Legal Alert: Issuance of Guideline for Enforcement at the District Court

/ / 2019, Legal News, Legal News 2019

Author: Narada Kumara, Aby Haryono, Michelle Yosefanny

Earlier this year, the Director General of General Judicature at the Supreme Court of the Republic of Indonesia (“Supreme Court”) issued Decree No. 40/DJU/SK/HM.02.3./1/2019 regarding Guideline for Enforcement Process at the District Court (“Enforcement Guideline”). This Enforcement Guideline serves as a compilation of 24 other laws and regulations related to the enforcement of court decisions, mediation/settlement resolutions, arbitration award (national and international/foreign), decisions from the industrial court (Pengadilan Hubungan Industrial), executorial deed (grosse akta), security execution (eksekusi jaminan) and other quasi-judicial decisions (KPPU, BPSK and PPID).

In general, the enforcement process in Indonesia can be challenging and lengthy. There are many procedural and bureaucratic issues confronting the enforcing party that are not properly addressed by the relevant Indonesian laws or the prevailing civil procedural law. Prior to the issuance of the Enforcement Guideline, there were no clear standard operating procedures for enforcement process at the district courts. As such, each district court could have its own standard and procedure for the enforcement process and as a result the enforcing parties can expect to face delays and other obstacles, due to complicated enforcement procedures.

Development of this disturbing practice prompted the Supreme Court to issue the Enforcement Guideline. The Enforcement Guideline provides standard operating procedures which should apply for enforcement process at all district courts in Indonesia. The Enforcement Guideline could also help to eliminate (or at least reduce) any undue delay on enforcement process at the district courts.

In addition, we note that the Enforcement Guideline also made an interesting point to address conflict due to Article 50 of Law No. 1 of 2004 on State Treasury, which stipulates that the assets and money of state/regional owned enterprises (BUMN/BUMD) or government institutions cannot be confiscated by the court (including for enforcement purpose). In this regard, the Enforcement Guideline regulates that the Chairman of District Court may issue an enforcement order which ordering the petitionee (i.e. state/regional owned enterprise/government institution) to budget the payment obligation into the State Budget of current or next fiscal year. The Enforcement Guideline also clarifies that the said Article 50 shall not be applicable to confiscation upon the assets of listed state owned enterprises (BUMN Perseroan Tbk).

We hope that implementation of the Enforcement Guideline could help to streamline and simplify the enforcement process applicable to all district courts in Indonesia. Further, it is also expected that the Enforcement Guideline will simultaneously bring positive impact to the quality of Indonesia’s judicial process index.

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