 180 days of discovery of the fraud affecting the Supreme Court's judgment. The respondent has the option of filing its Counter Memorandum of Case Review within 30 working days from the date it received the Memorandum of Case Review.

As mentioned above, an appeal to the High Court is a re-examination of a case. The High Court will decide the matter in its entirety based on all evidence and materials which have been presented by the parties in the District Court during the first instance proceeding. This would include those parts which have been decided by the District Court even if not appealed. The High Court also has the power to decide if new evidence or witnesses are necessary.

On the other hand, an appeal to the Supreme Court is more limited in scope. The Supreme Court does not review the facts of the case and only decides on matters of law. 

Under the extraordinary legal remedy of a case review, the Supreme Court will review the final and binding decision based on the grounds in 10.2 Rules Concerning Appeals of Judgments.

Apart from meeting the deadlines to file an appeal, there are no further conditions imposed by the court on granting an appeal.

Generally, in an appeal to the High Court, it may:

  • declare that the request for appeal is inadmissible;
  • uphold the District Court's decision;
  • overturn the District Court's decision, re-examine the case and issue a new decision; or
  • overturn the District Court's decision and order the District Court to re-hear the case in proceedings where the District Court had ruled that it had no authority to examine a case but the High Court had ruled otherwise. 

In an appeal to the Supreme Court, it may:

  • uphold the High Court's decision;
  • overturn the High Court's decision and issue a new decision;
  • overturn the High Court's decision and order the District Court to hear or re-hear the case in proceedings where the District Court and/or High Court had ruled that it has no authority to examine the case, but the Supreme Court ruled otherwise.

The claimant is required to pay a registration fee when filing a lawsuit. The fee amount varies from court to court and depends on the number of parties to the dispute. The court may request the claimant to pay an additional fee if the original amount does not cover the relevant administrative costs. Any surplus funds are usually refunded to the claimant at the end of the matter.

Indonesian courts do not award legal costs. However, Indonesian courts can award court costs. Court costs are the costs incurred by the court in administering the matter such as summoning parties to attend the hearing, executing relevant attachment orders, engaging translation services, among other things. These costs are usually borne by the losing party.

As set out at 11.1 Responsibility for Paying the Costs of Litigation, Indonesian courts do not award legal costs. 

However, Indonesian courts can award court costs. Indonesian courts generally order the unsuccessful party to pay the court costs, provided that party has lost on all of its claims (Article 181(1) Indonesian Civil Procedure Law). If the party has only lost on some of its claims, the court may order the parties to bear the court costs in equal proportions. 

As set out at 11.1Responsibility for Paying the Costs of Litigation, Indonesian courts do not award legal costs. However, they can award court costs.  Interest Is not awarded on the court costs. 

Alternative disputes resolution methods are governed by Law No 30 of 1999 on Arbitration and Alternative Dispute Resolution (Arbitration Law). Alternative dispute resolution methods in Indonesia include consultation, negotiation, mediation, conciliation or expert assessment. 

There are no statistics on the use of these alternative dispute resolution methods. However, as a general comment, most parties make every effort to settle their differences among themselves before resorting to more formal dispute resolution methods such as litigation. 

Arbitration has been growing in popularity in Indonesia, evidenced by the emergence of new domestic arbitration bodies such as Bali International Arbitration & Mediation Center (BIAMC) and Badan Arbitrase dan Alternatif Penyelesaian Sengketa Konstruksi Indonesia (Indonesia Construction Dispute Arbitration and Alternative Dispute Resolution Centre – BADAPSKI).

Parties are in most cases required to participate in compulsory court-ordered mediation. If the claimant fails to attend the mediation, the lawsuit may be found inadmissible. If the defendant fails to attend, it will bear the fees of that process.

There are many institutions in Indonesia that offer and promote alternative dispute resolution methods.

The most established institution is the National Board of Arbitration (BANI). BANI facilitates many forms of alternative dispute resolution methods, including arbitration and mediation.

