Contracts not valid if it ain’t in Indonesian?


Whoa! This may have far reaching implications for foreign companies that have signed contacts with Indonesian companies — and result in lots of work for Indonesian lawyers and translators.

Another mess for the Jokowi government to try to sort out if they want to attract foreign investment.

INDONESIAN HIGH COURT AFFIRMS FIRST INSTANCE COURT DECISION THAT CONTRACTS WRITTEN IN ENGLISH LANGUAGE ARE VOID

There has been continuing uncertainty and concern about the Indonesian legislative requirement that the Indonesian language be used in contracts with Indonesian parties.

In the absence of anticipated implementing regulations, there are many unresolved questions about the meaning and applicability of the broadly expressed requirement.

In May 2014 the Jakarta High Court rejected an appeal against the 2013 ruling by the West Jakarta District Court which declared an Indonesian law governed loan agreement between an Indonesian borrower and a foreign lender to be void on the basis that the loan agreement was written in English in contravention of the requirements under Indonesia’s Law No. 24 of 2009 concerning Flag, Language and Symbol of State and National Anthem “Law 24/2009” – please click here for our previous e-bulletin on the impact and effect of the first instance decision.

There was no new legal reasoning provided by the Jakarta High Court as to why the first instance judgment should be upheld. The judgment simply stated that the appeal submitted by the foreign lender to overturn the first instance judgment was rejected on the following grounds:the Jakarta High Court was of the view that the first instance decision was decided correctly in compliance with prevailing laws; andthere were no new facts submitted by the appellant that would undermine the first instance decision.

via 2014/09/17 – Indonesia Update | Indonesian High Court affirms first instance court decision that contracts written in English language are void.

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