Bankruptcy Law Reducing Authority, Curators Files Petition

The Petitioners’ legal counsel Donny Tri Istiqomah conveying the petition at the preliminary hearing of the judicial review of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment, Wednesday (2/8/2023). Photo by MKRI/Ifa.

Wednesday, February 8, 2023 | 15:33 WIB

JAKARTA (MKRI) — The Constitutional Court (MK) held the preliminary hearing for the judicial review of Article 31 paragraph (1) of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment (Bankruptcy Law) and its elucidation on Wednesday, February 8, 2023. The case No. 11/PUU-XXI/2023 was filed by curators Umar Husin, Zentoni, Sahat Tambunan, Paulus Djawa.

Article 31 paragraph (1) of the Bankruptcy Law reads, “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.”

Through legal counsel Donny Tri Istiqomah, the Petitioners asserted that said article had led to legal uncertainty as they have been in constant legal debates with separatist creditors whose debtors defaulted. Such creditors reject compliance with the article, thus, leading to complete elimination or at least reduction of the Petitioners’ authority to take over and sell assets of the defaulted debtors, which are in fact granted by the Law.

There is indeed special treatment for separatist creditors, who can also execute bankruptcy as per Article 55 of the Bankruptcy Law, but not without following procedure as set in Articles 56-59 of the Law.

“The elucidation to this article does not specify any time limit for separatist creditors to sell [debtors’] assets, so this harms curators’ rights,” Donny said before Constitutional Justices Enny Nurbaningsih (panel chair), Suhartoyo, and M. Guntur Hamzah.

Therefore, the Petitioners requested that the Court declare the elucidation to Article 31 paragraph (1) of the Bankruptcy Law legally invalid and repeal it due to the ambiguity of Article 31 paragraph (1), which has impaired the Petitioners’ constitutional rights, led to injustice and legal uncertainty, and is in violation of Article 28D paragraph (1) of the 1945 Constitution.

Justices’ Advice

Constitutional Justice Suhartoyo advised the Petitioners to elaborate their legal standing and their assumed constitutional rights as curators, to explain the unusual petitum and observe past petitions. “Do not let there be any contradictions between one petitum and the others, whether to request [the entire norms be declared] unconstitutional or conditionally unconstitutional,” he said.

Constitutional Justice M. Guntur Hamzah advised them to explain their constitutional impairment by adding the Constitutional Court Regulation (PMK) No. 2 of 2021, especially Article 4 paragraph (2). He also commented on the confusing petitum and posita, which could lead to a vague petition.

“In your posita, you explain that the elucidation explains, but not make a new norm. However, in the petitum, you admit and add the phrase ‘Article 59.’ It must be clear whether you do not question the elucidation but add the phrase ‘Article 59’ or whether the elucidation is unconstitutional. These are two different contexts,” he explained.

Lastly, Constitutional Justice Enny Nurbaningsih observed the simple legal standing, which led to obscure argument of constitutional impairment, as no constitutional rights were said to have been violated by the norms.

Before adjourning the session, Justice Enny informed the Petitioners that they had 14 workdays to revise the petition and submit it by February 21 at 13:30 WIB to the Registrar’s Office. The schedule for the next hearing, she said, would be announced at a later date.

Writer        : Sri Pujianti
Editor        : Lulu Anjarsari P.
PR            : Andhini S.F.
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 2/10/2023 12:36 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, February 08, 2023 | 15:33 WIB 275