Other institutions include the Indonesia Capital Market Arbitration Board (BAPMI) and the Indonesia Alternative Dispute Resolution Institution for the Banking Sector (LAPSPI) which help resolve disputes within the financial services sector by alternative dispute resolution. The Indonesian Construction Dispute Arbitration and Alternative Dispute Resolution Centre (BADAPSKI) helps resolve construction-related disputes.

Arbitration in Indonesia is governed by Law No 30 of 1999 on Arbitration and Alternative Dispute Resolution (Arbitration Law).

The Arbitration Law provides that arbitration may be used to resolve commercial disputes. Disputes that concern criminal matters, industrial relations, administrative law, bankruptcy or family law cannot be resolved by arbitration.

Under the Arbitration Law, international and domestic arbitration awards are final and binding and cannot be appealed. However, there are certain limited grounds upon which an award may be set aside. 

Under Article 70 of the Arbitration Law, the grounds upon which an award may be set aside are:

  • documents submitting during the arbitration were falsified;
  • an important document that would alter the outcome of the award came to light after the award was rendered; or
  • the award was rendered as a result of fraud.

The grounds on which an international award may be recognised and enforced are limited under Article 66 of the Arbitration Law. The court will consider whether the award:

  • was rendered by an arbitrator or arbitral tribunal in a country which is bound to Indonesia by a bilateral or multilateral treaty on the recognition and enforcement of international arbitral awards;
  • falls within the scope of commercial law under Indonesian law;
  • conflicts with public order; and
  • can be executed in Indonesia.

Foreign awards which involve the Republic of Indonesia as one of the parties to the dispute require an execution order (exequatur) from the Supreme Court.

Indonesia signed and ratified the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and so will recognise and enforce foreign arbitration awards as well as domestic arbitration awards. 

Foreign and domestic arbitration awards are subject to different enforcement procedures under the Arbitration Law. A foreign award is an award issued outside Indonesia. A domestic award is an award rendered within Indonesia. 

Foreign awards are enforced by first registering the award with the District Court of Central Jakarta. The registration must be carried out by the tribunal or its proxy (and not by the parties themselves). There is no time limit for registration of foreign awards. The application for registration must attach an original or certified copy of the award with official translation into Indonesian, the original or a certified copy of the document containing the arbitration agreement and certification from the Indonesian diplomatic mission in the country in which the award was rendered that such country and Indonesia are bound by a bilateral or multilateral treaty on the recognition and enforcement of awards. 

Once the award is registered, the successful party must then apply for an order of exequatur. Once this is issued, the District Court of Central Jakarta will send the exequatur order to the District Court where the losing party is domiciled or has its assets. If the losing party fails to comply with the order, enforcement proceedings can be commenced. A refusal to grant exequatur can be appealed to the Supreme Court, however no appeal is available against a refusal to grant an order.

Domestic awards are enforced by registering the award with the relevant District Court. The registration must be carried out by the tribunal or its proxy. The registration must occur within 30 days of the award being rendered. If the losing party fails to comply with the order, enforcement proceedings can be commenced. 

Oentoeng Suria & Partners in association with Ashurst

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Jakarta Selatan 12910
Indonesia

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Law and Practice

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Oentoeng Suria & Partners in association with Ashurst is a leading full service Indonesian law firm which provides corporate and commercial advice across a wide range of specialisations, including disputes, corporate, M&A and private equity, finance, capital markets, energy and infrastructure, and restructuring to both foreign and domestic entities in Indonesia. Ashurst is a leading international law firm with 27 offices in 16 countries with 400 partners and 1,300 lawyers globally, with a reputation for successfully managing large and complex multi-jurisdictional transactions, disputes and projects and delivering outstanding outcomes for clients. Together, OSP and Ashurst has a market-leading dispute resolution team of over 200 lawyers, including 50 partners, with extensive experience acting for prominent international companies on their most significant disputes. The team works seamlessly across geographic boundaries and is equally at home operating in national courts, in domestic or international arbitration, or before specialist tribunals.

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