House Commission III Misbakhun testifying virtually at the judicial review hearing of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment, Monday (10/18/2021). Photo by Humas MK/Ifa.

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Monday, October 18, 2021 | 21:17 WIB

JAKARTA, Public Relations—The provision that eliminates judicial review and cassation on bankruptcy and suspension of debt payment (PKPU) as regulated in Article 235 paragraph (1), Article 293 paragraph (1), and Article 295 paragraph (1) of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (PKPU) provides legal certainty, said Min Usihen, expert staff for social affairs of the Ministry of Law and Human Rights at a hearing on Monday, October 18, 2021.

“The norm of the a quo articles provides legal certainty for PKPU, for both debtors and creditors, in order to prevent bankruptcy. Therefore, [it] specifically distinguishes bankruptcy in general and that due to PKPU specifically. There is also PKPU petition that can be processed at the same time as a bankruptcy petition in the commercial court,” he said in response to case No. 23/PUU-XIX/2021.

However, he added, a PKPU petition is prioritized in the trial. In the event that bankruptcy and PKPU are processed simultaneously in the commercial court, the PKPU petition must be ruled first. This also applies if it is filed after a bankruptcy declaration is requested.

“There are several differences of the legal measures for ruling on bankruptcy and PKPU. A PKPU ruling is not subject to any other legal measure, while a bankruptcy ruling can be subjected to cassation and judicial review in the Supreme Court,” Usihen said at the hearing chaired by Chief Justice Anwar Usman.

Also read: Absence of Cassation for Bankruptcy Cases Challenged

Declaration of Bankruptcy

Usihen also said that, based on the objective of Law No. 37 of 2004, the requirements for declaration of bankruptcy are not based on suspension of payment or inability to pay debts, but on the defaulting of debt that has been due and is collectible.

“In other words, in the KPKPU Law, as long as the debtor is proven not to have paid [the debt], it doesn't matter whether they do not pay because they don’t want or are unable to, or whether the debtor is healthy or insolvent. The debtor then can be declared bankrupt by the commercial court,” he said.

He also said that Law No. 37 of 2004 stipulates that the confiscation that has been carried out shall be null and void and, if necessary, a supervisory judge shall order it be eliminated. The confiscation in question is a general confiscation known in civil law as a joint guarantee of all creditors for payment of the debtor’s civil obligation to the other party. “As a general confiscation institution in the settlement of debtors’ debts, bankruptcy is seen as a way out for debt problems between debtors and creditors,” he said in response to case No. 24/PUU-XIX/2021.

Objective of PKPU

House Commission III Misbakhun also said that in the merit of the case No. 23/PUU-XIX/2021, the provision in Law No. 37 of 2004 has provided clear legal mechanism through PKPU with the objective of a reconciliation between the parties regarding the restructuring of the debtor’s debt to the creditor, in which the debtor is expected to pay the debt by way of peace.

He added that creditor has the same position and rights over all the debtor’s property. The debtor’s assets are a joint guarantee for the creditors in proportion except when there is a right of priority in receiving payment of the bill. The provision clarifies that the PKPU petition must be submitted at the first hearing of the bankruptcy declaration examination. The decision must be passed first if the PKPU petition is filed the bankruptcy declaration.

“This is in line with the intent of the a quo law. To resolve the debt fairly, quickly, openly, effectively, and to promote peace between debtors and creditors through PKPU, as opposed to bankruptcy that has a legal impact in the form of general confiscation of all of the debtor’s assets and the loss of the debtor’s civil claim to their assets,” Misbakhun said.

Also read: Rejecting Bankruptcy Ruling, Petitioner Challenges Bankruptcy Law

Provision on Legal Measure

In response to case No. 23/PUU-XIX/2021, Misbakhun explained that PKPU is a forum for collective peace between debtors and creditors that involves the court. This is confirmed by the role of the court in approving settlement as regulated in Article 285 paragraph (1) of Law No. 37 of 2004, which stipulates that the court could reject or confirm a settlement. If the court refuses to ratify the settlement, in the same ruling the court must declare the debtor bankrupt as per Article 285 paragraphs (2) and (3) of the a quo law.

