Regulations on Private International Law in the Indonesian Legal System as a Guideline for Engaging in Transnational Transaction

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Regulations on Private International Law in the Indonesian Legal System as a Guideline for Engaging in Transnational Transaction

Regulations-on-Private-International-Law-in-the-Indonesian-Legal-System-as-a-Guideline-for-Engaging-in-Transnational-Transaction

“Since 170 years ago until today, Indonesia have not owned Private International Law for itself”

Nowadays, many of the activities by Indonesian Citizens are intersecting with the Foreign Nationals, ranging from marriage affairs or divorce between the Indonesian Citizen with the Foreign Nationals within Indonesia territory or oversea, adoption of Indonesian children by Foreign Nationals, to business transaction between Indonesian Citizen with the Foreign Nationals within the Indonesia territory of oversea.

The private international law that is being used in Indonesia up until now are the provisions of Article 16, Article 17, and Article 18 of Algemeene Bepalingen van Wetgeving voor Nederlands Indie (AB) Staatsblad 1847 No 23 of 1847. This regulation is a legacy of the Dutch colonials and it is not applicable to today’s condition.    

If we see the development of the private international law in other countries, Japan has already regulated its private international law since 1898, China since 1918, and Thailand since 1939. Even the Dutch as the makers of Algemeene Bepalingen van Wetgeving voor Nederlands Indie (AB) Staatsblad 1847 No 23 of 1847 already have an updated regulation since 19th of May 2011.

For your knowledge, we cite Article 16, Article 17, and Article 18 of Algemeene Bepalingen van Wetgeving voor Nederlands Indie (AB) Staatsblad 1847 No 23 of 1847 as follow:

  1. Article 16 AB stated that for the citizen of Dutch East Indies, the regulations concerning the status and legal authorization of a person shall apply to them if they are at overseas. This article regulates on the Personal Status & Authorization, comprising of 1. Regulation on the personal law (personenrecht) including family law; 2. Regulations on the non-fixed objects (moveable objects).
  2. Article 17 AB stated that against the moveable objects and immovable objects shall apply the regulations of the country or where such objects are located in. Thus, concerning movable objects and immovable objects must be assessed first according to the law of the country or where such objects are located in (lex rei sitae) whoever the owner is.
  3. Article 18 AB stated that any form of legal action be assessed in accordance with the regulations of the country and the location of where such legal action has been taken (locus regit actum).  In applying this article and the previous articles, we must always observe the difference which by law is being provided between the Europeans and indigenous Indonesian.

Furthermore, affairs that are intersecting with private international law, other than referring to the Article 16, Article 17, and Article 18 of Algemeene Bepalingen van Wetgeving voor Nederlands Indie (AB) Staatsblad 1847 No 23 of 1847, are matters regulated by international instruments such as:

  1. International Chamber of Commerce (ICC) Incoterms, 2000;
  2. United Nations Convention on International Sales of Goods, 1981; and
  3. Rules of Arbitration of International Chamber of Commerce, 1998.

Including national instrument:

  1. Indonesian Civil Code;
  2. Indonesian Commercial Code;
  3. Reglement op de Burgerlijke Rechtvordeting (RV);
  4. Law Number 1 of 2009 concerning Aviation;
  5. Law Number 30 of 1999 concerning Arbitration and Alternative Dispute Resolutions;
  6. Law Number 21 of 1992 concerning Shipping;
  7. Law Number 1 of 1974 concerning Marriage;
  8. Law Number 25 of 2007 concerning Capital Investment;
  9. Law Number 5 of 1968 concerning Ratification on the Convention on the Settlement of Investment Dispute Between States and Nationals of Other States;
  10. Presidential Decree Number 34 of 1981 concerning Ratification on the Convention on the Recognition and Enforcement of Foreign Arbitral Award; and
  11. Supreme Court of the Republic of Indonesia Regulations Number 1 of 1990 concerning Procedures on Enforcement of Foreign Arbitral Awards.

However, our main concern is that the abovementioned sources of law are currently unable to provide legal certainty. We observe in the practices of contract drafting in the mining sector, where the majority of mining contract and oil & gas contract between the Indonesian party and the foreign party is still using foreign law as their choice of law.  This is due to the current private international law is unable to provide trust on Indonesian law.

Currently, there is a Draft on the Regulations concerning Private International Law made by the Government, however, such draft has not yet included in the National Legislation Programme year 2015-2019 in the House of Representatives. This is an issue to be solved by the Government and House of Representatives immediately, due to the urgent need of the new Regulations concerning Private International Law in corresponding with high interaction level between the Indonesian Citizens and the Foreign Nationals.  

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