bankruptcy law and suspension of payment

SSEK Unofficial Translation December 2005

LAW NUMBER 37 OF 2004 REGARDING

BANKRUPTCY AND SUSPENSION OF DEBT REPAYMENTS (October 18, 2004)

WITH THE BLESSING OF THE GOD ALMIGHTY

Considering : a. whereas the national law development in the framework of creating fair and prosperous society based on Pancasila and the 1945 Constitution of the Republic of Indonesia must be able to support and assure the certainty, order, enforcement and protection of law based on justice and truth;

b. whereas with the fast growing of economy and trade, there shall be many issues

arises with regard to debts occurred in the public; c. whereas economic crisis occurred in Indonesia has resulted in an impact which

suffered national economic therefore caused enormous difficulties to the business community in settling their debt in order to continue their activities;

d. whereas as one of the law facility for debt settlement, a large part of the material

of the Law on the Bankruptcy (Faillissements-verordening, Staatsblad 1905:217 juncto Staatsblad 1906:348) are no longer suitable to the development and the society need of law and therefore has been amended by Government Regulation in Lieu of Law Number 1 of 1998 regarding the Amendment to the Bankruptcy Law, which are then stipulated into Law based on Law Number 4 of 1998, however such amendment was not sufficient for the development and the society need of law;

e. whereas based on consideration as set forth in point a, point b, point c and point

d, it is required to form a new Law on Bankruptcy and the Suspension of Debt Payment.

In View of : 1. Article 1 paragraph (3), Article 5 paragraph (1), Article 20, Article 24, and Article

33 paragraph (4) of the 1945 Constitution of the Republic of Indonesia; 2. The Revised and Updated Reglemen Indonesia (Het Herziene Indonesisch

Reglement, Staatsblad 1926:559 juncto Staatsblad 1941:44); 3. The Reglemen Procedural Law for Region Outside Java and Madura

(Rechtsreglement Buitengewesten, Staatsblad 1927:227); 4. Law Number 14 of 1985 regarding the Supreme Court (State Gazette of

Republic of Indonesia Year 1985 Number 73, Supplement to the State Gazette of the Republic of Indonesia Number 3316), as amended by Law Number 5 of 2004 regarding Amendment to Law Number 14 of 1985 regarding the Supreme Court (State Gazette of the Republic of Indonesia Year 2004 Number 34, Supplement to the State Gazette of the Republic of Indonesia Number 4359);

5. Law Number 2 of 1986 regarding Public Judicature (State Gazette of the

Republic of Indonesia Year 1986 Number 20, Supplement to the State Gazette

Office.06.Law 37-2004 Bankruptcy [final] 1

of the Republic of Indonesia Number 3327), as amended by Law Number 8 of 2004regarding Amendment to Law Number 2 of 1986 regarding Public Judicature (State Gazette of the Republic of Indonesia Year 2004 Number 34; Supplement to the State Gazette of the Republic of Indonesia Number 4379);

6. Law Number 4 of 2004 regarding Judiciary Power (State Gazette of the Republic

of Indonesia Year 2004 Number 8; Supplement to the State Gazette of the Republic of Indonesia Number 4358);

Elucidation: I. GENERAL The national law development in the framework of creating fair and prosperous society based on

Pancasila and the 1945 Constitution of the Republic of Indonesia is directed to the realization of national law system which is conducted by formation of new law, especially law product required to support the national economic development.

The national law product that guarantees certainty, orderly, security, and the protection of law based

on justice and truth is hoped tp be capable to support the growing and development of national economic, and to secure and support the result of national economic.

One of the law facilities required in supporting the economic national development is the Law on

bankruptcy including the regulations on the suspension of debt payment which initially regulated in Law on Bankruptcy (Faillissements-verordening Staatsblad 1905:217 juncto Staatsblad 1906:348).

The development of economic and trade and also the influence of globalization in the business

community currently, and bearing in mind that most of the capital owned by the entrepreneurs in general, is a loan originated from various sources, whether from bank, capital investment, bond issuance and other ways allowed, has incurred many issues on the debt settlement in the community.

Economic crisis that occurred in Asian countries, including Indonesia, since the mid 1997 has

incurred major difficulties towards the national economic and trade. The ability of the business community to improve their business was disturbed, even to maintain the continuity of business was also not easy, such matters extremely influence the ability to fulfill the obligation to pay their debts. Such conditions causes matters to be in sequence; which if not being settled immediately will have major cause, among others the lost of employment and other social issues.

For the interest of business community in settling debts issues fairly, fastly, openly, and effectively, a

supporting law device is required. On April 22, 1998, based on Article 22 paragraph (1) of the 1945 Constitution of the Republic of Indonesia, a Government Regulation in Lieu of Law Number 1 of 1998 regarding the Amendment to Law on Bankruptcy, which is then stipulated into Law as Law Number 4 of 1998 was issued. The amendment is implemented because the Law on Bankruptcy (Faillisement-verordening, Staatsblad 1905:217 juncto Staatsblad 1906:348) which is a laws and regulations inherited from the Dutch government, is no longer in accordance with the needs and law development of the community for debt settlement.

The amendment to the Law on Bankruptcy as mentioned above was made only by revising, adding,

and deleting provisions which are believed to be no longer in accordance with the needs and law development in the public, if it is considered from material point of view, it still have several deficiency and weakness.


The decision on bankruptcy declaration changes the status of an individual to become incompetent to perform a legal act, to own, and settle his asset after the bankruptcy declaration is pronounce.

The major requirement to able to be declared bankrupt is that a Debtor has to have at least 2 (two)

or more Creditors and has failed to pay at least 1 (one) debt which is due and payable. In this debt payment arrangement, it concerns to both the interest of the Debtors itself, and the interest of the Creditors. By the decision of bankruptcy declaration, it is hoped that the bankrupt asset of the Debtor is used to repay all of the Debtors debts in fair and square and also equal.

The bankruptcy declaration may be submittedby one or moreCreditor, Debtor, or district attorney for

public interest. Bankruptcy does not free a person from his obligations to pay his debts. There areseveral factors as to why the regulation concerning bankruptcy and suspension debt

payment is required: First, to prevent disputes in obtaining the bankruptcy asset if at the same time, there are a several

Creditors who collected their receivables from the Debtor. Second, to prevent any Creditor as the holder of security right of properties which claim their rights

by selling the goods owned by the Debtor without any observance of the Debtor’s interest or other Creditors.

Third, to prevent any breach conducted by any of the Creditors or Debtor itself. Such as, Debtor

endeavor to give profit to an individual or several certain Creditor that caused losses to other Creditor, or an unfair act from the Debtor to steal all of its asset in order to release his obligations towards the Creditors.

Based on the legal principle as mentioned above, it is require to form a new Law regarding

Bankruptcy and the Suspension of Debt Payment, which is a product of national law, in accordance with the needs and the law development of the public.

Law on Bankruptcy and Suspension of Debt Payment is based on several principles, among others: 1. Principle of Equilibrium This Law regulates several provisions as a realization of the principle of equilibrium, which is

on the one side, there is a provision that can prevent the misuse of institution and bankruptcy institution by dishonest Debtor, while on the other hand there is a provision that can prevent the misuse of institution and bankruptcy institution by the Creditor which has no good faith.

2. Principle of Business Continuity In this Law, there is a provision that allows the prospective Debtor’s company to keep

running its business. 3. Principle of Justice In the bankruptcy the principle of justice has a definition, that the provisions concerning

bankruptcy should have fulfill the justice for the parties concerned. This principle of justice is to prevent the misuse of authorities of the collectors in ensuring the payments on each of the claim towards the Debtor, without any concerns to other Creditor.

4. Principle of Integration Principle of Integration in this Law has the definition that the formal law system and material

lawsystem is one wholly unity of the civil law system and national civil procedural law. The new law on Bankruptcy and Suspension of Debt Payment has a wider scope in norm, material

scope, and the process of debts settlement.


Such wider scope is required because of the development and the need of law in the public, while

the current prevailing provisions are not sufficient to become the law facility to settle debt issues fairly, fasty, openly, and effectively.

Several principles of the new material in this Law on Bankruptcy and Suspension of Debt Payment ,

among others: First, in order not to cause various interpretations in this Law, the definition of debt is expressly

constraint. The definition of expiration is also constraint. Second, the requirements and procedures of the petition for bankruptcy declaration and petition for

suspension of debt payment shall include the granting of definite time reference for resolving a decision of bankrupt declaration and/or suspension of debt payment .

With the Joint Approval of

THE HOUSE OF REPRESENTATIVE OF THE REPUBLIC OF INDONESIA and

THE PRESIDENT OF THE REPUBLIC OF INDONESIA has decided: LAW REGARDING BANKRUPTCY AND THE SUSPENSIONOF DEBT PAYMENT OBLIGATION.

CHAPTER I

GENERAL PROVISION

Article 1 In this Law what Is meant by: 1. Bankruptcy is a seizure on all of assets of Bankrupt Debtor, the administration and settlement of

which is done by a Receiver under the supervision of the Supervisory Judge as regulated in this Law.

2. Creditor is a person who has receivables based on contract or by Law, which can be collected before

the court. 3. Debtor is a person who has debts based on an agreement or law which payments can be requested

before the court. 4. Bankrupt Debtor is a debtor who has been declared bankrupt by Court decision. 5. Receiver is a Chancery Court or individual who are appointed by the Court to manage and settle the

asset of the Bankrupt Debtor under the supervision of the Supervisory Judge in accordance with this Law.

6. Debt is an obligation stated or can be stated in the a cash form Rupiah or foreign currency, directly,

will occur in the near future or contingency, which occur based on an agreement or law, andshall be fulfilled by the debtor, and if it is not fulfilled will grant rights to the Receiver to acquire the fulfillment from the debtor asset.

7. Court is a Commercial Court in the public judicature. 8. Supervisory Judge is a judge appointed by the Court in a bankruptcy decision or in a suspension of

debt payment decision. 9. Day is calendar day and if the last day from a period becomes due on Sunday or holidays, shall be

effective on the next day.


10. Due Date is a period calculated, not included the effective day of such period. 11. Everyone is an individual or an entity including legal entity or non-legal entity in the liquidation. Elucidation of Article 1 Sufficiently clear

CHAPTER II BANKRUPTCY First Paragraph

Conditions and Bankruptcy Decision Article 2

(1) A debtor who has 2 (two) or more Creditors and has failed to pay at least 1 (one) debt which is due

and payable, shall be declared bankrupt by a Court decision, either upon his own petition, or upon a petition of 1 (one) or more of his creditors.

(2) Petition as set forth in paragraph (1) may also be submitted by the district attorney in the public interest.

(3) In the event that the Debtor is a bank, a bankruptcy petition may only be submitted by Bank Indonesia.

(4) In the event that the Debtor is a Securities Company, Stock Exchange, Clearing and Guarantee Institutions, Depository and Settlement Institution, a bankruptcy petition may only be submitted by the Capital Market Supervisory Board.

(5) In the event that the debtor is an Insurance Company, Reinsurance Company, Pension Fund, or Sate-Owned Enterprise operating in the public interest, the bankruptcy petition may only be submitted by the Minister of Finance.

Elucidation Article 2 Paragraph (1) “Creditor” in this paragraph means the unsecured creditor, secured creditor and preferred

creditor. The secured and preferred creditors may file a bankruptcy petition without loosing the security right that they hold over the Debtor’s asset and loosing their preference right.

If there are a syndicate creditors, then each of Creditor is as set forth in Article 1 point 2. “Debt that has become due and payable” means an obligation to pay debts that has become

due, either because of an agreement, an acceleration of time collection as agreed, sanction imposition, fine imposed by the competent institution, or court decision, arbitrator, or penal of arbitrators.

Paragraph (2) The district attorney may file a bankruptcy petition based on the reasons for public interest, if

the requirements as set forth in Article 2 paragraph (1) has been met and there are no parties filing a bankruptcy petition.

“Public interest” means the state and national interest and/or public interest, such as: a. The Debtor fled; b. The Debtor embezzled part of the bankruptcy asset; c. Debtor has debts to the State-Owned Enterprise or other business entity who

collects funds from the public; d. Debtors has debts from the public fund collector; e. Debtor has no good faith or is not cooperative in settling its debt which has become

due; or f. In other matters according to the district attorney it represents a public interest.


The terms to file a bankruptcy petition is similar to the bankruptcy petition filed by the Debtors or Creditors, provided that the bankruptcy petition may be filed by the district attorney without employing advocate service.

Paragraph (3) “Bank” means bank as regulated in the laws and regulations. The submission of bankruptcy

petition for banks is entirely the authority of Bank Indonesia and merely based on the entire assessment of financial condition and banking condition, therefore it is not require to be accounted for. The authority of Bank Indonesia to file a bankruptcy petition does not nullify the authority of Bank Indonesia related to the revocation of bank permit, dissolution of legal entities, and bank liquidation in accordance with the prevailing laws and regulations.

Paragraph (4) Bankruptcy petition as set forth in this paragraph may only be filed by the Capital Market

Supervisory Board, since that such institution conducted activities connected to the public fund, which are invested in the securities under the supervision of the Capital Market Supervisory Board.

The Capital Market Supervisory Board also has full authority in filing bankruptcy petition to

institutions under the its supervision, such as the authority of Bank Indonesia towards bank. Paragraph (5) “Insurance Company” means Life Insurance Company and Loss Insurance Company. Insurance Company and Reinsurance Company is Insurance Company and Reinsurance

Company as set forth in the Laws regulating Insurance Business. The authority to file a bankruptcy petition for Insurance Company and Reinsurance

Company entirely stands at the Minister of Finance. This provision is required to built public level of trust towards Insurance Company and Reinsurance Company as an institution that manages risk as well as manages public fund having strategic position in the development and economic system.

“Pension Fund” means Pension Fund as set forth in Law regulating the Pension Fund. The authority to file bankruptcy for Pension Fund entirely stands at the Minister of Finance.

This provisions is required to built public level of trust towards Pension Fund, considering that Pension Fund manages public fund in large amount and such fund represents the rights of the numerous members.

“State-Owned Enterprise operating in the public interest” means a state-owned enterprise,

the entire capital of which is owned by the state and are not divided into shares. The authority of the Minister of Finance in filing bankruptcy petition for institutions under his

supervision is the same as the authority of Bank Indonesia as set forth in paragraph (3) and the Capital Market Supervisory Board as set forth in paragraph (4).

Article 3

(1) Decision of the bankruptcy petition and other related matters in connection therewith and/or

regulated under this Law shall be decided by a Court having jurisdiction over the region in which the domicile of the Debtor is located.

(2) In the event that the Debtor has left the territory of the Republic of Indonesia, the Court competent in

rendering a decision on the bankruptcy petition is the Court having jurisdiction over the region where the lastest domicile of the debtor was located.


(3) In the event that the Debtor is a partner of a firm, the Court having jurisdiction over the region where

the domicile of the firm is located shall also be competent to rule. (4) In the event that the debtor does not have a domicile within the territory of the Republic of Indonesia,

but having his profession or business in the territory of the Republic of Indonesia, the Court competent in rendering decision is the Court having jurisdiction over the region where the domicile or the head office from which the debtor conducts his profession or business is located.

(5) In the event that the debtor is a legal entity, then its domicile shall be as set forth in its articles of

association. Article 3 Paragraph (1) “Other matters” means among others, actio pauliana, a third party defense towards seizure,

or a case in which the Debtor, Creditor, Receiver, or administrator become one of the party in the case related to the bankruptcy asset including claim of the Receiver towards the Board of Directors causing the company to be declared bankrupt because of default or errors.

Procedural Law applicable in ruling the case that includes “other matters” is the same as the

Civil Procedural Law (KUHAP) applicable for cases in the petition for bankruptcy declaration, including the time limit provisions.

Paragraph (2) Sufficiently clear Paragraph (3) In the event that the concerns decision on bankruptcy petition is declared by more than one

courts authorized in ruling the same Debtors, at different date, then the decision pronounced at the earliest date shall be applicable.

In the event that the decision of bankruptcy petition is declared by different courts at the

same date, on the same Debtor, then the Court decision having the jurisdiction that covers the legal domicile of the Debtor shall be applicable.

Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear.

Article 4

(1) In the event that the bankruptcy petition is filed by an individual debtor who is still bound by legal marriage, the petition may only be submitted with the consentof the spouse.

(2) Terms as set forth in paragraph (1) shall not be applicable if there is no common property. Elucidation of Article 4 Paragraph (1) This provision is only applicable if the bankruptcy petition is filed by the Debtor. Spousal

consent is required, because it concerns common asset.

Valid legal marriage must be proven with marital deed issued by the competent authorities. Paragraph (2) Sufficiently clear.


Article 5

A bankruptcy petition toward a firm must contain name and domicile of the respective partner who is jointly liable to all of the firm’s debt. Elucidation of Article 5 “Domicile” means the registered domicile of the partner as resident. In the event that the partner’s

domicile is not known, then his residence shall be mentioned. “Name and domicile” in this provisions is in accordance with the contents stated in the Identity Card

(KTP).

Article 6

(1) The bankruptcy petition shall be submitted to the Chairman of the Court. (2) The Clerk shall register the bankruptcy petition on the date the petition concerned is submitted, and

a written receipt signed by the authorized official shall be given to the petitioner on the same day as the date of registration.

(3) The Clerk must reject the registration of a bankruptcy petition for institutions as set forth in Article 2

paragraph (3), paragraph (4) and paragraph (5) if it is conducted in contrary to the provisions of such paragraphs.

(4) The Clerk shall submit the bankruptcy petition to the Chairman of the Court within 2 (two) days after

the date of the petition registration. (5) In a period of no later than 3 (three) days after the date of the bankruptcy petition is registered, the

Court shall study the application and set a date for a hearing. (6) The hearing of the bankruptcy petition shall be held at the latest 20 days after the date of the petition

is registered. (7) Upon the request of the Debtor and subject to sufficient reasons, the Court may postpone the

hearing as set forth in paragraph (5) for no more than 25 days after the date of the petition is registered.

Elucidation of Article 6 Paragraph (1) Sufficiently clear. Paragraph (2) Sufficiently clear. Paragraph (3) Any Clerk who violates this provision shall be imposed with sanctions in accordance with the

laws and regulations. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear.


