Secretary General of Indonesian Curators and Administrators Association Nien Rafles Siregar delivering her testimony as a related party at the judicial review hearing of Law Number 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligation, Monday (2/12), at the Courtroom. Photo by MKRI/Ifa.

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Jakarta (MKRI) – The Constitutional Court held another judicial review hearing of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations (Bankruptcy and PKPU Law) on Monday, December 2, 2024, at the Plenary Courtroom. The agenda of the hearing of Case No. 112/PUU-XXII/2024 was to hear testimony from the Indonesian Curators and Administrators Association (Asosiasi Kurator dan Pengurus Indonesia of AKPI), Indonesian Curators and Administrators Union (Himpunan Kurator dan Pengurus Indonesia or HKPI),  Indonesian Curators and Administrations Organization (Ikatan Kurator dan Pengurus Indonesia or IKPI), and the Supreme Court.

In the hearing, the Secretary General of AKPI Nien Rafles Siregar, as a related party, asserted that the Petitioner's constitutional rights were not violated by the provisions of Article 74 paragraph (1) and paragraph (3) juncto Article 185 paragraph (3) of the Bankruptcy Law. According to him, the articles align with the specific purposes of bankruptcy law and aim to protect the interests of creditors and debtors.

Nien highlighted that allegations of arbitrary actions and unprofessionalism by the curator, which are at the core of the lawsuit, have a resolution mechanism in bankruptcy law. The Petitioner may ask the supervisory judge to order the curator to act according to the rules, hold the curator in civil and criminal responsibility, or report the curator to the Honorary Council of his professional organization.

“The provisions in the Bankruptcy Law do not harm the petitioner’s constitutional rights. The issue being brought is more about the allegation of the unprofessionalism of the curator, whose resolution has been regulated under the bankruptcy law,” Nien emphasized.

Meanwhile, the Deputy Secretary General of HKPI, Agus Dwiwarsono, delivered his statement regarding time limitations in the bankruptcy settlement process. He explained that the bankruptcy process is implicitly regulated in Article 15 paragraph (3) of Bankruptcy and PKPU Law, which only allows a curator to manage three cases simultaneously.

“What Is argued by the Petitioners has its resolution. The losses they said were caused by a lack of understanding of the bankruptcy process,” Agus revealed.

Agus asserted that the bankruptcy and PKPU laws had given creditors the mechanism to defend their rights. Unfortunately, he said, the petitioners could not use the rights during the bankruptcy process.

He also added that the interpretation of the articles being reviewed did not only affect the petitioner’s case but also all bankruptcy cases in the future. According to Agus, this had the potential to complicate and prolong the process of bankruptcy settlement.

“The timeframe provisions as the petitioners’ request is unrealistic and may create legal uncertainty and vacuum,” he continued.

Challenges in the Bankruptcy Process

Agus explained that curators faced various challenges, including legal disputes between related parties. These challenges, according to him, were external factors outside the curators' control, although they had tried to mitigate them. He explained that several bankruptcy cases may take more than two years because of their complexities.

“The length of bankruptcy settlement is not only caused by the curator’s negligence but also because of various legal and factual issues which need time to fix,” he explained.

Agus asserted that the provision in Article 74 paragraph (1), Article 74 paragraph (3), and Article 185 paragraph (3) of the Bankruptcy and PKPU Law do not contradict Article 1 paragraph (3) and Article 28D paragraph (1) of the 1945 Constitution. He said that the regulation on the time limitation is an open legal policy under the authority of lawmakers.

Time Limitation

Secretary General of IKAPU R. Primaditya Wirasandi conveyed his view on the three-year limit on the process and settlement of bankruptcy assets. He considered that despite the principle of “the sooner, the better” becoming our shared hope, the time limitation may create a negative effect that cannot be measured.

“The hope to give protection and legal certainty will instead create new problems if the limitation is set without considering other supporting factors,” Primaditya said.

