Draft Bill on PIL Regulates Cross-Border Digital Contract Disputes

The Draft Bill on Private International Law (“PIL Draft Bill”) will regulate legal certainty in cross-border digital transactions, particularly in relation to electronic contracts. This regulation is currently being deliberated by the House of Representatives (DPR) of the Republic of Indonesia and the Government.

“The Private International Bill is necessary as a guideline for judges in handling cross-border civil cases, which to date still rely on the Civil Code that does not contain comprehensive private international law norms to resolve complex disputes,” stated Hinca Panjaitan, Member of Commission III of the DPR RI.

Based on the draft obtained by Hukumonline, provisions on digital contracts are set out in Article 54, which stipulates that law unilaterally determined in electronic transactions may be declared valid and binding. In addition, the regulation also governs procedures in the event of cross-border business disputes, including the determination of applicable law where the parties have not stipulated a choice of law at the outset.

The PIL Draft Bill is expected to provide stronger legal certainty for business actors and foreign investors, while also serving as an effort to modernize national law, particularly in the digital economy sector.