Paragraph (7) “Sufficient reasons” means, among others, the existence of statement letter from a doctor.

Article 7

(1) The petition as set forth in Article 6, Article 10, Article 11, Article 12, Article 43, Article 56, Article 57, Article 58, Article 68, Article 161, Article 171, Article 207 and Article 212 must be submitted by an advocate.

(2) Terms as set forth in paragraph (1) shall not be applicable in the event that the petition is submitted by the district attorney, Bank Indonesia, Capital Market Supervisory Board, and Minister of Finance.

Elucidation of Article 7 Sufficiently clear.

Article 8 (1) Court: a. shall be obliged to summon the Debtor, in the event that the bankruptcy petition is submitted

by the Creditor, district attorney, Bank Indonesia, Capital Market Supervisory Board, or Minister of Finance;

b. may summon the Debtor in the event that the bankruptcy petition is submitted by the Debtor and there is doubt as to whether the condition to declare bankrupt as set forth in Article 2 paragraph (1) has been met.

(2) Summon as set forth in paragraph (1) shall be sent by the bailiff by the express mail at the latest

within 7 (seven) days before the first hearing is held. (3) Summon is valid and deemed to be accepted by the Debtor, if it is made by the bailiff in accordance

with the terms as set forth in paragraph (2). (4) The bankruptcy petition shall be granted if there are facts and circumstances which can be simply

proven that the conditions for a declaration of bankruptcy as set forth in Article 2 paragraph (1) has been met.

(5) The Court Decision on the bankruptcy petition shall be pronounced by no later than 60 (sixty) days

after the date of the bankruptcy petition is register. (6) The Court Decision as set forth in paragraph (5) shall also contain: a. certain article from the related laws and regulations and/or unwritten source of law which

become a base to rule; and b. legal consideration and dissenting opinion from the members of the judge or the chairman of the

penal of judges. (7) The decision on the bankruptcy petition as set forth in paragraph (6) which completely contained

legal consideration as the basis for such decision must be pronounced in a public court and can be initially performed, regardless of such decision is filed with remedy.

Elucidation of Article 8 Paragraph (1) Sufficiently clear. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear.


Paragraph (4) “Facts or situation which can be simply proven” means the presence of the fact that there

are two or more Creditors and the fact that the debthas become due and payable. While, the difference in amount of debt claimed by the bankrupt petitioner and bankrupt respondent will not interfere the decision of bankruptcy declaration.

Paragraph (5) Sufficiently clear. Paragraph (6) Point a Sufficiently clear. Point b Legal consideration or different opinion from the judge members or the chairman of the

panel of judges shall be included as attachment of such court decision. Paragraph (7) Sufficiently clear.

Article 9

Copies of the Court decision as set forth in Article 8 paragraph (6) shall be submitted by the bailiff with registered express mail to the Debtor, the party filing the bankruptcy petition, Receiver, and Supervisory Judge by no later than 3 (three) days after the date of the decision on the bankruptcy petition is pronounced. Elucidation of Article 9 “The party filing bankruptcy petition” is Creditors, district attorney, Bank Indonesia, Capital Market

Supervisory Board, or the Minister of Finance.

Article 10

(1) So long as the decision on the bankruptcy petition has not been pronounced, each of the Creditor, district attorney, Bank Indonesia, Capital Market Supervisory Board, or the Minister of Finance may submit a petition to the Court to:

a. place the security seizure against part or all of the Debtor’s asset; or b. appoint a temporary Receiver to monitor: 1) Debtor business management; and 2) payment made to the Creditor, assignment, or encumbrance of any asset of the Debtor,

which in the framework of bankruptcy is the Receiver authority. (2) The petition as set forth in paragraph (1) may only be granted if such actions are necessary to

protect the interest of Creditors. (3) In the event that the petition as set forth in paragraph (1) point a is granted, the Court may stipulated

conditions that the Petitioner Creditor shall provide security in an amount deemed reasonable by the Court.

Elucidation of Article 10 Paragraph (1) Sufficiently clear. Paragraph (2) Sufficiently clear.


Paragraph (3) The security effort as set forth in this provisions has a preventive and temporary nature, and

it is intended to prevent any possibilities for Debtors to make any actions towards his asset resulting losses to the Creditor’s interest in paying his debts.

Nevertheless, to maintain stability of the Debtors and Creditors’ interest, the Court may

require Creditors to provide a deposit in reasonable amount, if such security effort is granted. In stipulating deposit requirements over the entire Debtor asset, the types of Debtors asset and the amount of deposit that must be given should be equal to the possibility of losses suffered by the Debtor if the bankruptcy petition is rejected by the Court.

Article 11

(1) Legal remedy against a decision on a bankruptcy petition is cassation to the Supreme Court. (2) The petition for cassation as set forth in paragraph (1) shall be submitted by no later than 8 (eight)

days after the date of the decision on the cassation petition is pronounced, by registering to the Court Clerk which has rendered the bankruptcy petition.

(3) The petition for cassation as set forth in paragraph (2), other than could be submitted by the Debtor

and Creditor, it could also be submitted by other Creditor which is not part of the party of the first level hearing that are not satisfied to the decision on the Bankruptcy petition.

(4) Clerk shall register the cassation petition on the date of the petition concerned is submitted and a

written receipt signed by the clerk should be submitted to the petitioner on the same date to that of the registration acceptance date.


Article 12

(1) The cassation petitioner shall submit the memorandum of cassation to the Court Clerk on the date the cassation petition is registered.

(2) Clerk shall deliver the cassation petition and memorandum of cassation as set forth in paragraph (1)

to the cassation respondent by no later than 2 (two) days after the cassation petition is registered. (3) The cassation respondent may submit a counter-memorandum of cassation to the Court Clerk by no

later than 7 (seven) days after the date the cassation respondent accepted the memorandum of cassation as set forth in paragraph (2), and the Court Clerk shall submit the counter-memorandum of cassation to the cassation petitioner by no later than 2 (two) days after the counter-memorandum of cassation is accepted.

(4) Clerk shall submit the cassation petition, memorandum of cassation, and counter-memorandum of

cassation, along with the brief concerned, to the Supreme Court by no later than 14 (fourteen) days after the date the cassation petition is registered.

Elucidation of Article 12 Paragraph (1) Sufficiently clear. Paragraph (2) See elucidation of Article 6 paragraph (3).


Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear.

Article 13

(1) The Supreme Court should study the cassation petition and stipulate the date for a hearing by no later than 2 (two) days after the date of the cassation petition is accepted by the Supreme Court.

(2) Examination hearing on the cassation petition shall be performed by no later than 20 (twenty) days after the date of cassation petition is accepted by the Supreme Court.

(3) Decision on the cassation petition must be pronounced by no later than 60 (sixty) days after the date of cassation petition is accepted by the Supreme Court.

(4) Decision on the cassation petition as set forth in paragraph (3) which completely contain legal consideration which become the basis of such decision must be pronounced in a public court.

(5) In the event that difference of opinion occurred between the members of and the chairman of the panel of judges, then the dissenting opinion must be stated in the cassation decision.

(6) Clerk on the Supreme Court shall be obliged to submit copies of the cassation decision to the Clerk at the Commercial Court by no later than 3 (three) days after the date of the cassation petition is pronounced.

(7) The Court bailiff shall be obliged to submit the copies of cassation decision as set forth in paragraph (5) to the cassation petitioner, the cassation respondent, Receiver, and Supervisory Judge by no later than 2 days after the cassation decision is accepted.


Article 14

(1) Reconsideration can be filed toward the decision on the bankruptcy petition having binding legal force.

(2) Terms as set forth in Article 12 and Article13 shall be valid mutadis mutandis for reconsideration. Elucidation of Article 14 Sufficiently clear.

Article 15

(1) In the decision of bankruptcy declaration, a Receiver and a Supervisory Judge shall be appointed by the Court judge.

(2) In the event that the Debtor, Creditor, or the relevant authority filing a bankruptcy petition as set forth

in Article 2 paragraph (2), paragraph (3), paragraph (4), or paragraph (5) does not submitted a proposal for the appointment of a Receiver to the Court, then the Chancery Court shall be appointed as a Receiver.

(3) Receiver appointed as set forth in paragraph (1) must be independent, does not have a conflict of

interest with the Debtor or Creditor, and is not currently handling bankruptcy cases and suspension of debt payment for more than 3 (three) cases.

(4) Within a period of 5 (five) days after the date of bankruptcy declaration is accepted by the Receiver

and Supervisory Judge, the Receiver shall announce in the State Gazette and in at least 2 daily newspapers stipulated by the Supervisory Judge, on the decision of bankruptcy declaration containing the following matters:

a. name, address, and work of the debtor;


b. name of the Supervisory Judge; c. name, address and the work of the Receiver; d. name, address and the work of the member of temporary Creditor committee, if it has been

appointed; and e. domicile and time of the first Creditor meeting. Elucidation of Article 15 Paragraph (1) Sufficiently clear. Paragraph (2) Sufficiently clear. Paragraph (3) “Independent and has no conflict of interest” means that the continuity presence of the

Receiver does not depend on Creditor or Debtor, and the Receiver does not have similar economic interest with the Debtor or Creditor.

Paragraph (4) “At least 2 (two) daily newspaper” means: 1. Daily newspaper nationally circulated; and 2. Local daily newspaper circulated in the Debtor’s domicile.

Article 16

(1) The Receiver has the authority to perform management and/or settlement of bankruptcy asset

as of the date of bankruptcy decision is pronounced, even though a cassation or reconsideration is filed upon such decision.

(2) In the event that the decision on the bankruptcy petition of declaration is cancelled based on cassation or reconsideration, all actions performed by the Receiver before or up to the date the Receiver accepted the notice on the cancellation decision as set forth in Article 17 are still valid and bind the Debtor.

Elucidation of Article 16 Paragraph (1) “Settlement” in this provisions means asset cashing to pay or settle its debts. Paragraph (2) “All actions performed by the Receiver” covers any action taken for the management and

settlement of the bankruptcy asset. “Still valid and bind the Debtor”, means that any action of Receiver cannot be claimed in any

court.

Article 17

(1) The Receiver shall announce the cassation or reconsideration decision canceling the bankruptcy decision in the State Gazette and in at least in 2 daily newspapers as set forth in Article 15 paragraph (4).

(2) The Penal of Judges cancelling the bankruptcy decision shall stipulate the bankruptcy expenses and

the Receiver’s commission fee. (3) Expenses as set forth in paragraph (2) shall be charge to the petitioner of the bankruptcy declaration

or to the petitioner and debtor in a proportion stipulated by the penal of judges.


(4) For the payment for bankruptcy expenses and Receiver commission fee as set forth in paragraph

(2), the Chairman of the Court shall issue an execution stipulation upon Receiverrequest. (5) In the event that the decision of bankruptcy declaration is cancelled, amicable settlement that may

occur shall become void by law. Elucidation of Article 17 Paragraph (1) Sufficiently clear. Paragraph (2) Stipulation on bankruptcy expenses is conducted by the Panel of Judges of the Court which

deciding the bankruptcy case based on details submitted by the Receiver after hearing consideration from the Supervisory Judge.

Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear.

Article 18

(1) In the event that the bankruptcy asset is not sufficient to pay the bankruptcy expenses, then the Court upon Penal of Judges motion and after hearing from the temporary creditor committee if there is any, also after legally summoned or heard the Debtor, may rendered the revocation of the decision for bankruptcy declaration.

(2) Decision as set forth in paragraph (1) shall be announced in a public hearing. (3) The Penal of Judges that ordered the revocation of decision of bankruptcy declaration shall stipulate

the amount of bankruptcy expenses and the Receiver commission fee. (4) The amount of bankruptcy expenses and Receiver commission fee as set forth in paragraph (3) shall

be charged to the Debtor. (5) Expenses and commission fee as set forth in paragraph (3) must be initially performed on all debts

which are not secured with collateral. (6) The stipulation of the penal of judges concerning bankruptcy expenses and Receiver commission fee

as set forth in paragraph (3) cannot be filed with a remedy. (7) For the payment of the bankruptcy expenses and Receiver commission fee as set forth in paragraph

(3), the Chairman shall issue execution stipulation upon the Receiver request, acknowledged by the Supervisory Judge.

Elucidation of Article 18 Paragraph (1) “Temporary creditor committee”, means a creditor committee formed before the verification

meeting. While, the creditor committee formed after the verification meeting is a permanent creditor committee.


Paragraph (2) Sufficiently clear. Paragraph (3) See elucidation of Article 17 paragraph (2). Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear. Paragraph (7) Sufficiently clear.

Article 19

(1) The decision ordering the revocation of bankruptcy declaration shall be announced by the Court Clerk in the State Gazette of the Republic of Indonesia and in at least in 2 (two) daily newspapers as set forth in Article 15 paragraph (4).

(2) The decision on the revocation of bankruptcy declaration as set forth in paragraph (1) may be filed

with cassation and/or reconsideration. (3) In the event after the decision of the revocation of bankruptcy declaration is pronounced, a new

bankruptcy petition is filled, the Debtor or the petitioner should prove that there is sufficient amount of asset to pay for the bankruptcy expenses.


Article 20

(1) The Court Clerk shall compose a public registry to record each bankruptcy cases separately. (2) The public registry as set forth in paragraph (1) must contain the following orders: a. summary of bankruptcy decision or revocation decision of bankruptcy declaration; b. brief contents of amicable settlement and legalization of the decision; c. revocation of amicable settlement; d. sharing amount in the settlement; e. bankruptcy revocation as set forth in Article 18; and f. rehabilitation; by stating their respective date. (3) Further provision concerning the form and content of public registry as set forth in paragraph (1) shall

be stipulated by the Decision of the Head of the Supreme Court. (4) Public registry as set forth in paragraph (1) shall be open for public and can be seen by every people

without payment. Elucidation of Article 20 Paragraph (1)


See elucidation Article 6 paragraph (3). Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4)

Sufficiently clear.

Second Section Consequences of Bankruptcy

Article 21

The bankruptcy shall include the total asset of the Debtor at the time the bankruptcy declaration is pronounced along with all of which that he obtained during the bankruptcy. Elucidation of Article 21 Sufficiently clear.

Article 22

Terms as intended by Article 21 shall not be applicable to: a. material, including animals that are truly required by the Debtor in connection with his work, equipment,

medical tools used for health, sleeping bed and its tool used by the Debtor and his family, and food for 30 (thirty) days for Debtor and his family located in such place;

b. all things that the Debtor acquired from his own work as salary from a position or service, as fee, pension, benefits, insofar determined by the Supervisory Judge; or

c. Cash given to the Debtor to fulfill an obligation to feed in accordance to the law. Elucidation of Article 22 Sufficiently clear.

Article 23

Bankrupt Debtor as intended by Article 21 and 22 cover wife or husband from the Bankrupt Debtor who are married with joint marital assets. Elucidation of Article 23 Sufficiently clear.

Article 24

(1) By law, Debtor shall loss his rights to take charge and manage his asset which are included in the

bankruptcy assets, as from the date of the decision of bankruptcy declaration is pronounced. (2) Date of the decision as intended by paragraph (1) shall be calculated as from 00.00 hour of local

time. (3) In the event that before the decision of bankruptcy declaration is pronounced, transfer of fund has

been made through Bank or institution other than bank on the stipulation date as intended by article (1), such transfer shall obliged to be continued.

(4) In the event that before the decision of bankruptcy declaration is pronounced securities transaction

has been made in the Stock exchange, therefore such transaction shall be obliged to be finished.


Elucidation of Article 24 Paragraph (1) In the event that the Debtor is a Limited Liability Company, such organ of limited liability

company is still function with the provision if in the implementation of such function causes the bankruptcy assets to be reduced, then the money disbursement which is part of the bankruptcy assets, is the Receiver authority.

Paragraph (2) by “local timing” means the place where the decision of bankruptcy declaration is

pronounced by the Commercial Court, foe example, the decision is pronounced in Jakarta on July 1, 2001 at 13.00 Western Indonesia Time, then such decision shall be effective as from 00.00 Western Indonesia Time on July 1, 2001.

Paragraph (3) Fund transfer through a bank is required to be excepted to ensure the constant and certainty

of the system transfer through a bank. Paragraph (4) Securities transfer in the Stock Exchange is require to be excepted to ensure the constant

and certainty of law on securities transaction in the Stock Exchange. The settlement of Securities Transaction in the Stock Exchange may be conducted in

accordance with the terms of book entry settlement or other terms in accordance with the laws and regulations in the capital Market sector.

Article 25

All arising Debtor’s contract after the decision of bankruptcy declaration may no longer be paid from the bankruptcy assets, except such contract give benefit to bankruptcy assets. Elucidation of Article 25 Sufficiently clear.

Article 26

(1) Claim concerning right and obligation concerning the bankruptcy assets must be filed by or to the Receiver.

(2) In the event that claim as intended by paragraph (1) is filed or continued by or to the Receiver of

Bankrupt Debtor, then if such claim caused a punishment against the Bankrupt Debtor, such punishment shall not have legal consequences against the bankruptcy assets.

Elucidation of Article 26 Sufficiently clear. .

Article 27

During the bankruptcy, claim to obtain the contract fulfillment of the bankruptcy assets appointed to the Bankrupt Debtor may only be filed by registering it to be reviewed. Elucidation of Article 27 Sufficiently clear

Article 28


(1) A legal claim filed by the Debtor and which still in the bankruptcy process, upon the defendant request, the case must be adjourned to give the defendant the opportunity to summon the Receiver to take over the case in a period determined by the Judge.

(2) In the event that the Receiver does not react to the summons, the defendant is entitled to invoke that

the case to be release, and if this matters is not requested by the defendant, the case between the Debtor and the defendant may be continued without cost to the bankruptcy assets.

(3) Terms as intended by paragraph (2) shall be applicable also if the Receiver rejected to take over

such case. (4) Even without being summoned the Receiver is entitled to take over the case at any time and have

the Debtor is released from the case. Elucidation of Article 28 Paragraph (1) “Taking over a case” means an assignment of creditor position as the defendant, transferred

to the Receiver. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear.

Article 29

A legal claim in the Court filed against the Debtor insofar is intended to acquire the obligation fulfillment from the bankruptcy assets and the case is in process, shall be void by law and the decision of bankruptcy declaration is pronounced against the Debtor. Elucidation of Article 29 Sufficiently clear.