Primaditya explained that, in practice, the three-year limit is affected by various external factors, such as the involvement of other institutions, the complexity of legal issues, and the economic and market situation. This makes the implementation of time limitations difficult to measure uniformly.

He also highlighted that the norm on the consequences if the curators fail to settle the bankruptcy in three years is yet to be imagined. “In reality, this process is very dynamic and depends on many parties, so limiting time may be counterproductive,” he added.

Primaditya alerted that the three-year time limit may force curators to take shortcuts, potentially detrimental to all parties. “It does not mean that curators may act as they wish without limitation. The prolonged process is also harmful, but limiting time rigidly will create new issues,” he explained.

He also admitted that there were cases where curators were incompetent or deliberately prolonged the case. However, according to him, the best solution is not to limit the time strictly but to establish better supervision and create legal innovation that can encourage efficiency without sacrificing justice.

According to him, the prolonged time would disadvantage the curator and other parties. There may be curators who are incapable or unwilling to conform for many reasons and deliberately prolong the process. It will be our common concern so that we can be more innovative in formulating laws in the future. “However, in the meantime, there is not enough reason for us to set the limit with the reasons above. The harm must be bigger than the benefit,” he concluded.

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Several apartment buyers challenged Article 74 paragraph (1) and (3) juncto Article 185 paragraph (3) of Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations (Bankruptcy and PKPU Law). The petitioners of case no. 112/PUU-XXII/2024 are Aniek Trisolawati, Idha Achira Handajanti (housewives), and Indri Marini Akbar and Donny (private employees). Petitioners felt harmed due to the bankruptcy of PT Crown Porcelain and PT Cakrawala Bumi Sejahtera, as developers of Point 8 Apartment, located in Jalan Daan Mogot KM 14, Cengkareng, West Java. They asked that the bankruptcy process could be carried out faster and transparently.

At the preliminary hearing on Monday, September 2, legal counsel Heriyanto said the Petitioners hadn’t been made aware of the deadline set for the curator team of the bankrupt debtors of PT Crown Porcelain and PT Cakrawala Bumi Sejahtera to liquidate bankruptcy estate. They believe the certainty of the time frame in the liquidation of a bankrupt estate should start with a predetermined time limit for every stage of the bankruptcy process.

The firm deadline would circumvent ambiguous interpretations and provide clear guidance for all parties involved. The lack of such a time frame could lead to confusion, anxiety, and even prolong the financial stress that the debtor may face, especially if there is delay in the selling or division of assets.

In the revised petitums, the Petitioners request that the Court declare Article 74 paragraph (1) of the Bankruptcy and PKPU Law (“The Curator shall submit to the Supervisory Judge its report concerning the condition of bankruptcy estate and the performance of its duties once every 3 (three) months”) unconstitutional and not legally binding if not interpreted as “The Curator shall submit to the Supervisory Judge its report concerning the condition of bankruptcy estate and the performance of its duties once every 3 (three) months and shall complete the liquidation of bankruptcy estate and the performance of all of its duties at the latest within 3 (three) years since the bankruptcy decision is pronounced.”

They also ask the Court to declare Article 74 paragraph (3) of the Bankruptcy and PKPU Law (“The Supervisory Judge may extend the report period as referred to in paragraph (1)”) unconstitutional and not legally binding if not interpreted as “The Supervisory Judge may only extend the reporting period as referred to in paragraph (1) for a maximum of 1 (one) month.”

They also request that Article 185 paragraph (3) of the Bankruptcy and PKPU Law (“Concerning all goods that are not immediately or cannot be completely liquidated, the Curator shall take a decision in the manner which is approved by the Supervisory Judge”) be declared unconstitutional and not legally binding if not interpreted as “Concerning all goods that are not immediately or cannot be completely liquidated within a maximum of 2 (two) years, the Curator shall take a decision in the manner which is approved by the Supervisory Judge.”

Author: Utami Argawati
Editor: N. Rosi.
PR: Fauzan F.
Translators: Rizky Kurnia Chaesario/Yuniar Widiastuti

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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