Indonesian Private International Law

Afifah Kusumadara

• Publisher: Hart Publishing
• Year: 2021
• ISBN:
  9781509924356
• Edition: 1
• Topic: Derecho
• Subtopic: Conflicto de leyes

This book is the leading reference on Indonesian private international law in English. The chapters systematically cover the whole of Indonesian private international law including commercial matters, family law, succession, cross-border insolvency, intellectual property, competition (antitrust), and environmental disputes. The chapters do not merely cover the traditional conflict of law areas of jurisdiction, applicable law (choice of law), and enforcement. The chapters also look into conflict of law questions arising in arbitration and assess Indonesian involvement in the harmonisation of private international law globally and regionally within ASEAN. Similarly to the other volumes in the Studies in Private International Law - Asia series, this book presents the Indonesian conflict of laws through a combination of common and civil law analytical techniques and perspectives, providing readers worldwide with a more profound and comprehensive understanding of the subject.

1

Introduction

I.The Subject Matter of Private International Law

Private International Law is the term used in Indonesia that governs private legal relations with foreign elements. In the US or the UK, it is known as the conflict of laws. Private International Law in Indonesia primarily deals with choice of law or applicable law. Rules in Indonesian Private International Law are used to determine what law Indonesian courts or authorities must apply to cases of private relations with foreign elements, because the parties, properties, and transactions are located in different countries or involve different nationalities.

The scope of Private International Law in Indonesia is narrower than that of Private International Law in other countries, particularly in Europe, which also has rules on choice of court and enforcement of foreign judgment. With these rules, Private International Law in those countries may restrict the jurisdiction of their courts when judging private cases involving foreigners and require them to recognise and enforce foreign judgments.¹ The constricted scope of Indonesian Private International Law derives from the principal sources of that law, namely Articles 16, 17, and 18(1) of Algemene Bepalingen van Wetgeving voor Nederlandsch Indie (‘AB’) (General Provisions of Legislation for the Dutch East Indies): ²

Statutory provisions governing the status and capacity of persons remain binding for Indonesian citizens (original text: inhabitants of the Dutch East Indies) during their stay abroad. (Article 16 AB)

Concerning immovable property, the law of the country or place where the property is located applies. (Article 17 AB)

Formality of a legal action is determined by the court in accordance with the law of the country or place where the action is performed. (Article 18 paragraph (1) AB)

These rules determine the applicable law in matters related to the status of persons, family matters, real property, and formality. Applicable law in other matters, such as contracts, torts, and status of legal entities, is determined by jurisprudence and doctrine found in the judgments of courts during the Dutch colonial era and following independence.

When involving Indonesian arbitration law, the scope of Indonesian Private International Law could be broadened to include choice of court and enforcement of foreign judgment. Act No 30 of 1999 concerning arbitration and alternative dispute resolution (the Arbitration Act 1999) and Presidential Decree No 34 of 1981 concerning ratification of the 1958 New York Convention, recognises choice of arbitral forum and enforcement of foreign arbitral awards.

In summary, the scope of Indonesian Private International Law is restricted, as the rules only govern choice of law or applicable law for private international cases, such as status of persons, family matters, real property, formality, and so on. Theoretically, the scope may be broadened if arbitration law is included in Indonesian Private International Law, as Indonesian arbitration law deals with choice of forum and the enforcement of foreign arbitral awards.

II.Sources of Private International Law

Because Private International Law is part of national law, the sources of Indonesian Private International Law are the same as the sources of other fields of law in Indonesia, namely:³

(i)Legislations (written law made and issued by State authorities).

(ii)Customary law or usage.

(iii)Jurisprudence (court precedents that are recommended as binding by the Supreme Court and classified as Yurisprudensi Tetap (stable jurisprudence) by the Supreme Court).⁴

(iv)Treaties or international conventions that have been ratified by the Indonesian Government.

(v)Doctrine (legal theories that are regularly considered in court judgments and serve as common references for legal practitioners to support their arguments before the court⁵).

The sources of Indonesian Private International Law come from both the Dutch colonial and post-independence eras, although most come from the former. The legitimacy of colonial law in the Indonesian legal system is based on Article II of the Transitional Provisions of the Indonesian Constitution 1945 (before amendment) that provides, ‘All existing state institutions and regulations remain effective, as long as the new ones have not yet been provided under this Constitution.’ Although the Transnational Provision of Constitution only validates state institutions and regulations of the colonial era, in practice other sources of law, including Dutch jurisprudence and doctrine, remain effective unless they violate Indonesia’s public policy or have been revoked by newer instruments or cases.

As a country that adopted a civil law tradition created by the Dutch, the Indonesian legal system uses codified and written law, or legislation, as the main source of law. Other sources of law have been implemented to support legislation or to fill the legal gap where legislation is silent about a particular subject matter.

Until now, there has not been any codified Private International Law in Indonesia. Subject matter related to Private International Law have been governed by provisions scattered in different acts and regulations. Thus, Articles 16, 17, and 18 paragraph (1) AB mentioned above have become the main sources of Indonesian Private International Law to date. These three articles of the Dutch colonial period stipulate the applicable law in private matters related to the status of persons, family matters, real property, and formality with foreign elements.