Article 30

In the event that a case is continued by the Receiver against the opposing party, then the Receiver can filed cancellation on every actions conducted by the debtor before the concerned is declared bankrupt, if it is can proven that the Debtor’s action were conducted for the purpose of to caused losses to the Creditor and this matters is acknowledge by the opposing party. Elucidation of Article 30 Sufficiently clear

Article 31

(1) The decision of bankruptcy declaration will have the result, that all stipulation of Court execution against every part of the bankruptcy assets that has started before the bankruptcy, must be immediately terminated and as from then, no decision can be perform including or even to detain the Debtor.

(2) All confiscation which has been executed shall be nullified and the Supervisory Judge shall order the

deletion insofar as may be necessary.


(3) Without prejudice to the terms as intended by Article 93, the Debtor who is still in detention shall be

released immediately after the decision of bankruptcy declaration is pronounced. Elucidation of Article 31 Paragraph (1) Without prejudice to the provision of Article 56, Article 57, and Article 58, this provision shall

not be applicable for Creditor as described in Article 55. Paragraph (2) What is meant by “if Supervisory Judge is required must order a nullification to the land

seizure or registered vessel. Paragraph (3) ”Detention” in this provision means gijzeling.

Article 32

During the Debtor Bankruptcy a fine shall not be imposed. Elucidation of Article 32 Fine in this Article covers a fine imposed before the decision of bankruptcy declaration is

pronounced.

Article 33

If prior to the bankruptcy declaration is pronounced, the process of eviction of the Debtor’s movable or immovable goods have advanced so far that the day of the sale was already fixed. The Receiver may upon authorization by the Supervisory Judge have the sale continued on account of the bankruptcy assets. Elucidation of Article 33 The proceed of sale of Debtors properties includes into the bankruptcy assets and is not given to

such execution petitioner.

Article 34

Except if it is determined otherwise by this Law, the agreement that intended to dispose of the right on land, transfer of vessel ownership, security rights charges, mortgage, or fiduciary guarantee which has been agreed upon, shall not be performed after the decision of bankruptcy declaration is pronounced. Elucidation of Article34 Sufficiently clear.

Article 35 In the event a demand is filed for verification, such filling Elucidation of Article35 Sufficiently clear.

Article 36

(1) In the event that at the time the decision of bankruptcy declaration is pronounced, there is an executory contract that has not yet or has only partially been performed, then the party whit whom the debtor had contracted may request confirmation from the Receiver with regard to the continuation of the performance of such contract within a time period agreed to by the Receiver and such party.


(2) In the event that the agreement concerning time period as intended by paragraph (1) is not met, the Supervisory Judge shall stipulate the said time period.

(3) If the Receiver does not answer or is not willing to continue the performance of such agreement, the

agreement shall be terminated and the party as intended by paragraph (1) may claim compensation and shall be treated as a unsecured creditor.

(4) If the Receiver declares his willingness then the Receiver shall be obliged to provide security on his

effort to perform such agreement. (5) Terms as intended by paragraph (1), paragraph (2), paragraph (3), and paragraph (4) shall not be

applicable to contracts that obligates the debtor to personally perform the contract. Elucidation of Article 36 Sufficiently clear

Article 37

(1) In the event that the terms as intended by Article 36, a delivery of goods that are usually sold in a time period and the party that must deliver such goods before the delivery is performed it is stated bankrupt, therefore the contract shall become null with the decision of bankruptcy declaration being pronounced, and in the event that the opposing party were damage caused by the annulment then the concerned may represent himself as the unsecured creditor to acquire the compensation.

(2) In the event that the bankruptcy assets were harmed by the annulment as intended by paragraph (1) then the opposing party must pay the said compensation.


Article 38

(1) If the Debtor has rented an object, then both Receiver and the lessor may terminate the lease, with

the condition that notice of termination is performed prior to the termination of the agreement in accordance with the local custom.

(2) In the event that the termination is conducted as intended by paragraph (1), must deliver a notice of

termination according to the agreement or custom in the period of the shortest 90 (ninety) days. (3) In the event that the lease has been paid advance, then the lease agreement shall not be soon

terminated before the period that has been paid in advance terminates. (4) As from the date of decision of bankruptcy declaration is pronounced, the lease shall become debts

of bankruptcy assets. Elucidation of Article 38 Sufficiently clear.

Article 39

(1) Workers who works for the Debtor may resign, and on the other hand the Receiver may render their dismissal with due observance of the period of the agreement or the prevailing laws and regulations, with the definition that such dismissal may be given within a period of 45 (forty five) days before.

(2) As from the decision of bankruptcy declaration is pronounced, indebted wages before and after the decision of bankruptcy declaration is pronounced shall represent debts of bankruptcy assets.

Elucidation of Article 39 Paragraph (1)


Provisions concerning Termination of Employment, the Receiver still has manpower laws and regulations as guidelines.

Paragraph (2) “Wages” means the employee’s right which is accepted and stated in the form of money as

remuneration from the employer to the employee based on the work of service that has been or will be performed, stipulated, and paid according to a work agreement, agreement, or laws and regulations, including allowance for employee and their families.

Article 40

(1) Inheritances which falls to the Bankrupt Debtor during the bankruptcy, by the Receiver may not be accepted unless it create benefit to the debts of bankruptcy assets.

(2) To reject the inheritance, the Receiver shall require a permit from the Supervisory Judge. Elucidation of Article 40 Sufficiently clear.

Article 41

(1) For the interest of bankruptcy assets, to the Court can be requested a cancellation of all legal acts of the Debtor who has been declared bankrupt which incurred losses to the interest of the creditors, conducted before the decision of bankruptcy declaration is pronounced.

(2) Cancellation as intended by paragraph (1) may only be performed if it can be proven that at the time the legal act is conducted, the Debtor and the party with whom such legal act were conducted shall be deemed to have acknowledge or should have acknowledge that such act would resulted in damage to the creditor.

(3) Excepted from the terms as intended by paragraph (1) is the Debtor’s legal act which must be performed based on the agreement and/or law.

Elucidation of Article 41 Paragraph (1) Sufficiently clear. Paragraph (2) What is meant by “party with whom such act is conducted” in this provisions, includes parties

for whom such agreement is made. Paragraph (3) Act which is obliged to be conducted because of law, such as, the obligation to pay tax.

Article 42

If the legal act which caused damage to the Creditor is conducted in the term of 1 (one) year before the decision of the bankruptcy declaration is pronounced, and such act shall not be obligated for the Debtor to perform, except if it can be proven otherwise, Debtor and the party with whom such legal act is conducted shall be deemed to have known or should have known that such act would resulted in damage to the Creditor as intended by Article 41 paragraph (2), in the event that such acts: a. constitutes a contract in which the obligations of the Debtor considerably exceed the obligations of the

party with whom the contract was made; b. constitutes a payment of, or security for, a debt which is not yet due and not payable; c. is performed by an individual debtor with or vis-à-vis: 1) his or her spouse, foster child or relative up to the third degree;


2) a legal entity which the Debtor or the parties described in point 1 are the members of the Board of Directors or managers or in which said parties, severally or jointly participate directly or indirectly in the ownership of said legal entity for at least 50% (fifty percent) of the paid up capital or in the legal entity management.

d. is performed by a Debtor being a legal entity with or for the interest of: 1) members of the Board of Directors or managers of the Debtor, or a spouse, or foster child or

relative up to third degree of any members of the said Board of Directors or managers; 2) any individual, severally or jointly with the spouse, foster child, or relative up to the third degree

of said individual who participates directly or indirectly in the ownership of the Debtor of more than 50% (fifty percent) of the paid-up capital or in the legal entity management.

3) an individual, whose spouse, or foster child, or relative up to the third degree, participates directly or indirectly in the ownership of the Debtor of more than 50% (fifty percent) of the paid-up capital or in the legal entity management.

e. is performed by the Debtor being a legal entity with or with respect to another legal entity, if: 1) an individual member of the Board of Directors or manager of both legal entities is the same

person; 2) the spouse, or foster child, or relative up to the third degree, of an individual member of the

Board of Directors or manager of the Debtor is a member of the Board of Directors or manager in the other legal entity, or vice versa;

3) an individual member of the Board of Directors, or manager, or member of the board of supervisors of the Debtor, or a spouse, or foster child, or relative up to the third degree, participates, severally or jointly, directly or indirectly, in the ownership of the other legal entity of more than 50% (fifty percent) of the paid-up capital or in the legal entity management.

4) the Debtor is a member of the Board of Directors or a manager in the other legal entity or vice versa;

5) the same legal entity, or the same individual, or either together with or separately for his or her spouse, and or his or her foster children and his or her relatives up to the third degree, participates, directly or indirectly in both entities for at least 50% (fifty percent) of the paid-up capital;

f. is performed by a Debtor begin a legal entity with or with respect to a legal entity in a group of a legal

entities of which the Debtor is a member; g. terms in point c, point d, point e, and point f shall be valid mutatis mutandis in the event it is conducted

by the Debtor with or for the interest of: 1) member of a legal entity, or a spouse, or foster child, or relative up to the third degree of any

members of said Board of Directors; 2) any individual, severally or jointly with the spouse, foster child, or relative up to the third degree

of said individual who participates directly or indirectly in the legal entity management. Elucidation of Article 42 Point a Sufficiently clear. Point b Sufficiently clear. Point c Point 1) “Foster child” means a child appointed based on stipulation of the court and foster

child based on custom law of the Bankrupt Debtor.


“His relatives” means a relationship based on marriage or descent horizontally or vertically.

Point 2) “Members of the Board of Directors” means the members of the supervisory board,

or individuals participated in the ownership, including every person that has held such position in the period of less than 1 (one) year before such action is conducted.

Point d

“Ownership” means the capital ownership or share capital.

Point e Control is the ability to directly or indirectly determine, by any means of the company

management and/or policy. Parties having 25% or more shares from the share amount that has been issued and have voting rights on the company is deemed to have control such company, except the party concerned can prove to have conducted no control, as for he parties having less than 25% from the share amount that has been issued and have voting rights on the company is deemed not to have control of such company, except the party concerned can prove to have conducted control.

Point f In the stipulation of this provision, a legal entity which is a member of the Board of Directors

in the form of legal entity, shall be treated as the Board of Directors in the form of such legal entity.

Point g Sufficiently clear.

Article 43

Annulment of a gift made by a Debtor may be requested, if the Receiver can prove that at the time said gift was made, the Debtor knew or should have known that said action would result in damage to the creditors Elucidation of Article 43 With this provision, the Receiver does not need to prove that such grant beneficiary acknowledge or

should acknowledge that such actions may cause losses to the Creditor.

Article 44

Unless it can be proven otherwise, the Debtor shall be deemed to have known or should have known that said gift would damage the creditors if said gift were made within a time period of 1 (one) year before the decision of bankruptcy declaration is rendered. Elucidation of Article 44 Sufficiently clear. .

Article 45

Nullification of a payment by a Debtor, of a claimable debt may be invoked only, if it is proven that either he, who received the payment, had known that the bankruptcy of the Debtor had been registered, or the payment resulted from deliberations between the Debtor and Creditor meaning to favor the latter by that payment over the other creditors. Elucidation of Article 45 Sufficiently clear.


Article 46

(1) Based on the provision as intended by Article 45, payment that has been received by the holder of

replacement letter or document because of his legal relation with formal holders is obliged to accept the payment, such payment may not be repaid

(2) In the event that payment can be repaid as intended by paragraph (1), the individual that acquire benefit as a cause of the issuance of replacement letter or document, is obliged to give it back to the bankruptcy assets the total amount that has been paid to the Debtor if:

a. can be proven that on the time of issuance as intended by paragraph (1) the concerned known that the bankruptcy petition of the Debtor has already been registered; or

b. the issuance of such letter is a result of conspiracy between the Debtor and the initial holder. Elucidation of Article 46 Sufficiently clear.

Article 47

(1) Claim on rights based on the provision as intended by Article 41, Article 42, Article 43, Article 44, Article 45, and Article 46 is filed by the Receiver to the Court.

(2) Creditor based on the reasons as intended by Article 41, Article 42, Article 43, Article 44, Article 45, and Article 46 may file a rebuttal against the Receiver’s claim.


Article 48

(1) In the event that the bankruptcy ends with amicable settlement, then claim as intended by Article 47 shall be cancelled.

(2) Claim as intended by Article 47 shall not be cancelled, if such amicable settlement includes the relinquishment of bankruptcy assets, in which case the claim can be continued or filed by the acquitters.

Elucidation of Article 48 (Missing text)

Article 49

(1) Every person who has received goods which are a part of the debtor asset contained in the legal action that has been cancelled, must return such goods to the Receiver and report it to the Supervisory Judge.

(2) In the event that the people as intended by paragraph (1) can not return the goods that has been accepted in the first situation, is obliged to pay for compensation to the bankruptcy assets.

(3) The third party’s right as intended by paragraph (1) acquired with good faith and is not free, must be protected.

(4) Goods that has been accepted by the Debtor or the substitute value is obliged to be returned by the Receiver, so long as the bankruptcy assets benefits, and as to the shortage, of person against whom the cancellation was claimed may perform as a unsecured creditor.

Elucidation of Article 49 Paragraph (1) Sufficiently clear. Paragraph (2)


Sufficiently clear. Paragraph (3) What is meant by “good faith and is not free” includes the holder of collateral right on such

goods. Paragraph (4) Sufficiently clear

Article 50

(1) Payment after the bankruptcy declaration is pronounced but prior to the notification, made to the

bankrupt Debtor in compliance with agreements concluded with him prior to bankruptcy declaration, will free him from the bankruptcy assets so far as it is not proven that the concerned has acknowledge such decision of bankruptcy declaration.

(2) Payment as intended by paragraph (1) being made after the decision of bankruptcy declaration is

pronounced, will not free him from the bankruptcy assets except if the people who made it can prove that the announcement of decision of bankruptcy declaration which is conducted in accordance with the law could not have been known.

(3) Payment to the Bankrupt Debtor, will free the Debtor against the bankruptcy assets, if the payment

benefits the bankruptcy assets. Elucidation of Article 50 Sufficiently clear.

Article 51

(1) Every person who has debts or claims against the Bankrupt Debtor, can request for set off, if his debts or claim is issued before the decision of bankruptcy declaration is pronounce, or as a cause from actions conducted with the Bankrupt Debtor before the decision of bankruptcy declaration is pronounced.

(2) In the event it requires, the claim against the Bankrupt Debtor shall be calculated in accordance with the provision as intended by Article 136 and Article 137.


Article 52

(1) Every person who has taken over a debt or claim from the third party before the decision of bankruptcy declaration is pronounced, can not requested a debt set off, if at the time of expropriation of debts and claim, the concerned person does not have good faith.

(2) All debts and claim which is taken over after the decision of bankruptcy declaration is pronounced can not be met.

Elucidation of Article 52 Paragraph (1) “Debt set off” means compensation. Paragraph (2) Sufficiently clear.


Article 53

Every person who has debts to the Bankrupt Debtor who wishes to conduct debts set off with a registered claim or replacement claim, is obliged to prove that at the time the decision of bankruptcy declaration is pronounced, such individual with good faith has already become the holder of the letter or substitute letter. Elucidation of Article 53 Sufficiently clear.

Article 54

Every person who find himself in the same community with the Bankrupt Debtor, which as a result of or during the bankruptcy of the Debtor was dissolved, is entitled from the share of the Bankrupt debtor in the benefits at the distribution to deduct his share in the debts committed in relation with said community. Elucidation of Article 54 Sufficiently clear.

Article 55

(1) with due observance of the provision as intended by Article 56, Article 57, and Article 58, every Creditor holder of collateral, fiduciary guarantee, security right mortgage, collateral right on other properties, may execute his rights as if there were no bankruptcy.

(2) In the claim collection as intended by Article 136 and Article 137, they can only act after the collection has been justified and only to collect the payment of the total amount acknowledge from such collection.

Elucidation of Article 55 Sufficiently clear

Article 56 (1) Creditor execution right as intended by Article 55 paragraph (1) and third party rights to claim its

asset which are under the Bankrupt Debtor or Receiver, shall be deferred for a period at the latest 90 (ninety) days as from the decision of bankruptcy declaration is pronounced.

(2) Deferment as intended by paragraph (1) shall not be valid against the Creditor bills guaranteed by cash and the Creditor rights to perform a debts set off.

(3) During debts deferment as intended by paragraph (1), the Receiver may use bankrupt assets in the form of movable and immovable goods or to sell the bankrupt assets in the form of movable which are under the Receiver control in the context of continuity of the Debtor’s business, in the event that a reasonable protection has been provided for the interest of the Creditor or the third party as intended by paragraph (1).

(4) During the deferment as intended by paragraph (1), the Receiver may use the debtor asset in the form of immovable and movable goods or to sell bankrupt asset in the form of movable goods which are under the Receiver control in the context of the continuity of the Debtor’s business, insofar for which case, a reasonable protection has been provided for the Creditor’s interest or the third party as intended by paragraph (1).

Elucidation of Article 56 Paragraph (1) What is meant by deferred in this provision has purposes, among others: - To enlarge the possibility of amicable settlement; or - To enlarge the possibility to optimized the bankrupt assets; or - To let the Receiver perform his duties optimally.


During the deferment period, all lawsuit to obtain payment on a claim can not be filed in a judicature court, and for the said Creditor and the third party is not allowed to executed or apply for seizure on goods that has become collateral.

Paragraph (2) Include in the exception towards the deferment in this matter is the Creditor’s right arose

from the debt set off which is part or caused from the transaction mechanism occurred in the Stock Exchange and the Deposit Trade Exchange.

Paragraph (3) Bankruptcy assets that can be sold to the Receiver is limited to the inventory and/or current

assets, although such bankrupt assets is borne with collateral right on properties. “reasonable protection” means protection that need to be given to protect the Creditors or

the third parties interest which rights are deferred. With the asset court concerned, such property right is deemed terminated by law.

a. compensation on the bankrupt asset write-down; b. net proceed of sale; c. substitute property right; or d. reasonable and fair compensation along with other cash payment (secured debts). Paragraph (4) Sufficiently clear.

