Ministry of Law and Human Rights Prepares Global Protocol for Draft Bill on Bankruptcy

Discussions on the revision of Law No. 37 of 2004 on Bankruptcy Proceedings and the Suspension of Debt Payment Obligations (“ Law 37/2004 ”) continue to develop, particularly in relation to the adoption of the UNCITRAL - Model Law on Cross-Border Insolvency (“ MLCBI ”). One of the key substantive issues under discussion concerns the indicators of the Center of Main Interest (“ COMI ”), such as the location of the registered office and the place where the debtor's main assets are managed, which require further clarification.

"In principle, the Draft Bill on Bankruptcy (“ Draft Bill on Bankruptcy ”) has already adopted the structure of the MLCBI; however, a detailed mechanism is still being prepared to ensure its synchronization with the PKPU (Debt Suspension Proceedings) or bankruptcy process in Indonesia," said Endah Widyaningsih, Head of the Sub-Directorate of Civil Law Services at the Directorate General of General Legal Administration (Ditjen AHU), Ministry of Law and Human Rights, to Hukumonline.

Another consideration involves the territorial application of foreign judgments, in accordance with provisions under civil procedural law and international practice. Although Indonesia is not bound by any treaty, several Indonesian bankruptcy decisions have nonetheless been recognized abroad.

“The principle of coordination already exists, but the technical mechanisms are still general in nature,” she added.