Indonesia

On 6 August 2019, the Supreme Court (“SC”) issued Regulation No. 4 of 2019 (“SC Reg 4/2019”), amending the previous regulation, SC Regulation No. 2 of 2015 on the Procedure for the Resolution of Small Claims Lawsuit (“PreviousRegulation”). SC Reg 4/2019 came into force on 20 August 2019.

In general, SC Reg 4/2019 provides more optimal and effective regulation than the Previous Regulation. Under SC Reg 4/2019, there is an increase in the maximum threshold for material claims and an introduction to an e-court system for the small claims lawsuit, with the same settlement period which is within 25 (twenty five) days since the first hearing under the Previous Regulation.

SC Reg 4/2019 addresses, among others, the following matters:

Maximum Material Claims Threshold

One of the criteria under the Previous Regulation was the threshold for material claims which could be brought through a smallclaims lawsuit. This has now been increased from Rp 200,000,000.00 (two hundred million Rupiah) per case under the Previous Regulation to Rp 500,000,000.00 (five hundred million Rupiah), approximately USD 35,000 (thirty five thousand United States Dollar), per case under SC Reg 4/2019.

The Jurisdiction of the Disputing Parties

The Previous Regulation required the plaintiff and the defendant to be domiciled in the same jurisdiction. However, SC Reg 4/2019 now allows the plaintiff to file a small claims lawsuit against the defendant a different jurisdiction, with a requirement that the plaintiff must submit the lawsuit through a proxy, incidental proxy or representative, appointed through an assignment letter issued by the plaintiff’s institution domiciled in the jurisdiction of the defendant.

Proxy

In spite of the flexibility of submitting the lawsuit through a proxy if the plaintiff is domiciled in the different jurisdiction from the defendant, both the plaintiff and the defendant are still required to personally attend all of the legal proceedings. However, underSC 4/2019, now both parties must attend the proceedings with their proxies, incidental proxies or representatives, instead ofattorneys, as previously required under the Previous Regulation.

The Synchronization of the E-Court

SC 4/2019 has added a new article which allows disputing parties to manage the administration of their cases through the e-court system. The e-court system was introduced by SC Regulation No. 1 of 2019 on the Administration of Cases and LegalProceedings in Courts via Electronic Means.

Legal Remedy

The Panel of Judges may grant a verstek ruling against any defendant who fails to attend the first hearing after having beensummoned properly for a second time. However, SC Reg 4/2019 offers a legal remedy for defendants in such cases, as they arenow able to challenge such rulings by filing a verzet. However, a verzet may only be submitted within 7 (seven) days of verstekruling being granted.

Security Seizures

The Panel of Judges may order the security seizure of the assets of a defendant or the assets of the plaintiff which are currently inthe possession of the defendant. They do not have this authority under the Previous Regulation.

The Procedure for the Execution of the Ruling

Under the Previous Regulation, any ruling was considered legal and binding, if no objection was filed against the ruling. A ruling had to be executed voluntarily.

Under SC 4/2019, the head of the district court may issue a reprimand (aanmaning) within seven days of receiving a requestfor the execution of the ruling. The execution required under the aanmaning should be completed within 7 (seven) days of being issued, extendable if geographical constraints hinder its enforcement.

* * * * *

M&T Advisory is an email publication prepared by the Indonesian law firm, Makarim & Taira S. It is only intended to informgenerally on the topics covered and should not be treated as a legal advice or relied upon when making investment or businessdecisions. Should you have any questions on any matter contained in M&T Advisory, or other comments generally, pleasecontact your usual M&T contact or advisories@makarim.com.

 

*****

Contacts:

Alexandra Gerungan – alexandra.gerungan@makarim.com

Annisa Tharian – annisa.tharian@makarim.com

Related Articles by Firm
Reminder – Requirement in the OSS System for companies to adjust their Business Classification Code
This joint notice requires limited liability companies to adjust their purpose and objectives.
Requirement to use the Indonesian language is regulated further
Indonesia has finally issued an implementing regulation of the Language Law.
BKPM amends its regulation on the procedures for licence and investment facilities
Divestment and foreign directors and commissioners’ requirements.
Indonesia's new regulation on e-litigation
The Supreme Court aims to have e-litigation operating in all courts of first instance by early 2020.
New government regulation on organisation of electronic systems and transactions
The Government of Indonesia finally issued Government Regulation No. 71 of 2019 on Organisation of Electronic Systems and Transactions on 4 October 2019, gaining momentum as the country sees the rise of ‘unicorns’ and President Joko Widodo boasting about the country’s digital economy ...
New decree on foreign workers in Indonesia
The Ministry of Manpower has issued a codified list of businesses in which foreign employees may be employed.
Regulating the sale and provision of digital content through mobile cellular networks
Regulations on digital content are becoming more relevant as investor interest in the Indonesian market rises.
Joko Widodo re-elected: How will it affect doing business in Indonesia?
In his election campaign, Jokowi declared nine missions ...
Indonesia: New regulation on Foreign Construction Representative Offices and Construction Foreign Investment Companies
On 13 June 2019, the Minister of Public Works and Public Housing issued Regulation No. 09/PRT/M/2019 on Guidelines on Licensing Services for Foreign Construction Business Entities ...
Settlement of disharmony between laws and regulations through mediation
On February 12, 2019, the Minister of Laws and Human Rights (MOLHR) issued Regulation No. 2 of 2019 on The Settlement of Disharmony between Laws and Regulations through Mediation (MOLHR Reg 2/2019), which came into effect on February 14, 2019 ...
Bank Indonesia issues a new regulation on the reporting of foreign exchange flows
Bank Indonesia (BI) recently issued Regulation No. 21/2/PBI/2019 on the Reporting of Foreign Exchange Flow Activities ...
Related Articles
Reminder – Requirement in the OSS System for companies to adjust their Business Classification Code
This joint notice requires limited liability companies to adjust their purpose and objectives.
Slightly more clarity: Economic Substance Regulations in the DIFC
The new guidance is helpful for businesses in the DIFC, but significant questions still remain.
Requirement to use the Indonesian language is regulated further
Indonesia has finally issued an implementing regulation of the Language Law.
Related Articles by Jurisdiction
New regulations bring big changes to the Indonesian manpower sector
Two recently released regulations have introduced important changes to the Indonesian manpower sector. While the changes should generally be welcomed by the business ...
New Manpower Regulation Eliminates Controversial Work Permit Requirements in Indonesia
Indonesia eases requirements for work permits of expatriates working in the country.
Projects & Energy Special Report: Indonesia – Power struggle
Recent years have been challenging for the power sector in Indonesia. Despite the government’s ambitious target to install 35,000MW of new capacity by 2019, the development of the electricity sector has not gone at the expected pace ...
Latest Articles
Reminder – Requirement in the OSS System for companies to adjust their Business Classification Code
This joint notice requires limited liability companies to adjust their purpose and objectives.
Slightly more clarity: Economic Substance Regulations in the DIFC
The new guidance is helpful for businesses in the DIFC, but significant questions still remain.