Article 57 (1) Period as intended by Article 56 paragraph (1) terminates by law at the time the bankruptcy is ended

sooner or at the time the insolvency condition as intended by Article 178 paragraph (1). (2) Creditor or the third party whose rights is being deferred may file an application or change such

deferment conditions. (3) If the Receiver rejected the application as intended by paragraph (1), the Creditor or the third party

may file such application to the Supervisory Judge. (4) The Supervisory Judge in the term of no later than 1 (one) day after the application as intended by

paragraph (2) is accepted, is obliged to order the Receiver to immediately summon with recorded letter or through courier, the Creditor and the third party as intended by paragraph (2) to be listened at the examination hearing upon such application.

(5) The Supervisory Judge is obliged to give a stipulation on the application in the term of no later than 10 (ten)days after the application as intended by paragraph (2) is filed to the Supervisory Judge.

(6) In resolving the application as intended by paragraph (2), the Supervisory Judge shall consider: a. the period of deferment that has occurred; b. the protection for the Creditor’s interest and the said third party; c. the impact of such deferment on the business continuity and the Debtor’s business

management along with the settlement of debtor asset. Elucidation of Article 57 Paragraph (1) “Insolvency” means a situation of not being able to pay. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear.


Paragraph (5) Sufficiently clear. Paragraph (6) Matters that requires consideration from the Supervisory Judge as described in this

provisions does not ensure the possibilities for the Supervisory Judge to consider other matters insofar as it is required to secure and optimized the value of bankrupt asset.

Article 58

(1) The stipulation of the Supervisory Judge on the application as intended by Article 57 paragraph (2)

can be in the deferment appointment for one or more Creditor, and/or stipulate requirements with regards of the deferment period, and/or on one or several collateral which can be executed by the Creditor.

(2) If the Supervisory Judge rejects to appoint or to change the requirements of such deferment, the Supervisory Judge is obliged to order that the Receiver provides protection which is deemed reasonable in order to protect the interest of the petitioner.

(3) Towards the stipulation of the Supervisory Judge, Creditor or the third party who filed the application as intended by Article 57 paragraph (2) or the Receiver may file a defense to the Court in the term of no later than 5 (five) days after the decision is pronounce, and the Court is obliged to resolve such defense in the term of no later than 10 (ten) days after such defense is received.

(4) Towards the Court decision as intended by paragraph (2) can not file a legal remedy whatsoever including reconsideration.

Elucidation of Article 58 Paragraph (1) Sufficiently clear. Paragraph (2) Regarding the protection given for the Creditor’s interest or the third party mentioned, see

elucidation Article 56 paragraph (3). Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear.

Article 59

(1) With due observance of the provisions in Article 56, Article 57, and Article 58, the Creditor holder of

right as intended by Article 55 paragraph (1) must perform its right in the term of no later than 2 (two) months after the insolvency condition commenced as intended by Article 178 paragraph (1).

(2) After the due date as intended by paragraph (1), the Receiver must claim the delivery of goods which become the collateral to be sell further in accordance with the terms as intended by Article 185, without prejudice to the Creditor holder of such rights of the proceeds of such collateral sale.

(3) At any time the Receiver may free the goods which become the collateral by paying the smallest amount between collateral goods market price and the total debts guaranteed with such collateral goods to the Creditor concerned.

Elucidation of Article 59 Paragraph (1) What is meant by “must perform its right” is that creditor has already perform its rights. Paragraph (2)


Sufficiently clear. Paragraph (3) What is meant by “smallest amount” is the smallest amount between the market price of

collateral goods compared with the amount of debts secured with collateral goods.

Article 60

(1) Creditor holder of rights as intended by Article 55 paragraph (1) which performs their rights , is

obliged to give their responsibilities to the Receiver with regard to the proceeds from the sale which become collateral and deliver the remain proceed from the sale after being reduced with the total amount of debts, interest, and fees to the Receiver.

(2) Upon claim from the Receiver or privileged Creditor which position is higher than the Creditor holder of right as intended by paragraph (1), the Creditor holder of right is obliged to deliver part of the proceeds from such sale for the same amount with the privileged amount of claim.

(3) In the event that the proceeds from the sale as intended by paragraph (1) is insufficient to cover the claim concerned, such Creditor holder of rights may file the acquittal claim on such deficiency from the bankrupt assets as unsecured creditor, after filing the request for claim concurrence.

Article 60 Paragraph (1) Sufficiently clear. Paragraph (2) What is meant by “privileged Creditor” is a Creditor holder of rights as described in Article

1139 and Article 1149 of the Indonesian Civil Code. Paragraph (3) Sufficiently clear.

Article 61

Creditor having the right to retain goods owned by the debtor, shall not loss their rights because of a decision of bankruptcy declaration. Elucidation of Article 61 Right to retain goods owned by the Debtors shall continue until the debts are settled.

Article 62

(1) In the event that spouse is declared bankrupt, then the spouse has the right to retake all movable and immovable goods which is an individual asset from the spouse and asset acquired respectively as a gift or inheritance.

(2) If the goods owned by the spouse and the payment has not been paid or the cash from the proceeds from the sale has not been combined with the bankrupt assets, then the spouse is entitled to retake the money of such proceeds from the sale.

(3) For private claim against the spouse, then the Creditor toward bankruptcy assets is a spouse. Elucidation of Article 62 Sufficiently clear.

Article 63

Spouse is not entitled to claim the benefit that contained in the wedding agreement to the spouse bankrupt assets declared bankrupt, so as the spouse Creditor declared bankrupt is not entitled to claim the benefit contained in the wedding agreement to the spouse which declared bankrupt.


Elucidation of Article 63 This Article is an exception of Article 62 paragraph (3).

Article 64

(1) Spouse bankruptcy who married in a joint property shall be treated as such joint property bankruptcy. (2) Without prejudice to the exception as intended by Article 25, such bankruptcy covers all goods

included in the joint, as the said bankruptcy is for the interest of the Creditor, which is entitled to claim payment from the joint property.

(3) In the event that the spouse is declared bankrupt has goods that are not included into the joint property, then such goods shall be included into bankrupt assets, nevertheless can only be use to pay private debts of spouse whose declared bankrupt.

Elucidation of Article 64 Sufficiently clear. .

Third Section Bankrupt Asset Management

Paragraph 1

Supervisory Judge Article 65

The Supervisory Judge monitors the management and settlement of bankrupt assets. Elucidation of Article 65 Sufficiently clear.

Article 66

The Court is obliged to hear the opinion of the Supervisory Judge, before resolving a decision with regard to the management and settlement of bankrupt asset. Elucidation of Article 66 Sufficiently clear

Article 67

(1) The Supervisory Judge shall be entitled to hear the information from the witness or order an investigation by the experts in order to acquire clarity on all matters related to bankruptcy.

(2) Witness shall be summoned on behalf of the Supervisory Judge. (3) In the event that the witness does not come or reject to testify, then the Civil Procedural Law shall be

applied. (4) In the event that the witness domiciles outside the jurisdiction of the Court resolving the bankruptcy,

the Supervisory Judge may delegate the examination of such witness to the court having jurisdictionover the domicile of the witness.

(5) Spouse, ex-spouse, and the biological family according to the up-descent and down-descent of the Bankrupt Debtor has the right to resign as a witness.

Elucidation of Article 67 Paragraph (1) Sufficiently clear.


Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) “Biological family” shall include foster child.

Article 68

(1) Towards all stipulation of the Supervisory Judge, application for an appeal to the Court can be submitted within 5 (five) days upon such stipulation is made.

(2) Application for an appeal can not be submitted against a stipulation as intended by Article 22 point b, Article 33, Article 84 paragraph (3), Article 104 paragraph (2), Article 106, Article 125 paragraph (1), Article 127 paragraph (1), Article 183 paragraph (1), Article 184 paragraph (3), Article 185 paragraph (1), paragraph (2), and paragraph (3), Article 186, Article 188, and Article 189.


Paragraph 2 Receiver

Article 69

(1) The Receiver duty is to perform management and/or settlement of bankruptcy assets. (2) In performing its duty, the Receiver: a. is not obligated to obtain the approval from or to submit prior notification to the Debtor or one

of the Debtor’s organ, notwithstanding that the approval or notification outside the bankruptcy is required;

b. May undertake loan from the third party, only in the frame work to improve the value of bankruptcy assets.

(3) In the event to undertake loan from the third party, the Receiver is required to encumber the bankruptcy assets with pledge, fiduciary guarantee, security right, mortgage, or other rights on securities over properties, then such loan must be initially approved by the Supervisory Judge.

(4) Encumbrance of the bankruptcy assets with pledge, fiduciary guarantee, security right, mortgage, or other rights on securities over properties as intended by paragraph (3), can only be carried out against part of the bankruptcy assets which has not yet been encumbered for indebtedness.

(5) To appear before the Court hearing, the Receiver must initially obtain permit from the Supervisory Judge, except in relation to receivables verification disputes or in matters as intended by Article 36, Article 38, Article 39, and Article 59 paragraph (3).


Article 70 (1) Receiver as intended by Article 69 are: a. Probate Court; or b. Other Receivers. (2) Those who can become a Receiver as intended by paragraph (1) point b, are:


a. individuals domiciled in Indonesia, having special expertise required in the frame work to manage and/or settle the bankruptcy assets and

b. registered in the ministry having the scope of duties and responsibilities in the field of laws and regulations.

Elucidation of Article 70 Paragraph (1) Sufficiently clear. Paragraph (2) Point a “Special expertise” shall mean those who attended and graduated from the

Receiver and administrator education. Point b “Registered” shall mean those who has satisfy the registration requirements in

accordance with the prevailing laws and regulations and is an active member of the organization of Receiver and administrator profession.

Article 71

(1) The Court at any time may approve the proposal to replace the Receiver, after summoning

and hearing the Receiver, and to appoint other Receiver and/or appoint additional Receiver at:

a. the Receiver own request; b. the other Receiver’s request, if any; c. the Supervisory Judge’s proposal; or d. the Bankrupt debtor’s request. (2) The Court must dismiss or appoint a Receiver upon a request or proposal from the

concurrent creditors based on the Creditors meeting resolution conducted as intended by Article 90, with requirements that such resolution is resolved based on the affirmative votes of more than ½ (half) of the total concurrent creditors or their proxies who attend in the meeting and represent more than ½ (half) of the total receivables of the concurrent creditors or their proxies who attend such meeting.


Article 72

The Receiver shall be responsible for his mistakes or negligence in performing his management and/or settlement duties causing losses to the bankruptcy assets. Elucidation of Article 72 Sufficiently clear.

Article 73

(1) In the event more than one Receiver have been appointed, the Receivers shall require the approval of more than ½ (half) of the Receivers to undertake valid and binding actions.

(2) In the event of tie votes, the actions as intended by paragraph (1) must obtain the approval from the Supervisory Judge.

(3) A Receiver designated for a special task based on the decision of bankruptcy declaration, shall be entitled to act independently within the limits of his task.



Article 74

(1) The Receiver must submit regular reports to the Supervisory Judge concerning the condition of the

bankruptcy assets and the performance of his duties in every 3 (three) months. (2) The reports as intended by paragraph (1) shall be open to the public and available to be sighted by

any person without any charge. (3) The Supervisory Judge may extend the period as intended by paragraph (1). Elucidation of Article 74 Sufficiently clear

Article 75

The amount of the Receiver’s service fees shall be determined upon the bankruptcy is ended. Elucidation of Article 75 Sufficiently clear.

Article 76

The amount of service fee that must be paid to the Receiver as intended by Article 75 shall be stipulated based on the guidance determined in the Ministerial Decree having the scope of duties and responsibilities in the field of laws and regulations. Elucidation of Article 76 In stipulating the guidance of service fees amount for the Receiver, the Minister having the scope of

duties and responsibilities in the field of laws and regulations shall consider the level of ability or expertise of the Receiver and the level of case complexity.

Article 77

(1) Every Creditors, creditors committee, and Bankrupt debtor may file an objection letter to the

Supervisory Judge against actions conducted by the Receiver or request the Supervisory Judge to issue an order letter for the Receiver to undertake certain actions or not to undertake actions that has been planned.

(2) The Supervisory Judge must convey the objection letter to the Receiver by no later than 3 (three) days after the objection letter was received.

(3) The Receiver must provide his response to the Supervisory Judge by no later than 3 (three) days after receiving the objection letter.

(4) The Supervisory Judge must provide his stipulation by no later than 3 (three) days after receiving the Receiver’s response.


Article 78

(1) Without the authorization or permit from the Supervisory Judge, in the event that such authorization or permit is required, or the incompliance with the provisions as intended by Article 83 and Article 84, it will not affect the validity of the Receiver’s actions against the third party.

(2) In relation to such actions, the Receiver himself shall be responsible against the Bankrupt Debtor and Creditors.



Paragraph 3

Creditors Committee

Article 79 (1) In the bankruptcy decision or with further stipulation, the Court may form a temporary creditors

committee consist of 3 (three) individual elected from the known Creditors in order to provide advice to the Receiver.

(2) The appointed Creditor may be represented by other individual for all works related to his duties in the committee.

(3) In the event that the appointed Creditor rejects his appointment, terminates, or dies, the Court must replace such Creditor by appointing one of 2 (two) candidates proposed by the Supervisory Judge.

Elucidation of Article 79 Paragraph (1) “Known Creditor” shall mean Creditor who has registered itself to be verified. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear

Article 80

(1) Upon the completion of debts verification, the Supervisory Judge shall be obligated to offer the

Creditors to form a permanent creditors committee. (2) At the unsecured creditors’ request based on the unsecured creditors decision adopted on a simple

majority votes in the Creditors meeting, the Supervisory Judge shall: a. replace the temporary creditors committee, if in the bankruptcy decision has been appointed

such temporary creditors committee; or b. form a creditors committee, if in the bankruptcy decision a creditors committee has not yet

been appointed. Elucidation of Article 80 Sufficiently clear.

Article 81

(1) The creditors committee at any time shall be entitled to request that all books, documents, and correspondences concerning the bankruptcy to be shown.

(2) The Receiver shall be obligated to provide all information requested by the creditors committee. Elucidation of Article 81 Sufficiently clear.

Article 82

If it is necessary, the Receiver may conduct a meeting with the creditors committee for seeking advice. Elucidation of Article 82 Sufficiently clear.

Article 83


(1) Prior to file a claim or continue the ongoing case, or repudiate filed or ongoing claim, the

Receiver shall be obligated to seek the creditors committee’s opinion. (2) The provisions as intended by paragraph (1) shall not apply for disputes concerning receivables

verification, concerning to continue or not to continue the bankrupt company, matters as intended by Article 36, Article 38, Article 39, Article 59 paragraph (3), Article 106, Article 107, Article 184 paragraph (3), and Article 186 concerning the settlement and sale of bankruptcy asset, and concerning time and the amount of division that must be made.

(3) The creditors committee’s opinion as intended by paragraph (1) shall not be required in the event the Receiver has summoned the creditors committee to convene a meeting to provide the opinion, nevertheless within 7 (seven) days upon the summon, the creditors committee did not provide such opinion.


Article 84

(1) The Receiver shall not be bound by the creditor committee’s opinion. (2) In the event the Receiver does not approve the creditors committee’s opinion, the Receiver

shall be obligated to notify the creditors committee on the same within 3 (three) days. (3) In the event the creditors committee does not approve the Receiver’s opinion, the creditors

committee may request the Supervisory Judge’s stipulation within 3 (three) days upon the notification as intended by paragraph (2).

(4) In the event the creditors committee requests the Supervisory Judge’s stipulation, the Receiver shall be obligated to postpone the implementation of actions that have been planned for 3 (three) days.

Elucidation of Article 84 Paragraph (1) Sufficiently clear. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Such 3 (three) days period shall be the dates after the creditors committee request the Supervisory

Judge’s stipulation, except the Supervisory Judge approved the Receiver before the lapse of such 3 (three) days.

Paragraph 4

Creditors Meeting

Article 85

(1) The Supervisory Judge shall preside as the chairperson in the Creditors meeting. (2) The Receiver shall be obligated to attend in the Creditors meeting. Elucidation of Article 85 Sufficiently clear.

Article 86


(1) The Supervisory Judge shall determine day, date, time and location of the first Creditors meeting that must be convened in the period of no later than 30 (thirty) days upon the date of bankruptcy decision is pronounced.

(2) In the period of 3 (three) days upon the bankruptcy decision is received by the Supervisory Judge and the Receiver, the Supervisory Judge shall be obligated to convey to the Receiver the plan to convene the first Creditors meeting as intended by paragraph (1).

(3) In the period of no later than 5 (five) days upon the bankruptcy decision is received by the Receiver and the Supervisory Judge, the Receiver shall be obligated to notify the known Creditors concerning the Creditors meeting as intended by paragraph (2) through registered mail or courier, and advertisement in the least 2 (two) daily newspaper, with due observance to the provisions as intended by Article 15 paragraph (4).


Article 87

(1) Except as otherwise stipulated in this Law, all Creditors meeting’s resolutions shall be adopted based on affirmative votes of more than ½ (half) of the total votes cast by the Creditors and/or their proxies who attend the meeting concerned.

(2) In the event the Creditors attend the Creditors meeting and do not use their rights to vote, then their voting rights shall be calculated as disapproved votes.

(3) Further provisions concerning the calculation of the Creditors voting rights as intended by paragraph (1) shall be regulated in a Government Regulation.

(4) Assignment of receivables conducted by means of splitting the receivables after the decision of bankruptcy declaration is pronounced, does not create any voting rights for the new Creditors.

(5) In the event the assignment is conducted entirely after the decision of bankruptcy declaration is pronounced, the assignees Creditors acquire the voting rights of the assignors Creditors.

Elucidation of Article 87 Paragraph (1) “Proxy” in this paragraph does not have to be an advocate. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear.

Article 88 Creditor who retains voting rights shall be the acknowledged Creditor, Creditor who has been accepted with conditions, and the carrier of a bearer receivables which has been verified. Elucidation of Article 88 Sufficiently clear.

Article 89


Creditor who has informed the Receiver that for such bankruptcy, a proxy has been appointed or at a meeting, has authorized the other individual, then all summon and notification must be addressed to such proxy, except if the Creditor request the Receiver to deliver the summon and notification to the Creditor itself or another proxy. Elucidation of Article 89 Sufficiently clear.

