Substance of Cross-Border Insolvency Inputs in the RUU

The government is discussing the substance of cross-border insolvency. This becomes part of the Bill on Amendment to Law No. 37 of 2004 on Bankruptcy Proceedings and the Suspension of Debt Payment Obligations (“Law 37/2004”).

“We are still in discussions. Referring to the academic manuscript, we are guiding the implementation based on international agreements or reciprocal relationships,” said a source to hukumonline.com. The initial substance, the governmnet aims to direct recognition based on a special agreement.

The government regards the current substance as highly protective of Indonesian creditors and debtors. However, issues of an international nature, including the recognition of foreign creditors and foreign court decisions, are addressed through special mechanisms established by specific international agreements.

Currently, the development includes a proposal regarding the substance of cross-border insolvency within the amendment to the draft regulation. “The team is still conducting a comprehensive review and consideration of the draft. It requires official input from a study that can be submitted institutionally, particularly from the Indonesia’s Supreme Court, due to the associated technicalities,” he explained.