“This rejection of settlement cannot be subjected to any further legal action as stipulated in Article 285 paragraph (4) of the KPKPU Law. However, if the court approves the settlement, the ruling can be subjected to a legal action as stipulated in the a quo law,” Misbakhun explained.

In addition, he added, the regulation that stipulates that no legal action can be carried out against the PKPU or bankruptcy ruling preceded by a PKPU petition in Article 235 paragraph (1) and Article 290 of the a quo law is reinforced by a Supreme Court circular letter on the implementation of the Supreme Court plenary meeting in 2015 as shown in the guidelines of implementation of duties for court implementers in judicial practice.

The legal remedies in Article 295 paragraph (1) of Law No. 37 of 2004 only apply to bankruptcy rulings without PKPU process, while those with PKPU process cannot be subjected to any legal remedy including judicial review. The provision of Article 235 paragraph (1), Article 293 paragraph (1), and Article 295 of Law No. 37 of 2004 are bound and inseparable because they are motivated by the goals and background of the PKPU institution itself.

Impact of Bankruptcy Ruling

Misbakhun also said that the purpose of bankruptcy in Law No. 37 of 2004 is to prevent debtors from taking actions that are detrimental to creditors and to protect congruent creditors from obtaining their rights, to provide opportunities for debtors and creditors to restructure debt, and to provide protection to debtors with good intentions by means of debt relief.

He said that this actually helps the debtors, in this case the Petitioners, to resolve their debts and also other concrete cases of the Petitioners related to collateral assets for those debts.

“Based on all the above, it is clearly illustrated that the purpose of the enactment of Law No. 37 of 2004 is to provide guarantee of legal certainty, justice, and benefits for creditors in general in the perspective of the public interest in the bankruptcy process.

Also read: House and Govt Not Prepared, Hearing on Bankruptcy Law Postponed

The case No. 23/PUU-XIX/2021 was filed by PT Sarana Yeoman Sembada, represented by executive director Sanglong a.k.a. Samad. He challenges Article 235 paragraph (1) and Article 293 paragraph (1) of the PKPU Law. He had been involved in several concrete cases on PKPU. His evidence for three previous cases was rejected. However, he received a different bankruptcy ruling in his fourth case. With the same evidence as the three previous cases, the fourth was accepted by the court, resulting in a positive ruling.

The Petitioner believes the two articles violate the 1945 Constitution and have been challenged and decided in the Decision No. 17/PUU-XVIII/2020, in which the entire petition was rejected. However, the case concerns the uncertainty of curator fees, which led to the bankruptcy declaration of PT Korea World Center Indonesia. Meanwhile, the current petition concerns inaccurate material evidentiary process that is in violation of justice and harms the Petitioner.

Therefore, in the initial petitum, the Petitioner requested that the Court declare Article 235 paragraph (1) and Article 293 paragraph (1) of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment unconstitutional and not legally binding, so that cassation and judicial review petitions can be filed to the Supreme Court for such cases.

Meanwhile, the case No. 24/PUU-XIX/2021 was filed Calvin Bambang Hartono, a debtor at PT Bank Bukopin who took a loan with collateral in the form of land and property totaling 538 m2 under the name of Tjandra Liman with Ownership Certificate No. 189/Panjangjiwo Village. However, he has not received a land mortgage deed (APHT) of the loan.

At the preliminary hearing, he stated that Article 31 paragraph (1) of the Bankruptcy Law didn’t give any room for any individual, business, or legal entity that has been declared bankrupt when they, like the Petitioner, has taken legal measures on their case. In the petitum, the Petitioner requests that the Court declare the phrase “The decision of declaration of bankruptcy shall have the consequences that all judgment related to any part of Debtor’s assets established before the declaration of bankruptcy shall be immediately ceased and as from that moment no decisions concerning imprisonment for debt may be executed” as referred to in Article 31 paragraph (1) of Law No. 37 of 2004 not legally binding.

Writer    : Utami Argawati
Editor   : Lulu Anjarsari P.
PR        : M. Halim
Translator : Yuniar Widiastuti (NL)

Translation uploaded on 10/19/2021 09:26 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

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