Article 90 (1) The Creditors meeting shall be convened in accordance with the provisions in this Law. (2) In addition to the meeting as intended by paragraph (1), the Supervisory Judge may convene a

meeting if it is deemed necessary or upon the request of: a. creditors committee; or b. at least 5 (five) Creditors representing 1/5 (one-fifth) of the total acknowledged or accepted

with conditions receivables. (3) The Supervisory Judge shall be obligated to determine the day, date, time, and place of the meeting. (4) The Receiver shall summon all Creditors having voting rights through registered mail or courier, and

advertisement in at the least2 (two) daily newspaper as intended by Article 15 paragraph (4). (5) The summon through registered mail or courier, and advertisement in daily newspaper as intended

by paragraph (4) shall provide the agenda to be discussed in the meting. (6) The Supervisory Judge must determine the time period between the day of the notice and the

meeting. Elucidation of Article 90 Sufficiently clear.

Paragraph 5 Judge Stipulation

Article 91

All stipulation concerning management and/or settlement of bankruptcy assets shall be stipulated by the Court in the final level, unless otherwise provided in this Law. Elucidation of Article 91 “Stipulation” shall mean administrative stipulation, such as stipulation on Receiver’s honorarium,

appointment or termination of Receiver. “Court in the final level” shall mean that such stipulation does not open for legal remedy.

Article 92 All stipulation concerning management and/or settlement of bankruptcy assets as well as those stipulated by the judge, can be firstly executed, unless otherwise provided in this Law. Elucidation of Article 92 Sufficiently clear.

Section Four Actions After the Bankruptcy Declaration

And Receiver’s Duties

Article 93 (1) The Court with a decision of bankruptcy declaration or at any time thereafter, upon a proposal from

the Supervisory Judge, a request from the Receiver or a request of one or more Creditors and after


consulting with the Supervisory Judge, may order the Bankrupt Debtor to be detained, either to be placed in the State Detention House or at his own house, under the supervision of the public prosecutor appointed by the Supervisory Judge.

(2) Detention order as intended by paragraph (1) shall be carried out by the public prosecutor appointed by the Supervisory Judge.

(3) Detention period as intended by paragraph (2) shall be valid for the latest 30 (thirty) days as from the execution of such detention.

(4) At the end of such period as intended by paragraph (3), upon a proposal from the Supervisory Judge or a request from the Receiver or one or more Creditors and after consulting with the Supervisory Judge, the Court may extend the detention period for the latest 30 (thirty) days for each extension.

(5) Detention cost shall be borne to the bankruptcy assets as debts of the bankruptcy assets. Elucidation of Article 93 Sufficiently clear.

Article 94 (1) The Court shall be authorized to release the Bankrupt Debtor from the detainment upon a proposal

from the Supervisory Judge or a request from the Bankrupt Debtor with security deposit from the third party that the Bankrupt Debtor at any time will appear before the Court on the first summon.

(2) The amount of security deposit as intended by paragraph (1) shall be stipulated by the Court and if the bankrupt Debtor does not appear before the Court, such security deposit shall become the bankruptcy assets benefits.


Article 95

A request to detain the Bankrupt Debtor must be granted, if such request was based on reasons that the Bankrupt Debtor intentionally does not fulfill its obligations as intended by Article 98, Article 110, or Article 121 paragraph (1) and paragraph (2). Elucidation of Article 95 Sufficiently clear.

Article 96

(1) In the event the Bankrupt Debtor attendance is required for an action related to the bankruptcy

assets, then if the Bankrupt Debtor is in the detention, the Bankrupt Debtor may be taken from his detention place upon instruction of the Supervisory Judge.

(2) The instruction as intended by paragraph (1) shall be carried out by the public prosecutor’s office Elucidation of Article 96 Sufficiently clear

Article 97

During the bankruptcy, the Bankrupt Debtor may not leave his domicile without permission from the Supervisory Judge. Elucidation of Article 97 Sufficiently clear.

Article 98


Since his appointment, the Receiver must perform all efforts to protect the bankruptcy assets and to keep all correspondences, documents, money, jewelry, securities, and other commercial papers by giving a receipt. Elucidation of Article 98 Sufficiently clear.

Article 99 (1) The Receiver may request for a condemnation against the bankruptcy assets to the Court through

the Supervisory Judge based on the reasons to protect the bankruptcy assets. (2) The condemnation as intended by paragraph (1) shall be conducted by the bailiff at the place where

such bankruptcy assets is located with the attendance of 2 (two) witnesses one of whom shall be the representation of the local Regional Government.

Elucidation of Article 99 Paragraph (1) Sufficiently clear. Paragraph (2)

“representation of the local Regional Government” shall be the head of sub-district or head of village or mentioned by other name.

Article 100

(1) The Receiver must make a recording of the bankruptcy assets by no later than 2 (two) days

after receiving the decision letter of his appointment as the Receiver. (2) Recording of the bankruptcy assets can be held privately by the Receiver with the approval from the

Supervisory Judge. (3) The temporary creditors committee members shall be entitled to attend the making of such

record. Elucidation of Article 100

Sufficiently clear.

Article 101

(1) Goods as intended by Article 98, must be included into the bankruptcy assets record. (2) Goods as intended by Article 22 letter a, must be included into the minutes list attached to the record

as intended by Article 100. Elucidation of Article 101

Sufficiently clear.

Article 102

Soon after the bankruptcy assets record is made, the Receiver must make a list that states the nature, amount of receivables and debts of bankruptcy assets, names and addresses of the Creditors along with the amount of receivables of each Creditors. Elucidation of Article 102

Sufficiently clear.

Article 103

The bankruptcy assets record as intended by Article 100 and the list as intended by Article 102 shall be placed at the Clerk’s Office of the Court by the Receiver to be sighted by any person without any charge.



Article 104

(1) Based on the approval from the temporary creditors committee, the Receiver may continue the business of Debtor who has been declared bankrupt notwithstanding a cassation or reconsideration was filed against the decision of bankruptcy declaration.

(2) If in the bankruptcy, a creditor committee was not appointed, the Receiver shall require a permission from the Supervisory Judge to continue the business as intended by paragraph (1).

Elucidation of Article 104

Paragraph (1) See Article 84. Paragraph (2) Sufficiently clear.

Article 105

(1) The Receiver shall be authorized to open letters and telegrams addressed to the Bankrupt Debtor. (2) Letters and telegrams which are not related to the bankruptcy assets must be immediately delivered

to the Receiver. (3) The company that delivers letters and telegrams shall deliver the letters and telegrams addressed to

the Bankrupt Debtor. (4) All complaint and objection letters related to the bankruptcy assets shall be addressed to the

Receiver. Elucidation of Article 105

Based on Article 24 and Article 69, as from the bankruptcy decision was pronounced, all Debtors authorities to control and manage the bankruptcy assets including to obtain information concerning bookkeeping, records, bank accounts, and Debtors savings from the banks concerned shall transferred to the Receiver.

Article 106

The Receiver shall be authorized according to the condition to provide a sum of money stipulated by the Supervisory Judge for the Bankrupt debtor and his family living cost. Elucidation of Article 106 Sufficiently clear.

Article 107

(1) Upon the approval of the Supervisory Judge, the Receiver may assign the bankruptcy assets insofar as it is require to cover the bankruptcy expenses or if his detention shall cause losses to the bankruptcy assets, notwithstanding a cassation or reconsideration was filed against the bankruptcy decision.

(2) The provisions as intended by Article 185 paragraph (1) shall be applicable to paragraph (1). Elucidation of Article 107

Sufficiently clear.

Article 108


(1) Money, jewelry, securities, and other commercial paper must be kept by the Receiver itself unless the Supervisory Judge determines otherwise.

(2) Cash that is not required for bankruptcy assets settlement, must be kept by the Receiver in bank for the interest of the bankruptcy assets upon obtaining permission from the Supervisory Judge.

Elucidation of Article 108 “Kept by the Receiver itself” shall mean without prejudice to the possibility that such securities or

commercial papers are kept by the custodian, however the responsibility remains at the name of the Bankrupt Debtor. Such as, deposit in the name of he Receiver, qq Bankrupt Debtor.

Article109

The Receiver after requesting advice from the temporary creditors committee, if any, and with permission from the Supervisory Judge, shall be authorized to organize an amicable settlement in order to terminate the ongoing disputes or to prevent disputes from occurring. Elucidation of Article 109

“amicable settlement” in this Article shall mean the ongoing case in the Court.

Article 110

(1) The Bankrupt Debtor shall be obligated to appear before the Supervisory Judge, the Receiver, or the creditors committee if he have been summoned to provide information.

(2) In the event that spouse was declared bankrupt, the spouse who has been declared bankrupt must provide information concerning all actions they respectively performed against jointly assets.


Sufficiently clear.

Article 111

In the event of bankruptcy of a legal entity, the provisions as intended by Article 93, Article 94, Article 95, Article 96, and Article 97 shall only apply to the management of such legal entity, and the provisions of Article 110 paragraph (1) shall apply to the management and commissioners. Elucidation of Article 111

”Commissioners” shall include supervisory board. Article 112

At the request and expense of each Creditor, the Clerk shall be obligated to provide copies of letters provided at the Clerk Office to be sighted by whom may be concerned. Elucidation of Article 112

Sufficiently clear.

Section Five Verification of Receivables

Article 113

(1) By no later than 14 (fourteen) days after the decision of bankruptcy declaration is pronounced, the Supervisory Judge must stipulate:

a. due date for submission of claims; b. due date for tax verification to determine the amount of tax obligation in accordance with the

taxation laws and regulations; c. day, date, time and place for Creditors meeting for the verification of receivables.


(2) Time period between dates as intended by paragraph (1) letter a and letter b shall be at the shortest 14 (fourteen) days.


Sufficiently clear.

Article 114

The Receiver at the latest 5 (five) days upon the stipulation as intended by Article 113 shall be obligated to notify such stipulation to all Creditors whose addressed were known through letters and to announce it at least in 2 (two) daily newspaper as intended by Article 15 paragraph (4). Elucidation of Article 114

Sufficiently clear.

Article 115

(1) All Creditors shall be obligated to deliver each of their receivables to the Receiver accompanied with their calculation or other written information showing the nature and amount of receivables, along with their evidences or copies thereof, and a statement whether or not such Creditors retain privileges rights, pledge, fiduciary guarantee, security rights, mortgage, other rights on securities over properties, or rights to retain goods.

(2) upon delivery of receivables as intended by paragraph (1), the Creditors shall be entitled to request receipts from the Receiver.


Sufficiently clear.

Article 116

(1) The Receiver shall be obligated to: a. verify the calculation of receivables delivered by the Creditors with the record that has been

made before and the information from the Bankrupt Debtor; or b. negotiate with the Creditors if there are any objection against the accepted invoices. (2) The Receiver as intended by paragraph (1) shall be entitled to request the Creditors to submit letters

that have not yet been delivered, including to show the original notes and evidence letters. Elucidation of Article 116 Sufficiently clear

Article 117

The Receiver shall be obligated to include the approved receivables into a list of temporary receivables whichwere acknowledged, while for the denied receivables including their reasons shall be included into a separate list. Elucidation of Article 117

Sufficiently clear.

Article 118

(1) In the list as intended by Article 117, it shall be added with notes on each receivable whether based on the Receiver’s opinion, the receivables concerned shall be privileged or secured with pledge, fiduciary guarantee, security right, mortgage, other rights on securities over properties, or the rights to retain goods for the respective receivables which may be implemented.


(2) If the Receiver only denies the existence of a pre-emptive right or right to retain goods, the receivables concerned must be included into the list of temporary acknowledged receivables along with the Receiver’s notes concerning such rebuttals and their reasons.


Sufficiently clear.

Article 119

The Receiver shall be obligated to provide copies from each of the list as intended by Article 117 at the Clerk Office for 7 (seven) days before the verification of receivables, and everyone may sight it without charge. Elucidation of Article 119

Sufficiently clear.

Article 120

The Receiver shall be obligated to notify the known Creditor through letters concerning the existence of the list as intended by Article 119 along with the summon to attend a meeting of receivables verification by mentioning plan for amicable settlement if it has been delivered by the Bankrupt Debtor. Elucidation of Article 120

Sufficiently clear.

Article 121

(1) The Bankrupt Debtor shall be obligated to attend on his own in the meeting of receivables verification, so that he can provide information requested by the Supervisory Judge concerning the cause of bankruptcy and the condition of bankruptcy assets.

(2) Creditors may request information from the Bankrupt Debtor concerning matters explained through the Supervisory Judge.

(3) Inquiries asked to the Bankrupt Debtor and answers given by him, must be recorded in the minutes. Elucidation of Article 121

Sufficiently clear.

Article 122

In the event that a legal entity is declared bankrupt, all obligations as intended by Article 121 paragraph (1) and paragraph (2) shall be the responsibility of the management of such legal entity. Elucidation of Article 122

Sufficiently clear.

Article 123

In the meeting as intended by Article 121, Creditors may appear own their own or represented by their proxies. Elucidation of Article 123 Proxies as intended in this Article were not proxies as described in Article 7 and for the drawing up of

such power of attorney shall apply the laws and regulations from the country where such power of attorney was made.

Article 124


(1) In the meting as intended by Article 121, the Supervisory Judge shall read out the list of temporary acknowledged receivables and the list of receivables denied by the Receiver.

(2) Each Creditor whose name is listed in the list of receivables as intended by paragraph (1) may request the Receiver to provide information concerning each receivable and its allocation in the list, or may deny the accuracy of such receivable, an existence of pre-emptive right, rights to retain goods or may approve the Receiver’s rebuttal.

(3) The Receiver shall be entitled to revoke his temporary acknowledgement or rebuttal, or insist that the Creditors to affirm under oath concerning the accuracy of those receivables which were not denied by the Receiver or by one of the Creditor.

(4) In the event the initial Creditors have passed away, their successors shall be obligated to explain under oath that they were with good faith believe that such receivables are exist and have not been paid.

(5) In the event that it is deemed necessary to postpone the meeting, the Supervisory Judge shall determine the next meeting which shall be held in the period of 8 (eight) days after the meeting is postpone, without a summon.


Article 125

(1) Pronouncement of oath as intended by Article 124 paragraph (3) and paragraph (4) shall be obligated to be performed by the Creditors themselves or theirs representatives specially authorized for such purposes, either in the said meeting or on another day which has been determined by the Supervisory Judge.

(2) In the event the Creditors that were ordered to pronounce the oath do not attend or were not represented in the meeting, then the Clerk shall be obligated to notify the Creditors concerning the order to pronounce oath and the day that was determined to pronounce the oath.

(3) The Supervisory Judge shall be obligated to provide statement letters to the Creditors concerning oath that has been pronounced, unless such oath was pronounced in the Creditors meeting, then it must be recorded in minutes of the meeting concerned.


Paragraph (1) Power of Attorney as described in this paragraph may be in the form of authentic or privately

drawn up deed. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear.

Article 126

(1) Receivables that were not denied must be shifted into the list of acknowledged receivables, which were included into the minutes of meeting.

(2) In the event of receivables in the form of bearer letters or substitute letters, the Receiver shall record his acknowledgement on the letters concerned.

(3) Receivables that should be affirmed under oath as instructed by the Receiver, shall be accepted with conditions, until the time it is surely accepted after the oath has been pronounced at the time as intended by Article 125 paragraph (1).

(4) Minutes of meeting shall be signed by the Supervisory Judge and the substitute clerk. (5) Acknowledgement of the receivables recorded in the minutes of meeting shall have binding legal

force in the bankruptcy and its cancellation cannot be claimed by the Receiver, unless based on reason of fraud.



Article 127

(1) In the event of a rebuttal and the Supervisory Judge is unable to settle the dispute between both parties, although such dispute has been filed to the court, the Supervisory Judge shall order both parties to settle such dispute in court.

(2) The advocates representing the parties concerned must be the advocates as intended in Article 7. (3) The dispute as intended in paragraph (1) shall be simply examined. (4) In the event that the Creditor requesting verification of claim does not appear at the stipulated

hearing, such creditor is therefore deemed to have revoked his request and in the event the party that performed the rebuttal does not appear, then the concerned is deemed to have released his rebuttal, and the judge must acknowledge the claim concerned.

(5) The creditor who does not file a rebuttal at the verification meeting, is not authorized to join himself or conduct an interference in the case concerned.


Paragraph (1) What is meant by “court” in this article is the district court, court of appeals, or Supreme

Court. Paragraph (2) Sufficiently clear Paragraph (3) Sufficiently clear Paragraph (4) Sufficiently clear Paragraph (5)

Sufficiently clear

Article 128

(1) Examination towards rebuttal filed by the Receiver shall be deferred for the interest of law by ratifying the reconciliation in the bankruptcy, unless if the case correspondences have been delivered to the judge to be decided with terms that:

a. in the event the claims are accepted then the claims are deemed to be acknowledged in the bankruptcy;

b. the case expenses shall be borne by the Bankrupt Debtor. (2) The Debtor may take over a deferred case as intended in paragraph (1) as substitute Receiver

based on case correspondence as intended in paragraph (1), with a representation of an advocate. (3) If the take over as intended in paragraph (2) does not occur, then the opposing party is entitled to

summon the Debtor to take over the case. (4) If the Debtor does not appear, an in absentia decision may be imposed according to the Civil

Procedural Law. (5) In the event that such rebuttal is filed by a participating Creditor after the reconciliation decision

ratification in the bankruptcy obtains a permanent legal force, the case may be continued by the parties only to request the judge to resolve the case expenses.


Paragraph (1)


Sufficiently clear

Paragraph (2) What is meant by an “advocate” in this paragraph is advocate as described in Article 7. Paragraph (3) Sufficiently clear Paragraph (4) Sufficiently clear Paragraph (5) Sufficiently clear

Article 129

The Creditor whose claims are challenged is not obliged to submit more evidences to affirm such claims other than the actual evidences supposed to be submitted to the Bankrupt Debtor. Elucidation of Article 129

Sufficiently clear

. Article 130

(1) If the Creditor whose claims are challenged does not appear before the meeting, within the period of

7 (seven) days after the Creditor’s non-attending, the bailiff must notify with official letter concerning the filing of the rebuttal.

