Implementation of Cross-Border Bankruptcy will Adopt UNCITRAL Principles

The government is preparing a Draft Bill (“Draft Bankrutpcy Bill”) on the Amendment to Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations, as amended several times, most recently by Law No. 4 of 2023 on Development and Strengthening of the Financial Sector (collectively referred to as “UU 37/2004”).

The matters studied in the framework are the implementation of cross-border bankruptcy in several countries and their relationship to the United Nations Commission on International Trade Law (“UNCITRAL”).

“The discussion directs whether the foreign process in question is the implementation of the decision or also the process. Then the mechanism is at the Supreme Court and the appointed court, foreign access, to the curator who will handle it,” a source in the government told Hukumonline.

Cross-border bankruptcy will adopt some of the UNCITRAL Model Law regulations with four main regulations, namely access, cooperation, recognition, and management and settlement.

Other considerations regarding foreign decisions that are territorially valid are based on the provisions of civil procedure laws and practices abroad. Although Indonesia is not bound by the agreement, several Indonesian bankruptcy decisions are still recognized.