Deputy Chief Justice Aswanto reading out the Court’s legal considerations at the ruling hearing of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment, Wednesday (12/15/2021). Photo by Humas MK/Ifa.
Wednesday, December 15, 2021 | 19:55 WIB
JAKARTA, Public Relations—The provision that ruled out legal avenues against decisions on suspension of debt payment (PKPU) was declared conditionally unconstitutional by the Constitutional Court (MK).
“[The Court] grants the Petitioner’s petition in part; declares 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 insofar as not interpreted to mean “the authorization of legal action against the decision on a petition of Suspension of Debt Payment filed by the creditor and the rejection of the debtor’s reconciliation offer,” said Chief Justice Anwar Usman reading out the Decision No. 23/PUU-XIX/2021.
Also read: Absence of Cassation for Bankruptcy Cases Challenged
Possible Error
In its legal considerations, read out by Constitutional Justice Suhartoyo, the Court believes that when the creditor files for a PKPU petition and the reconciliation that the debtor offers is denied by the creditor, there might be contention between these parties. Judges at the lower courts could potentially be impartial or apply the law erroneously.
“The Court believes there should be a legal avenue in the event that the PKPU petition filed by the creditor and the reconciliation offer from the creditor is denied by the creditor,” Justice Suhartoyo said.
Also read: Rejecting Bankruptcy Ruling, Petitioner Challenges Bankruptcy Law
Essence of PKPU Petition
The Court considered that PKPU petitions are cases that require immediate legal certainty in business and concerns the stability of the state economy. This is in line with the elucidation of Law No. 37 of 2004, “To facilitate the business community in their efforts to settle their debt obligations in a fair, speedy, open and effective manner, a legal instrument is needed.” Therefore, Justice Suhartoyo added, one level of opportunity of legal avenue shall be opened to anticipate the possibility of erroneous application of the law by the judges at the lower courts.
“The Court came to the conclusion that the most appropriate legal avenue is cassation (without the right to file for a judicial review petition). Meanwhile, in the event that the PKPU petition filed by the creditor and the debtor’s reconciliation offer is accepted by the creditor, no legal avenue is relevant,” he said at the ruling hearing on Wednesday afternoon, December 15, 2021.
He added that, as a juridical consequence that cassation/appeal to PKPU petitions by the creditor and the rejection of the debtor’s reconciliation offer, other articles in Law No. 37 of 2004 that were not petitioned in this case but are affected by the a quo decision must apply according to the decision of this case.
“Similarly, in order to further regulate the mechanism of the filling of the legal avenue of cassation as considered in the above, the Supreme Court shall immediately make a regulation in relation to the procedure to file the legal avenue of cassation against the PKPU decision [on a petition] filed by creditor where the debtor’s reconciliation offer is denied by the creditor,” Justice Suhartoyo stressed.
He then said that, based on the aforementioned legal considerations, the Court is of the opinion that Article 235 paragraph (1) and Article 293 paragraph (1) of Law No. 37 of 2004 is unconstitutional and not legally binding if legal action against the decision on PKPU petition filed by the creditor and the rejection of the debtor’s reconciliation offer is excluded. However, judicial review on the PKPU decisions is not justified in order to avoid increase of number of cases in the Supreme Court and for the sake of legal certainty in business.
“In addition, because the nature of bankruptcy and PKPU cases are speedy, the Petitioner’s argument on the unconstitutionality of Article 295 paragraph (1) of Law No. 37 of 2004 is legally groundless,” Justice Suhartoyo said.
Also read: Govt: Provision Eliminating Judicial Review and Cassation on Bankruptcy Ruling Provides Legal Certainty
Change of Stance
In its legal considerations read out by Deputy Chief Justice Aswanto, the Court connected the a quo petition and the Decision No. 17/PUU-XVIII/2020 that Article 235 paragraph (1) and Article 293 paragraph (1) of Law No. 37 of 2004 is constitutional. After reviewing the petition and the decision in that case, the background issue was not related to “so that a legal avenue can be taken against PKPU decisions on petitions filed by the creditor.” As such, the Court believes that a change of stance in the a quo case is justified because of the fundamental issue on said legal avenue.
“Especially the testimonies from the Relevant Parties—the Supreme Court and IKAPI. Therefore, such a change of stance is justified and constitutional insofar as it has ratio legis that can be accounted for, which the Court has elaborated in the aforementioned legal considerations,” Justice Aswanto said.
Also read: IKAPI: Judicial Review and Cassation over PKPU Decisions Necessary
The case No. 23/PUU-XIX/2021 was filed by PT Sarana Yeoman Sembada, represented by executive director Sanglong a.k.a. Samad. He challenged 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 contrasted this lack of legal action to cassation and judicial review that are commonplace in district courts, high courts, and the Supreme Court. Cassation and judicial review can mitigate any erroneous ruling in a lower court although they do not suspend or prevent a court ruling.
Therefore, the Petitioner requested that the Court declare the a quo articles unconstitutional and not legally binding, so that cassation and judicial review petitions can be filed to the Supreme Court for such cases.
Writer : Utami Argawati
Editor : Lulu Anjarsari P.
PR : M. Halim
Translator : Yuniar Widiastuti (NL)
Translation uploaded on 12/17/2021 10:30 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.
Wednesday, December 15, 2021 | 19:55 WIB 325