(2) In the event that the Creditor disputed the rebuttal as intended in paragraph (1), the Creditor may not use as an excuse that there were no notification in the said case.

Elucidation of Article 130 A wise Creditor is supposed to check on his own to the Clerk and Receivers concerning verification

of its claims.

Article 131

(1) The Supervisory Judge may receive with conditions the rebutted claims up to an amount stipulated by him.

(2) In the event that the ranking of the claims is being challenged, the Supervisory Judge may acknowledge such ranking with conditions. Elucidation of Article 131 Sufficiently clear

Article 132

(1) The Bankrupt Debtor is entitled to challenge the acceptance of claims either entirely or partially or to

challenge the level of claims by providing simple reasons. (2) Rebuttal as intended in paragraph (1) shall be recorded in the minutes of meeting along with its

reasons. (3) Rebuttal as intended in paragraph (2) does not block the acknowledgement of claims in the

bankruptcy.


(4) Rebuttal without any reasons or which does not address the whole claims but does not expressly state the part that is being acknowledged and challenged, will not be considered as a rebuttal.


Article 133

(1) Claims that are submitted to the Receiver after the expiry of the period as intended in Article 113 paragraph (1), provided that they are submitted by no later than 2 (two) days before the day of the verification meeting is held, shall be verified if there is a request without any objection at the meeting, either from the Receiver or from any Creditors attending the meeting.

(2) Claims submitted after the expiry of the period as intended in paragraph (1), shall not be verified. (3) The provision on time period as intended in paragraphs (1) and (2) shall not be applicable if the

Creditor domiciles outside the jurisdiction of the Republic of Indonesia which become an impediment to report the matter any sooner.

(4) In the event that the objection was filed as intended in paragraph (1) or if a dispute occurs on whether or not an impediment exists as intended in paragraph (3), the Supervisory Judge shall adopt a decision after requesting advices from the meeting.


Sufficiently clear

Article 134

(1) Verification over claims shall not be performed towards interest on debts arising after the decision of

bankruptcy declaration is pronounced, unless and only insofar as it is secured by pledge, fiduciary guarantee, security right, mortgage, or collateral right on other properties.

(2) Pro memory [?] claims verification shall be conducted towards interest which is secured by collateral right as intended in paragraph (1).

(3) If the interest concerned cannot be paid from the result of the sale of goods serving as collateral, the Creditor concerned cannot exercise his rights arising from the verification of claims.


Sufficiently clear

Article 135

Claims with cancelled conditions shall be verified for the whole amount without prejudice to the effect of the cancelled conditions if such conditions are fulfilled. Elucidation of Article 135

Sufficiently clear

Article 136

(1) Claims with postponement conditions may be verified for its value at the time the decision of the

bankruptcy declaration is pronounced. (2) In the event that the Receiver and Creditor cannot agree on the method of verification, the claims

shall be acknowledged for the entire amount. Elucidation of Article 136


Sufficiently clear

Article 137

(1) Claims that has no exact time of collection or which allows right to acquire payment periodically, shall

be verified for its value at the time the decision of bankruptcy declaration is pronounced. (2) All claims that can be collected within 1 (one) year after the date of the decision of bankruptcy

declaration is pronounced, shall be treated as claim that can be collected at the said date. (3) All claims that can be collected after 1 (one) year after the date of the decision of bankruptcy

declaration is pronounced, shall be verified for values which valid 1 (one) year after the date of the decision of bankruptcy declaration is pronounced.

(4) In calculating the claims value as intended in paragraphs (2) and (3), the following must be observed:

a. time and terms of payment installment; b. benefit that may be acquired; and c. the amount of interest if it is agreed. Elucidation of Article 137

Sufficiently clear

Article 138

The Creditor whose claims are secured with pledge, fiduciary guarantee, security right, mortgage, collateral right on other properties, or has a privileged rights on a certain goods in the bankrupt asset and can prove that a part of such claims may not be repaid in full from the sale proceeds of goods serving as collateral, may request that the rights of unsecured creditors on the part of such claims be granted to him, without prejudice to the right to be given a priority over goods that have become collateral on his claims. Elucidation of Article 138

Sufficiently clear

Article 139

(1) Claims which value is indefinite, uncertain, not stated in the currency of the Republic of Indonesia or is not stipulated at all in monetary value, shall be verified according to their estimated values in the currency of the Republic of Indonesia.

(2) The determination of claim values into the currency of the Republic of Indonesia as intended in paragraph (1) shall be made on the date of the decision of bankruptcy declaration is pronounced.

(3) The determination of claims values into the currency of the Republic of Indonesia for claims owned by the Creditor as intended in Article 55 paragraph (1) shall be conducted on the execution date of collateral goods by using Middle Exchange Rate of Bank Indonesia.


Paragraph (1) Sufficiently clear Paragraph (2) Sufficiently clear Paragraph (3) Middle Exchange Rate of Bank Indonesia shall be calculated from the Transaction Rate of

Bank Indonesia which is daily announced, with calculation:


Bank Indonesia Selling Rate + Bank Indonesia Buying Rate 2

Article 140

(1) Claims on order [?] may be verified by recording such letter without mentioning the bearer’s name or by recording the name of the bearer.

(2) Each of the claims on order [?] that is being verified without mentioning the bearer’s name as intended in paragraph (1) shall be deemed as Creditor’s own claims.


Sufficiently clear

Article 141

(1) Creditor which claims is secured by a guarantor may file a verification of claims after it is being reduce with payment accepted from the guarantor

(2) The guarantor is entitled to file a verification in an amount as much as the payment that has been paid to the Creditor.

(3) apart from the rights as intended in paragraph (2), the guarantor may accept conditionally in he verification of the amount that has not been paid by the guarantor and it is not verified by the Creditor.


Sufficiently clear

Article 142

(1) In the event that there are mutually guaranteeing Debtors and one or more Debtors is declared

bankrupt, the Creditor may submit his claims to the Debtor which has been declared bankrupt or to each of the Debtors declared bankrupt until all of their claims are paid.

(2) Each mutually guaranteeing Debtor who has rights to claim for compensation from the bankrupt asset of the other declared bankrupt Debtor, can be accepted conditionally in the verification if the Creditor does not make his own verification.

(3) If the bankrupt asset of all mutually guaranteeing Debtors exceeds 100% (one hundred percent) of the total receivables, the excess of assets shall be divided between the mutually guaranteeing Debtors according to the legal relationship among them.


Sufficiently clear

Article 143

(1) After the verification of claims is completed, the Receiver shall provide a report concerning the

bankrupt asset condition, and furthermore shall provide Creditors with all information requested by them.

(2) After the meeting is completed, the report as intended in paragraph (1) along with the minutes of claims verification meeting shall be provided in the Clerk Office and in the Receiver’s office.

(3) A fee shall be charged for obtaining copies of letters as intended in paragraph (2). (4) After the minutes of meting as intended in paragraph (2) is provided, the Receiver, Creditor, or

Bankrupt Debtor may request to the Court that such minutes of meeting is revised, if from the documents concerning Bankruptcy contained errors in the minutes of meeting.



Section Six Reconciliation

Article 144

The Bankrupt Debtor is entitled to offer a reconciliation to all Creditors. Elucidation of Article 144

Sufficiently clear

Article 145

(1) If the Bankrupt Debtor submits a composition plan and by no later than 8 (eight) days before the

claims verification meeting provide such composition plan at the Court’s Clerk Office so that it can be viewed by any persons concerned without any charge, such composition plan must be discussed and resolved immediately after the verification of claims is completed, except in cases stipulated in Article 147.

(2) At the same time with the delivery of the composition plan as intended in paragraph (1) to the Court’s Clerk Office, then a copy of the composition plan shall be delivered to each member of the temporary committee of creditors.


Sufficiently clear

Article 146

Each of the Receiver and the temporary creditors committee shall give written opinion on the composition plan at the meeting as intended in Article 145. Elucidation of Article 146

Sufficiently clear

Article 147

Discussion and resolution concerning composition plan as intended in Article 145 shall be postponed until the subsequent meeting which date shall be stipulated by the Supervisory Judge by no later than 21 (twenty one) days thereafter, in the event: a. if in the meeting a permanent creditors committee is appointed which members do not consist of the

same person as the temporary creditors committee, while to the majority of Creditors desired from the permanent creditors committee a written opinion on such proposed composition plan; or

b. the composition plan is not provided at the Court’s Clerk Office at the stipulated time, while the majority of Creditors present wishes the postponement of the meeting.


Sufficiently clear .

Article 148


In the event that the discussion and the voting concerning the composition plan as set forth in Article 147 is postponed until the next meeting, the Receiver within 7 (seven) days after the last meeting must notify all acknowledged or temporary acknowledged Creditors who were not present at the claims verification meeting with a letter containing the brief content of such composition plan. Elucidation of Article 148

Sufficiently clear Article 149

(1) The Creditors holding pledge, fiduciary guarantee, security right, mortgage, or collateral right on

other properties and the privileged Creditors, including Creditors whose priority rights that are challenged, may not issue a vote related to the composition plan, unless if they have released their rights to be prioritized for the interest of the bankrupt asset prior to the implementation of voting on such composition plan.

(2) After the release of rights as intended in paragraph (1), such Creditors become unsecured Creditors, even if such composition plan is not accepted.


Sufficiently clear

Article 150

The Bankrupt Debtor is entitled to give information concerning the composition plan and to defend and change such composition plan during the negotiation. Elucidation of Article 150 Sufficiently clear

Article 151

The composition plan shall be accepted if it is approved in the creditors meeting by more than 1/2 (one-half) of the total unsecured creditors present in the meeting and whose right are acknowledged or temporarily acknowledged, representing no less than 2/3 (two-third) of the total unsecured claims of acknowledged or temporarily acknowledged unsecured creditors or their proxies present in the aforementioned meeting. Elucidation of Article 151

“Approved” shall mean the approval of the attending Creditors who firmly stated so in the said Creditor’s Meeting. In the event the attending Creditors did not use their right to vote, their vote will count as disagree vote as intended in Article 87 paragraph (2).

Article 152

(1) In the event that more than 1/2 (one-half) of the creditors present in the creditors meeting and representing no less than 1/2 (one-half) of the total claims of the creditors having voting right agree to accept the composition plan, the second voting shall be conducted within 8 (eight) days following the first voting, without requiring summons.

(2) In the second voting, the creditors shall not be bound to the vote they cast in the first voting. Elucidation of Article 152

Sufficiently clear

Article 153


Later changes, either regarding the number of creditors and the amount of claims, shall have no effect to the validity of the acceptance or rejection of the composition plan. Elucidation of Article 153

Sufficiently clear

Article 154

(1) The minutes of the meeting shall include the following matters: a. the content of the composition plan; b. the names of creditors present and entitled to cast votes and to appear; c. the vote cast; d. the result of the voting; and e. all matters took place in the meeting. (2) The minutes of the meeting shall be signed by the Supervisory Judge and the substitute Clerk. (3) Any person having interests can freely inspect the minutes of the meeting as intended in paragraph

(1) made available by no later than 7 (seven) days following the adjournment of the meeting at the Court’s Clerk Office.

(4) A fee shall be charged for obtaining copies of the minutes of meeting as intended in paragraph (3). Elucidation of Article 154

Sufficiently clear

Article 155

Creditors who have voted in favor of the composition plan or the Bankrupt Debtor may request the Court to make correction to the minutes of meeting within 8 (eight) days following the availability of the minutes of meeting as intended in Article 154 paragraph (3), if from the documents concerning the composition plan meeting it is found that the Supervisory Judge has incorrectly deemed the aforementioned composition as being rejected. Elucidation of Article 155

Sufficiently clear

Article 156

(1) In the event that the composition plan is accepted, prior to the adjournment of the meeting, the Supervisory Judge shall stipulate the day for a Court hearing where the Court will decide whether or not the aforementioned composition plan will be ratified.

(2) In the event of mistakes as intended in Article 155, the determination of the hearing day shall be conducted by the Court and the Receiver shall notify the Creditors of the determination of the hearing day by mail.

(3) The Court hearing shall be conducted at the earliest 8 (eight) days and at the latest 14 (fourteen) days after the acceptance of the composition plan in the voting meeting or after the issuance of Court decision in the event of mistakes as intended in Article 155.


Sufficiently clear

Article 157


During the session, creditors are allowed to submit reasons to the Supervisory Judge which cause them to want the rejection of the composition plan ratification. Elucidation of Article 157

Sufficiently clear

Article 158

(1) On the stipulated day, the Supervisory Judge shall give a written report in a public hearing, while the creditors, either themselves or their proxies, can explain the reasons which cause them to want or reject the ratification of the composition plan.

(2) The Bankrupt Debtor shall be entitled to convey his reasons to defend his interests. Elucidation of Article 158

Sufficiently clear

Article 159

(1) In the session as intended in Article 154 or by no later than 7 (seven) days following the date of the aforementioned session, the Court must render decision along with the reasons.

(2) The Court must reject the ratification of the composition in the following events: a. the Debtor’s assets, including any goods on which rights of withholding goods are exercised,

are considerably larger than the amount agreed in the composition plan; b. the implementation of the composition is not sufficiently guaranteed; and/or c. the composition is reached based on fraud, or conspiracy with one or more creditors, or due

to any other dishonest efforts and without taking into account whether the Debtor or other parties have cooperated to achieve this matter.


Sufficiently clear

Article 160

(1) In the event that the ratification is rejected, both the creditors approving the composition and the Bankrupt Debtor may file an appeal within 8 (eight) days following the announcement of the Court decision.

(2) In the event that the ratification of the composition is granted, within 8 (eight) days following the date of the announcement of the aforementioned ratification, an appeal can be filed by: a. the creditors who voted against the composition or who were absent at the voting;

b. the creditors who voted in favour of the composition after having knowledge that the aforementioned composition has been reached based on the reasons as intended in Article 159 paragraph (2) letter c.


Sufficiently clear

Article 161

(1) An appeal against the Court decision as intended in Article 160 shall be conducted in accordance with the provisions as intended in Article 11, Article 12 and Article 13.


(2) The provisions as intended in Article 158 except provisions regarding the Supervisory Judge, and Article 159 paragraph (1), shall also be applicable in the appeal examination as intended in paragraph (1).


Sufficiently clear

Article 162

Ratified composition shall be applicable for all creditors who have no priority rights, without any exception, by not taking into account whether or not they have submitted themselves in the bankruptcy. Elucidation of Article 162

Sufficiently clear

Article 163

In the event that the composition or ratification is rejected, the Bankrupt Debtor can no longer offer composition over the said bankruptcy. Elucidation of Article 163

Sufficiently clear

Article 164

Decision regarding composition ratification which has obtained a permanent legal force shall form an enforceable legal basis which can be executed against the debtor and all persons guaranteeing the implementation of the composition in connection with the acknowledged claims insofar they are not denied by the Bankrupt Debtor according to Article 132 as included in the minutes of the claims verification meeting. Elucidation of Article 164

Sufficiently clear

Article 165

(1) Even though there has been a composition, the Creditors shall retain their rights against the

guarantors and among the Debtors. (2) The Creditors’ rights on the assets of the third parties remain owned by the Creditors, as if there has

been no composition. Elucidation of Article 165

Sufficiently clear

Article 166

(1) In the event that the ratification of the composition has obtained a permanent legal force, the bankruptcy shall cease.

(2) The Receiver shall announce the composition as intended in paragraph (1) in the State Gazette and in at least 2 (two) daily newspapers as intended in Article 15 paragraph (4).



Sufficiently clear

Article 167

(1) After the ratification of the composition has obtained a permanent legal force, the Receiver shall conduct an accountability report to the Debtor before the Supervisory Judge.

(2) In the event that the composition does not stipulate otherwise, the Receiver shall return to the Debtor all goods, money, books and documents included in the bankruptcy assets by receiving a legal receipt.


Sufficiently clear

Article 168

(1) The amount of monies which are the right of the Creditors which has been verified and acknowledged based on the privileged rights, as well as the bankruptcy expenses must be delivered directly to the Receiver, unless the debtor has given guarantee for it.

(2) Insofar as the obligation as intended in paragraph (1) has not been fulfilled, the Receiver must withhold all goods and monies included as the bankruptcy assets.

(3) In the event that after the lapse of 30 (thirty) days following the date of the composition ratification decision obtains a permanent legal force and the Debtor does not fulfill his obligation as intended in paragraph (1), the Receiver must make full payment from the available bankruptcy assets.

(4) The amount of monies as intended in paragraph (1) and the portion which must be distributed to each of the Creditors by virtue of their privileged rights shall be stipulated by the Supervisory Judge, if necessary.


Paragraph (1) Sufficiently clear

Paragraph (2)

Sufficiently clear Paragraph (3)


Stipulation by the Supervisory Judge is necessary if the Debtor, Receiver and Creditors fail to reach into a consensus on the distribution.

Article 169

In the event that claims which privileged rights are conditionally acknowledged, the obligation as intended in Article 168 shall be limited to the granting of guarantee and in the event that the aforementioned grant of guarantee is not fulfilled, the Receiver shall only be obligated to provide a reserved amount from the bankruptcy assets in the amount of the aforementioned privileged right. Elucidation of Article 169

Sufficiently clear

Article 170


(1) Creditors may ask for the cancellation of a ratified composition if the Debtor fails to fulfill the content

of such composition. (2) The Debtor must prove that he has fulfilled the composition. (3) The Court shall have the authority to grant alleviation to the Debtor to fulfill his obligation by no later

than 30 (thirty) days after the announcement of the decision for granting such alleviation. Elucidation of Article 170


Paragraph (2)


Alleviation can only be given 1 (one) time in the entire process

Article 171

A claim to cancel the composition must be submitted and stipulated in the same manner as stipulated in Article 7, Article 8, Article 9, Article 11, Article 12 and Article 13 for application of bankruptcy declaration. Elucidation of Article 171

Sufficiently clear

Article 172

(1) In the decision that cancels such composition, an order to re-open the bankruptcy is included, with an appointment of a Supervisory Judge, Receiver, and members of the creditors committee, if in the previous bankruptcy has formed such committee intended.

(2) The Supervisory Judge, Receiver, and members of the committee as intended in paragraph (1) to the farthest possible extent shall be appointed from those who previously have hold their position in the aforementioned bankruptcy.