The other sources of Private International Law, namely jurisprudence is used to govern private international matters that are not regulated by Articles 16, 17, and 18 paragraph (1) AB. Meanwhile, the courts and authorities also use doctrine such as renvoi, acquired/vested rights, proper law, and public policy (ordre public) when dealing with Private International Law subject matter.

After independence, the Indonesian Government passed several acts that contain provisions related to Private International Law matters. Examples are:

(i)Act No 5 of 1960 (Basic Agrarian Act 1960) has provisions regarding rights of foreigners over land situate in Indonesia.

(ii)Act No 1 of 1974 (Marriage Act 1974) has rules regulating marriages between Indonesians and foreigners (Articles 56–62).

(iii)Act No 23 of 2006 (Population Administration Act 2006), as amended by Act No 24 of 2013, has provisions regarding the civil status registration of Indonesian citizens outside Indonesia.

Further, the government has issued regulations that have become important sources of Indonesian Private International Law. Example are:

(i)Government Regulation No 54 of 2007 concerning procedures of adoption has provisions that govern intercountry adoption involving Indonesian children or Indonesian parents.

(ii)Presidential Decree No 34 of 1981 concerning ratification of the 1958 New York Convention, as further implemented by Supreme Court Regulation No 1 of 1990, sets out procedures for the enforcement of foreign arbitral awards.

These post-independence acts and regulations complement Articles 16, 17, and 18 paragraph (1) AB as well as jurisprudence and doctrine that has existed since before independence.

To date, Indonesia has not joined international treaties or conventions in the fields of Private International Law, except for the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (popularly known as the New York Convention) and the 2001 Convention on International Interests in Mobile Equipment and its Cape Town Protocol.

Regarding legislation as the main source of Indonesian Private International Law, a hierarchy of legislation must be respected when dealing with Private International Law subject matter. According to a principle called Lex superior derogat legi inferiori, lower hierarchy legislation cannot conflict with higher legislation. The lower hierarchy legislation can be used independently only when the higher sources of law are silent on particular subject matter.

Based on Article 7 and its elucidation of Act No 12 of 2011 concerning the formulation of legislation (Formulation of Legislations Act 2011), the hierarchy of legislation in Indonesia is as follows:

(i)The 1945 Constitution.

(ii)Decrees of People’s Consultative Assembly.

(iii)Acts/Government Regulations in lieu of Acts.

(iv)Government regulations.

(v)Presidential regulations.

(vi)Provincial regional regulations, including the Qanun applicable in Aceh Province, special regional regulations, and provincial regional regulations applicable in Papua Province.

(vii)Regency/city regulations, including the Qanun applicable in regencies/cities in Aceh Province.

Aside from the above-listed legislation, Article 8 of the Formulation of Legislations Act 2011 also recognises regulations made by the state apparatus, such as Supreme Court regulations, Parliament regulations, minister regulations, and so on.

The position of treaties or international conventions that have been ratified by the government within the hierarchy of legislation is not mentioned in the Formulation of Legislations Act 2011. Therefore, the status of ratified treaties or conventions as part of Indonesia’s legislations is not clear. Although Article 11 of Indonesian Constitution recognises treaties, it does not stipulate whether a treaty shall become a law in Indonesia after being approved by the Parliament. In 2000, the government passed Act No 24 concerning international agreements (the International Agreements Act 2000). Like the Constitution, this Act does not mention when a treaty or convention becomes part of Indonesian law after being ratified or approved. The Act basically only governs the process of entering international agreements and other formalities. In addition, no stable jurisprudence exists to determine the position of ratified treaties in Indonesian law.⁶ This situation raises questions about the role of treaties as a source of law in Indonesia. Legal scholars of this issue conclude that, in practice, a treaty or convention that has been ratified by the government and Parliament may not form part of Indonesian law until it is transformed into domestic legislation, such as by an Act or another type of regulation.⁷ As a consequence, Indonesian authorities and courts may not implement a ratified treaty until it has been transformed into an Act or regulation. An example of this practice is the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards that was ratified by the Presidential Decree No 34 of 1981. After ratification of the Convention, the Supreme Court maintained its refusal to enforce foreign arbitral awards. In the case of P.T. Nizwar v Navigation Maritime Bulgare, the Supreme Court held that while acknowledging the ratification of the 1958 New York Convention, Indonesian courts could not enforce foreign arbitral awards due to the lack of implementing regulations setting out in what court a request to enforce the awards should be filed and whether the Supreme Court should determine if an award violates Indonesian public policy.⁸ Only after the Supreme Court issued Regulation No 1 of 1990 concerning the procedure for enforcing foreign arbitral awards, nine years after ratification, was the Convention implemented, thereby becoming part of Indonesian law enabling courts to enforce foreign arbitral awards. As such, while treaties are a source of Indonesian Private International Law, a ratified treaty may not be part of Indonesian Private International Law until an Act or regulation has been passed to implement it. In practice, the implementation of a treaty into Indonesian law may take many years after ratification.

As demonstrated, the sources of Indonesian Private International Law are the same as those of other fields of law in Indonesia. However, most come from the Dutch colonial era. There is no codified Private International Law in Indonesia. Provisions governing private international matters are scattered in different legislation from the pre-independence and post-independence eras. A ratified treaty, as one source of Private International Law, may not become l...