(3) The Receiver must inform and announce the decision as intended in paragraph (1) in the manner as intended in Article 15 paragraph (4).


Sufficiently clear

Article 173

(1) In the event that the bankruptcy is re-opened, the provisions of Article 17 paragraph (1), Article 19, Article 20, Article 21, Article 22, and the articles in the Parts Two, Three and Four in Chapter II of this Law shall be applicable.

(2) The provisions regarding claims verification shall also be applicable, limited to the claims not yet verified.

(3) Creditors whose claims have been verified must also be summoned to attend the claims verification meeting and shall be entitled to deny claims which acceptance is requested.


Sufficiently clear


Article 174

Without prejudice to the application of Article 41, Article 42, Article 43 and Article 44, if there are reasons to do so, all actions conducted by the Debtor within the time between the ratification of the composition and the reopening of the bankruptcy shall be binding to the bankruptcy assets. Elucidation of Article 174

Sufficiently clear

Article 175

(1) Following the re-opening of the bankruptcy, composition can no longer be offered. (2) The Receiver must forthwith start with the settlement of the bankruptcy assets. Elucidation of Article 175

Sufficiently clear

Article 176

In the event of the re-opening of a bankruptcy, the bankruptcy assets shall be distributed among the Creditors in the following manner: a. if the old Creditors and new Creditors have not received payments, the results of the bankruptcy

assets liquidation shall be divided pro-rata among them; b. if the payments have been partly conducted to the old Creditors, the old Creditors and the new

Creditors shall be entitled to receive payments in accordance with the percentage already agreed upon in the composition;

c. the old Creditors and the new Creditors shall be entitled to obtain payments pro-rata upon the remaining of the bankruptcy assets after being deducted with the payments as intended by letter b until the fulfillment of all acknowledged claims;

d. the old Creditors having obtained payments shall not be obligated to return the payments they have already received.

Elucidation of Article 176:

Point a “Pro rata” means payment in accordance to the respective amount of claims.

Point b “Partly” means whichever parts

Point c Sufficiently clear

Point d Sufficiently clear

Article 177

The provisions as intended in Article 176 shall be applicable mutatis mutandis in the event that the Debtor is once again declared bankrupt while at the time the party concerned has not fulfilled all obligations in the composition. Elucidation of Article 177

Sufficiently clear

Part Seven


Settlement of the Bankruptcy Assets

Article 178

(1) In the event that a composition plan is not offered in the claims verification meeting, the offered composition is rejected, or the ratification of composition is rejected based on the decision having obtained permanent legal force, the bankruptcy assets shall be in an insolvent condition by law.

(2) The provisions as intended in Article 104 and Article 106 shall not be applicable, if there have been a certainty that the company of the Bankrupt Debtor will not be continued by virtue of the following articles or if the continuation of the aforementioned business shall be terminated.


See Elucidation of Article 57 paragraph (1)

Article 179

(1) In the event that composition plan is not offered in the claims verification meeting or if the offered composition plan is rejected, the Receiver or the Creditors attending the meeting can propose that the company of the Bankrupt Debtors be continued.

(2) In the event that there is a creditors committee and the proposal is submitted by the Creditors, the creditors committee and the Receiver must give their advice regarding the aforementioned proposal.

(3) Upon the request of the Receiver or one of the Creditors attending the meeting, the Supervisory Judge shall delay the discussion and decision making on the proposal, until a meeting stipulated by no later than 14 (fourteen) days after the meeting.

(4) The Receiver must forthwith notify the Creditors not attending the meeting regarding the plan to hold another meeting by mail containing such proposal and reminding them about the provisions as intended in Article 119.

(5) In the meeting as intended in paragraph (4), a verification of claims submitted after the end of the time frame mentioned in Article 113 paragraph (1) and have not been verified by virtue of Article 133 can also be conducted, if necessary.

(6) Against the claim as intended in paragraph (5), the Receiver must act as in accordance with Article 116, Article 117, Article 118, and Article 119.


Sufficiently clear

Article 180

(1) The proposal to continue the company as intended in Article 179 paragraph (1) must be accepted if such proposal is approved by creditors representing more than 1/2 (one-half) of the total claims which are acknowledged and provisionally accepted, which are not guaranteed with pledge right, fiduciary guarantee, security right, mortgage, or other property collateral right.

(2) In the event that there is no creditors committee, the provisions as intended in Article 80 shall be applicable.

(3) Minutes of the meeting must include the names of creditors attending the meeting, vote cast by each creditor, the results of the voting, and all matters took place in such meeting.

(4) All persons having interests can freely inspect the minutes of the meeting as intended in paragraph (3) which shall be made available by no later than 7 (seven) days following the adjournment of the meeting at the Court’s Clerk Office.


Sufficiently clear


Article 181

(1) In the event that within 8 (eight) days after the decision of composition ratification rejection obtains a permanent legal force, the Receiver and Creditors submit a proposal to the Supervisory Judge to continue the company of the Bankrupt Debtor, the Supervisory Judge must hold a meeting by no later than 14 (fourteen) days after such proposal is submitted to the Supervisory Judge.

(2) The Receiver must invite creditors, by no later than 10 (ten) days prior to the meeting with letters stating the proposal and reminding the Creditors on the provision as intended in Article 119.

(3) The Receiver must advertise the same summons in 2 (two) newspapers, as intended in Article 15 paragraph (4).

(4) The provisions as intended in Article 179 paragraphs (2), (5), and (6) and Article 180 shall also be applicable.


Sufficiently clear

Article 182

Within 8 (eight) days after the adjournment of the meeting, if from the documents it is found that the Supervisory Judge has incorrectly deemed the proposal has been rejected or accepted, the Receiver and Creditors can ask the Court to once more declare that such proposal has been accepted or rejected. Elucidation of Article 182

Sufficiently clear

Article 183

(1) Upon the request of the Creditors or the Receiver, the Supervisory Judge can order that the continuation of the company shall be terminated.

(2) In the event that there is a request as intended in paragraph (1), the creditors committee, if any, must be heard and the Receiver must also be heard if such proposal is not submitted by the Receiver.

(3) The Supervisory Judge can also hear the Creditors and the Bankrupt Debtor. Elucidation of Article 183

Sufficiently clear

Article 184

(1) With due observance of the provisions in Article 15 paragraph (1), the Receiver must start the settlement and sell all bankruptcy assets without necessarily to obtain approval or assistance from the Debtor, in the following events: a. proposal to manage the Debtor’s company is not submitted within the time frame as

regulated herein, or such proposal has been submitted but rejected; or b. the management of the Debtor’s company is dismissed. (2) In the event that the company is continued, the sale of assets included in the bankruptcy assets

which are not required for the continuation of the company can be conducted. (3) The Bankrupt Debtor can be granted a few house furniture and its equipment, medical equipment

used for health or office furniture stipulated by the Supervisory Judge. Elucidation of Article 184

Sufficiently clear


Article 185

(1) All assets must be sold in public in accordance with the method stipulated in the regulations (2) In the event that the sale in public is achieved, the sale can also be conducted in private with the

permission of the Supervisory Judge. (3) With the approval of the Supervisory Judge, the Receiver shall decide the measures which must be

taken on all assets which are not forthwith or cannot be settled at all. (4) The Receiver shall be obligated to pay the claims of the Creditors having the right to retain assets,

so that the assets can be returned and advantageous for the bankruptcy assets. Elucidation of Article 185

Sufficiently clear

Article 186

For the interest of the settlement of the bankruptcy assets, the Receiver may use the service of the Bankrupt Debtor with compensation determined by the Supervisory Judge. Elucidation of Article 186

Sufficiently clear

Article 187

(1) After the bankruptcy assets are in insolvent condition, the Supervisory Judge may convene a

Creditors’ meeting on the day, hour and venue determined by him to necessarily hear the Creditors regarding the manner of the bankruptcy assets settlement and if necessary to verify claims which will be included after the end of the time frame as intended in Article 113 paragraph (1), and have not been verified as intended in Article 133.

(2) Against the claims as intended in paragraph (1), the Receiver shall be obligated to act as intended in

Article 116, Article 117, Article 118, Article 119 and Article 120. (3) The Receiver must announce the same summons in newspapers as intended in Article 15 paragraph

(4). (4) The Supervisory Judge must stipulate the minimum time frame of 14 (fourteen) days between the

day of the summons and the day of the meeting. Elucidation of Article 187

Sufficiently clear

Article 188

If the Supervisory Judge is of the opinion that there is sufficient cash money, the curator shall be ordered to conduct distribution to the verified creditors. Elucidation of Article 188:

Sufficiently Clear

Article 189


(1) The curator must prepare a distribution list to be approved by the Supervisory Judge. (2) The list as intended by paragraph (1) shall include details of revenues and expenditures including the

curator’s salary, the creditors’ names, the verified amount of each account receivable, and the portion which must be received by the creditors.

(3) Concurrent creditors must be granted with the portion stipulated by the Supervisory Judge. (4) Payments to creditors:

a. having privileged right, including those whose privileged rights are denied; and b. the holders of pledge, fiduciary transfer, pledge right, mortgage or other property collateral

right, if they have not been paid in accordance with the provisions as intended by Article 55, can be conducted from the results of the sale of assets to which the have privileged rights or encumbered to them.

(5) In the event that the result of the assets sale as intended by paragraph (4) are not sufficient for paying all account receivable of the prioritized creditors, they shall be positioned as concurrent creditors for the shortfall thereof.


Sufficiently Clear

Article 190

The amount of the portion for creditors whose account receivable are conditionally accepted in the distribution list shall be calculated based on the percentage of the entire amount of account receivable. Elucidation of Article 190:

Sufficiently Clear

Article 191

All bankruptcy expenses shall be charged on every assets which are parts of the bankruptcy assets, except the assets which according to the provisions as intended by Article 55 have been personally sold by creditors holding pledge, fiduciary transfer, pledge right, mortgage or other property collateral right. Elucidation of Article 191:

Sufficiently Clear

Article 192

(1) The distribution list approved by the Supervisory Judge must be provided at the Office of the Court Clerk, while one copy of the aforementioned list must be provided at the curator’s office, so that they can be perused by creditors during the time frame stipulated by the Supervisory Judge when the aforementioned list is approved.

(2) The provision of the distribution list and the time frame as intended by paragraph (1) shall be announced by the curator in newspapers as intended by Article 14 paragraph (4).

(3) The time frame as intended by paragraph (1) shall come into effect on the day and date when the provision of the aforementioned distribution list is announced in newspapers as intended by paragraph (2).


Sufficiently Clear

Article 193


(1) During the time frame as intended by Article 192 paragraph (1), creditors may resist against the aforementioned distribution list by submitting a letter of objection along with the reasons thereof to the Court Clerk, by receiving a proper receipt.

(2) The letter of objection as intended by paragraph (1) shall be enclosed to the distribution list. Elucidation of Article 193:

Sufficiently Clear

Article 194

(1) In the event of a resistance, forthwith following the end of the time frame as intended by Article 192, the Supervisory Judge shall stipulate the day to examine the aforementioned resistance in a session open for public.

(2) Decision of session day issued by the Supervisory Judge shall be provided at the Office of the Court Clerk and the copy thereof at the curator’s office, so that it can be perused by any person free of charge.

(3) The impound officer must notify the aforementioned provision in writing to the resistor and the curator.

(4) The session must be stipulated by no later than 7 (seven) days following the end of the time frame stipulated by virtue of article 192 paragraph (3).

(5) In the open session as intended by paragraph (4), the Supervisory Judge shall give a written report, while the curator and every creditors or their proxies may support or deny the aforementioned distribution list by conveying the reasons thereof.

(6) On the first session day or not later than 7 (seven) days later, the Court must grant decision along with sufficient legal considerations.

Elucidation of Article 194 Sufficiently Clear

Article 195

(1) Creditors whose account receivable have not been verified and creditors whose account receivable have been verified for a very small amount according to their own report, may file resistance with the provision that by no later than 2 (two) days prior to the resistance examination in a Court session:

a. the account receivable or a portion of the account receivable which are not yet verified shall be submitted to the curator;

b. copies of the account receivable and the receipt from the curator shall be attached to the letter of resistance;

c. application for verifying the aforementioned account receivable or a portion of the account receivable shall also be submitted in the aforementioned resistance.

(2) The verification as intended by paragraph (1) conducted in the aforementioned session with the stipulated method as intended by Article 120 and the succeeding articles shall be conducted before the resistance examination is started.

.(3) In the event that the resistance is intended only to have the resistor’s account receivable verified, and there is no resistance submitted by other person, the fee of the aforementioned resistance must be borne by the aforementioned creditor filing resistance.

Elucidation of Article 195: Sufficiently Clear

Article 196

(1) The curator and any creditor can appeal to the Supreme Court against the Court decision as

intended by Article 191 paragraph (6).


(2) The appeal against Court decision as intended by paragraph (1) shall be organized in accordance with the provisions as intended by Article 11, Article 12 and Article 13.

(3) For the purpose of the examination on the appeal, the Supreme Court can summon the curator or the creditor to be heard.

(4) The distribution list shall be binding due to the lapse of the time frame as intended by Article 192, without any party filing resistance or resistance which have been overruled by the Court of Law.


Sufficiently Clear

Article 197

The Supervisory Judge must order the deletion of the recording of mortgage, pledge right or fiduciary transfer encumbering the assets included in the bankruptcy assets, soon after the distribution list containing the accountability of the sale of encumbered assets becomes binding. Elucidation of Article 197:

Sufficiently Clear

Article 198

(1) Distribution allocated for creditors whose account receivable are temporarily acknowledged shall not be granted insofar as there has not been any decision regarding their account receivable which has become final and binding.

(2) In the event that the creditors are proven not to have any account receivable or their account receivable are less than the same allocated for them, the money which previously allocated for them, both entirely or partly, shall become the benefit of the other creditors.

(3) In the event that the portions allocated for creditors, whose priority rights are denied, exceed the percentage of the portion which must be paid to the concurrent creditors, the aforementioned portions must temporarily reserved until there is a decision regarding the aforementioned priority rights.


Sufficiently Clear

Article 199

In the event that an asset having certain priority right, fiduciary transfer, pledge right, mortgage, or other property collateral right, is sold after the aforementioned prioritized creditors have obtained the distribution as intended by Article 184 in connection with Article 189 , at the time of any subsequent distribution, the results of the aforementioned sale of asset shall be paid to them in the maximum amount of the value of the prioritized rights after being deducted with the amount which has been received previously. Elucidation of Article 199:

Sufficiently Clear

Article 200

(1) Creditors, whose due to their fault verify after the distribution, may obtain payment of a certain amount deducted from the existing money, equal to the amount which have been received by other acknowledged creditors.

(2) In the event that the creditors have prioritized right, they shall lose the aforementioned right upon the proceeds of the sale of assets concerned, in the distribution list which have been previously allocated for other creditors by prioritizing them.



Sufficiently Clear

Article 201

After the end of the time frame for inspecting the distribution list as intended by Article 192, or in the event of the submission of resistance after the announcement of the decision of the aforementioned resistance case, the curator must forthwith pay the allocated distribution. Elucidation of Article 201:

Sufficiently Clear

Article 202

(1) Immediately after the account receivable of the verified creditors have been fully paid, or immediately after the closing distribution list becomes binding, the bankruptcy shall be terminated, without prejudice to the provision as intended by Article 203.

(2) the curator shall announce the termination of the bankruptcy as intended by Article 15 paragraph (4). (3) The curator must present accountability regarding the management and settlement conducted by

him to the Supervisory Judge by no later than 30 (thirty) days following the termination of bankruptcy. (4) All books and documents regarding the bankruptcy assets existing at the curator must be delivered

to the debtor by obtaining proper receipt. Elucidation of Article 202:

Sufficiently Clear

Article 203

In the event that after the closing distribution is made, the distribution, which was previously reserved as intended by Article 198 paragraph (3), is returned to the bankruptcy assets, or if in fact there is a property from the bankruptcy assets, which at the time of settlement was unknown, upon the order of the Court, the curator shall settle and distribute it based on the previous distribution list. Elucidation of Article 203:

Sufficiently Clear

Part Eight Legal Status of the Bankrupt Debtor After the End of the Settlement

Article 204

After the closing distribution list has become binding, creditors shall receive the execution right upon the debtor’s assets concerning their unpaid account receivable. Elucidation of Article 204:

Sufficiently Clear

Article 205

(1) Acknowledgment of an account receivable as intended by Article 126 paragraph (5) shall be legally binding against the debtor.

(2) Excerpt from the minutes of the account receivable verification meeting drawn up in the form of executable decision shall be the legal basis of the right executable to the debtor regarding acknowledged account receivable.



Paragraph (1) Sufficiently Clear

Paragraph (2)

“drawn up in the form of executable decisions” means summary of the minutes of meeting which has executorial title.

Article 206

The provisions as intended by Article 205 shall not be applicable insofar as the account receivable concerned are denied by the bankrupt debtor as intended by Article 131. Elucidation of Article 206:

Sufficiently Clear

Part Nine Bankruptcy of Inheritance

Article 207

Inheritance of a deceased person must be declared in bankruptcy, if one or more creditors file an application for such purpose and can briefly prove that: a. the deceased did not pay his debts during his life; or b. at the time the person concerned passed away, his inheritance was not sufficient to pay his debts. Elucidation of Article 207:

Sufficiently Clear

Article 208

(1) Application as intended by Article 207 must be submitted to the Court which jurisdiction covers the most recent domicile of the deceased debtor.

(2) The beneficiaries must be summoned with the letters of the impound officer to be heard regarding the aforementioned application.

(3) The summons as intended by paragraph (2) must be delivered to the last domicile of the deceased debtor, without any obligation to mention the names of the respective beneficiaries, unless their names are known.


Sufficiently Clear

Article 209

A bankruptcy decision shall by law cause the separation of the properties of the deceased person from the properties of his beneficiaries. Elucidation of Article 209:

Sufficiently Clear

Article 210

Application for a bankruptcy declaration must be submitted to the Court by no later than 90 (ninety) calendar days after the debtor passes away.


Elucidation of Article 210: Sufficiently Clear

Article 211

The provisions regarding composition as intended by Article 144 up to and including Article 177 shall not be applicable to the bankruptcy of inheritance, unless the inheritance have been received entirely by the beneficiaries Elucidation of Article 211:

Sufficiently Clear

Part Ten Provisions of International Law

Article 212

Creditors, who after the declaration of bankruptcy take the payment of the entire or a portion of their account receivable from the properties included in the bankruptcy assets located outside the territory of the Republic of Indonesia which are not bound to them with priority right, must indemnify all matters they have obtained to the bankruptcy assets. Elucidation of Article 212:

Sufficiently Clear

Article 213

(1) Creditors transferring all or a portion of their account receivable on the bankrupt debtor to the third parties, with the intention that the third parties take the prioritized payments upon all or a portion of their account receivable from the properties included in the bankruptcy assets located outside the Indonesian territory must indemnify all matters they have obtained to the bankruptcy assets.

(2) Unless proven otherwise, all transfers of account receivable must be deemed as to have been conducted with the provisions as intended by paragraph (1), if such transfers are conducted by creditors and the aforementioned creditors are aware that bankruptcy declaration have been or will be filed.


Paragraph (1) Obligation to transfer over the bankrupt assets is in the amount of the payment submitted by the creditors who receives the transfer of account receivables over the debtor’s assets located abroad.

Paragraph 2

Sufficiently Clear

Article 214

(1) Any person transferring all or a portion of his account receivable or debts to third parties, which accordingly obtain the opportunity to conduct debt set off outside the Indonesian territory not allowed by this law, must indemnify to the bankruptcy assets.

(2) Article 213 paragraph (2) shall also be applicable to the matter as intended by paragraph (1). Elucidation of Article 214

Paragraph (1)


Obligation to transfer over the bankrupt assets is in the amount of the claims met and acquired by the receiver of the debt or transfer of account receivables over the debtor’s assets located abroad

Paragraph (2)

Sufficiently Clear

Part Eleven Rehabilitation

Article 215

After the termination of bankruptcy as intended by Article 166, Article 202 and Article 207, the debtor or his beneficiaries shall be entitled to apply for rehabilitation to the Court of Law issuing the bankruptcy declaration. Elucidation of Article 215

“rehabilitation” is restoring Debtor’s name from bankrupt, by a Court decision stated the Debtor has fulfilled its obligations.

Article 216

Petition for rehabilitation by the debtor or his beneficiaries shall not be granted, unless the petition is attached with evidence stating that all acknowledged creditors have received satisfactory payments. Elucidation of Article 216

“satisfactory payments” means acknowledged Creditors will not conduct any more claim against debtor even when they don’t receive their entire amount.

Article 217

Petition for rehabilitation as intended by Article 216 must be announced in 2 (two) daily newspapers appointed by the Court. Elucidation of Article 217:

Sufficiently Clear:

Article 218

(1) Within 60 (sixty) days after the announcement of the rehabilitation application in 2 (two) daily newspapers, any acknowledged creditor may submit objection to the aforementioned application by submitting letter of objection along with the reasons thereof to the Office of the Court Clerk and the Clerk must give proper receipt.

(2) Objection as intended by paragraph (1) can only be submitted if the requirements as intended by Article 216 are not fulfilled.


Sufficiently Clear:

Article 219

After the lapse of the 60 (sixty) days time frame as intended by Article 218, despite whether or not objections are submitted, the Court must grant or reject the aforementioned petition. Elucidation of Article 219:

Sufficiently Clear:


Article 220

There shall be no opportunity for any legal action whatsoever against the Court decision as intended by Article 219. Elucidation of Article 220:

Sufficiently Clear:

Article 221

Decision granting the rehabilitation shall be announced in a session open for public and the aforementioned decision must be recorded in the registry as intended by Article 20. Elucidation of Article 221:

Sufficiently Clear:

Chapter III SUSPENSION OF OBLIGATIONS FOR PAYMENT OF DEBT

FIRST SECTION

Suspension of Payment and its Consequences

Article 222

(1) Suspension of obligations for payment of debt is submitted by the Debtor with more than 1 (one) Creditor or by the Creditor.

(2) A debtor who cannot and foresees that he will be unable to continue to pay his debts which are due and payable, may apply for a suspension of obligation for payment of debt, for the purposes of submitting a composition plan which includes an offer of payment of all or a part of the debt to the unsecured creditors.

(3) A Creditor who foresees that the debtor will be unable to continue to pay his debts which are due and payable, may apply that the debtor be granted a suspension of obligation for payment of debt, for the purposes of submitting a composition plan which includes an offer of payment of all or a part of the debt to the unsecured creditors.



Paragraph (2)

“creditor” means all creditor, namely concurrent creditor and privileged creditors. Paragraph (3)

Sufficiently clear

Article 223

In the case that the debtor is a Bank, Security Company, Clearing and Securitization House, Storing and Settlement House, Insurance Company, Reinsurance Company, Pension Fund, and State Owned Company which business is public interest, suspension of obligations for payment of debt can only by filed by institutions as intended by the provisions on Article 2 paragraph (3), (4), and (5). Elucidation of Article 223

See elucidation of Article 2 Paragraph (3), (4) and (5).


Article 224

(1) the petition for suspension of obligations for payment as intended by Article 222 shall be submitted to the Court as intended by Article 3 signed by the petitioner and his attorney.

(2) In the case that the petitioner is the debtor, the petition for suspension of obligations for payment must be accompanied by a list that stated the nature of debt, total of debt and the Debtor's debt together with written evidence as appropriate.

(3) In the case that the petitioner is the creditor, the Court shall call the debtor through the debt collector by registered express mail within 7 (seven) days before the court date.

(4) On the trial as intended in paragraph 3, the Debtor shall submit a list that stated the nature of debt, total of debt and the Debtor's debt together with written evidence as appropriate and, if any, composition plan.

(5) A composition plan as intended by paragraph 2 may be appended to the above mentioned petition. (6) The provisions as intended by Article 6 paragraph (1), (2), (3) (4) and (5) shall (7) Apply mutatis mutandis as procedures for submission of a petition for suspension of obligation for

payment of debt as intended by paragraph (1). Elucidation of Article 224

In the event that the debtor is a limited company then the petition of suspension of obligation for payment of debt on their own initiative can only take place after obtaining consent of the Shareholders meeting with quorum attendee and the validity of the decision in the same as required to bankruptcy petition.

Article 225

(1) the petition as intended by Article 224 paragraph (1) together with its exhibits, if any, shall be filed

with the office of the Clerk, so that it may be inspected without charge by the public. (2) In the case that the petitioner is the Debtor, the court shall grant a provisional suspension of

obligations for payment of debt within at least 3 (three) days after the date of the registration of the petition as intended in Article 224 paragraph 1 (one) and shall designate a Supervisory Judge from the judges of the Court and shall appoint 1 (one) or more administrators who together with the debtor shall manage the estate of the debtor.

(3) In the case that the petitioner is the Creditor, the court shall grant a provisional suspension of obligations for payment of debt within at least 20 (twenty) days after the date of the registration of the petition and shall designate a Supervisory Judge from the judges of the Court and shall appoint 1 (one) or more administrators who together with the debtor shall manage the estate of the debtor.

(4) Immediately after the decision provisionally suspending obligations for payment of debt has been announce, the Court through the administrator shall be obliged to summon the debtor and the known creditors by registered letter or by courier to appear at a session to be held at the latest on the 45 (forty fifth) day counted from the granting of the decision provisionally suspending obligations for payment of debt.

(5) In the case that the debtor failed to appear at the Court session as intended in paragraph (4), the provisional suspension of obligation for payment of debt is terminated and the Court shall declare bankruptcy against the Debtor on the same session.


Sufficiently Clear

Article 226 (1) The administrator shall be obliged to immediately announce the decision provisionally suspending

obligations for payment of debt in the State Gazette and 1 (one) or more daily newspaper designated by the Supervisory Judge and such announcement shall also contain and invitation to attend at the session which constitutes the next judges deliberation meeting the date, place and time of said session, the name of the Supervisory Judge and the name and address of the administrator.


(2) If a composition plan has been submitted by the debtor during the announcement of the decision provisionally suspending obligations for payment of debt , this fact shall be stated in said announcement and such announcement shall be made at least 21 (twenty one) days before the date of the planned session.

Elucidation of article 226

Sufficiently Clear

Article 227

The decision provisionally suspending obligations for payment of debt shall be effective from the date of said decision provisionally suspending obligations for payment of debt is rendered an shall continue until the date the session intended by Article 226 paragraph (1) is held.


Sufficiently Clear

Article 228

(1) on the day of the session as intended in Article 226 paragraph (1) the Court shall hear the debtor, the Supervisory Judge, the administrator and the attending creditors their representative or their attorneys who are appointed by powers of attorney.

(2) Every Creditors shall be entitled to attend said session as intended by paragraph (1), even though the creditor concerned did not receive a summons to the session.

(3) If a composition plan is appended to the petition for provisional suspension of obligation for payment of debt as intended by Article 224 paragraph (2) or has been delivered by the debtor before the session, a vote may be taken on the composition plan if the provisions as intended in Article 267 have been met.

(4) Where the provisions as intended by paragraph (3) have not been met or if the unsecured creditors are not yet able to cast their votes on the composition plan, then said creditors shall cast votes on the petition of the debtor to be granted a permanent suspension of obligations for payment of debt with the intention to enable the debtor the administrator and such creditors to consider and approve a composition at a subsequent meeting or session.

(5) If a permanent suspension of obligations for payment of debt can not be decided by the Court as intended by paragraph (4) within the intended time as intended by Article 225 paragraph (4) then the debtor is declared bankruptcy.

(6) If the permanent suspension of obligations for payment of debt as intended by paragraph (4) is approved, said suspension and extension thereof may not exceed 270 (two hundred seventy) days from the announcement of the decision provisionally suspending obligations for payment of debt.


Paragraph (1) “Attorney” means is not the same as in Article 7.

Paragraph (2)


Sufficiently Clear Paragraph (4) “Creditors” means concurrent creditors, separatist creditors, or other privileged creditors.

Paragraph (5)

Sufficiently clear


Paragraph (6) Concurrent Creditor is the only one owning the right to decide whether the debtor will be granted Suspension obligations for payment of debt, the Court only has the jurisdiction to stipulate it on the basis of concurrent creditors’ agreement.

Article 229

(1) The Court decides on the granting of permanent suspension of obligations for payment of debt

including its renewal based on: a. consent of over than 1/2 (half) of the number of attending concurrent creditor with

acknowledged or provisionally acknowledged right and representing at least 2/3 (two third) of the entire outstanding claims acknowledged or provisionally acknowledged of the concurrent creditors or their attorney who are attending the session; and

b. consent of over than 1/2 (half) of the number of attending creditor whose loans are secured with acknowledged or provisionally acknowledged right and representing at least 2/3 (two third) of the entire outstanding claims acknowledged or provisionally acknowledged of the concurrent creditors or their attorney who are attending the session

(2) Any arising dispute between the administrator and concurrent creditor regarding the Creditor's right to vote as intended in paragraph 1 point a will be decided by the Supervisory Judge.

(3) If the bankruptcy petition and the petition for suspension of obligations for payment of debt are concurrently examined, then the petition for suspension of obligations for payment of debt must be decided first.

(4) Petition for suspension of obligations for payment of debt submitted after the bankruptcy petition must be decided first as intended in paragraph (3), shall be submitted on the first trial of the bankruptcy examination session.


Sufficiently clear

Article 230 (1) If the temporary suspension of obligations for payment of debt is terminated because the creditors do

not agree to the granting of a permanent suspension of obligations for payment of debt or an extension thereof has been granted but as of the end of the period referred to in Article 228 paragraph (6) an agreement has not been reached regarding the composition for composition, then on the final day the Administrator must inform the Court, which must declare the Debtor bankrupt no later than on the next day.

(2) The administrator shall be obligated to announce the matter mentioned in paragraph (1) in the daily

newspaper wherein the petition for suspension of obligations for payment of debt was published in line with Article 226.

Elucidation of article 230

Paragraph (1) Consent to the composition must be met at the latest on the 270th (two hundred and seventy ) day whereas the stipulation of the said consent can be granted afterwards.

Paragraph (2)

To the debtor, this is the consequence of this article’s which decided that in the event when suspension of obligation for payment of debt will be refused, consequently the creditor is deemed bankrupt.

Article 231

(1) The court must appoint a Creditor Committee in the event that:


a. the petition for suspension of obligations for payment of debt includes debt of a complex nature or involving a large number of creditors; or

b. the appointment is requested by creditors representing at least 1/2 (half) of the whole acknowledged debt.

(2) In the implementation of its functions, the administrator must request and consider the recommendations of the Creditor Committee.


Sufficiently Clear

Article 232

(1) The Clerk of the Court must draw up a general list which includes the following items for every suspension of obligations for payment of debt:

a. date of the decision of the temporary suspension of obligations for payment of debt and date of the adjudication the permanent suspension of obligations for payment of debt and extension thereof;

b. excerpt from the Court decision stipulating the temporary as well as permanent suspension of obligations for payment of debt and extension thereof;

c. names of the Supervisory Judge and Administrator appointed; d. summary of the contents of the composition and ratification thereof by the Court; e. termination of composition. (2) Further provision regarding the form and contents of the aforesaid general list shall be stipulated by

the Supreme Court. (3) The Clerk of the Court must make the general list mentioned in paragraph (1) available for public

perusal free of charge. Elucidation of Article 232

Sufficiently Clear

Article 233

(1) If requested by the Administrator, the Supervisory Judge may hear witnesses or order an inquiry by experts to explain the circumstances surrounding the suspension of obligations for payment of debt, and such witnesses shall be summoned in accordance with the provisions of the law of civil procedure.

(2) In the event that witnesses fail to appear or refuse to take the oath or give testimony, provisions of the Law of Civil Procedure shall apply.

(3) Husbands or wives, former husbands or wives, and biological family in a direct ascending as well as descending line of the debtor may exercise their rights to be exempted from the obligation to bear witness.

Elucidation of Article 233 ‘Expert” means a person who is an expert on the matters.

Article 234

The administrator appointed as intended in Article 225 paragraph (2) must be independent and have no conflict of interest with either the debtor or creditor. Administrators as intended in paragraph 1 who are proven to fail to be independent will receive criminal or civic sanction in accordance to the laws and regulations. (1) Those who may become administrators as intended in paragraph (1), shall be: a. individuals or civil entities domiciled in Indonesia, who posses special expertise required in

respect to managing the debtor’s assets; b. registered with the ministry whose work and responsibilities includes laws and regulations;


(2) The Administrator shall be held personally responsible if any fault or negligence in the implementation of his/her management duties causes loss to the debtor’s assets.

(3) The amount of the remuneration for the services of the administrator shall be determined by the Court after the termination of the period of postponement of the debt repayment regulation based on guidelines set forth by the ministry whose work and responsibilities includes laws and regulations and must initially be paid preferentially from the debtor’s assets.


Sufficiently Clear

Article 235

(1) Toward the decision to grant the suspension of obligations for payment of debt, no legal actions can be summons against it.

(2) The decision as intended in paragraph (1) must be announced in the manner described in Article 226.


Sufficiently Clear

Article 236

(1) In the event that more than one administrator is appointed, then in order to execute a valid and binding action, the administrator shall require the approval of more than 1/2 (half) of the administrators.

(2) In the event that there are equal numbers of votes in favor and against a decision, the action as intended in paragraph (1) must obtain the approval of the Supervisory Judge.

(3) The Court may grant a request to replace the administrators at any time, after summoning and hearing the administrators based on:

a. the recommendation of the Supervisory Judge; b. the request of creditors and the aforementioned request may only be submitted if based on

the over 1/2 (half) of the attending creditor’s in the meeting of creditors; c. the administrator’s own request; d. the request of other administrators, if any. Elucidation of Article 236

Sufficiently Clear

Article 237

(1) In the decision granting the suspension of obligations for payment of debt the Court may include provisions which are deemed necessary for the interests of the creditors.

(2) The Supervisory Judge may also at any time carry out the action mentioned in paragraph (1) insofar as there is a permanent suspension of obligations for payment of debt, based on:

a. the initiative of the Supervisory Judge; b. the request of the administrator; or c. the request of one or more creditors.


Sufficiently Clear

Article 238

(1) If the suspension of obligations for payment of debt has been granted, the Supervisory Judge may appoint one or more experts to conduct an inquiry and compile a report concerning the condition of


the debtor’s assets within a specified period and extension thereof which shall be determined by the Supervisory Judge.

(2) The experts’ report as intended in paragraph (1) must include opinions accompanied by the full reasons thereof concerning the condition of the debtor’s assets and the documents surrendered by the debtor and the willingness and ability of the debtor to fulfill his obligations to the creditors, and such report must as much as possible indicate the measures that must be taken in order to meet the demands of the creditors.

(3) The experts must make the report as intended in paragraph (2) available at the office of the Clerk of the Court public perusal free of charge, and no fee shall be charged for making such report available.

(4) The provisions as contained in Article 236 paragraph (3) shall apply mutatis mutandis to the experts. Elucidation of Article 238

Sufficiently Clear

Article 239

(1) Every 3 (three) months as from the decision to grant the suspension of obligations for payment of debt is announced the administrator shall be obligated to report the condition of the debtor’s wealth, and such report must also be made available at the office of the Clerk of the court as mentioned in Article 238 paragraph (3).

(2) The reporting period as intended in paragraph (1) may be extended by the Supervisory Judge. Elucidation of Article 239

Sufficiently Clear

Article 240

(1) During the suspension of obligations for payment of debt, the debtor may not, without authorization from the administrator, take any management or ownership actions on all or a portion of his/her wealth.

(2) In the event that the debtor violates the provision set forth in paragraph (1), the administrator shall be entitled to take any action necessary to ensure that the debtor’s assets are not damaged by the debtor’s actions mentioned above.

(3) Those of the debtor’s obligations undertaken without the approval of the administrator which arises after the commencement of the suspension of obligations for payment of debt, may only be charged to the debtor’s assets insofar as such action benefits the debtor’s assets.

(4) Upon the approval of the administrator, the debtor may obtain loans from a third party only in order to increase the value of the debtor’s assets.

(5) In the event that a collateral is required to obtain the loan referred to in paragraph 4, the debtor may encumber his/her assets by a a pledge of right, fiduciary transfer, security right, mortgage, or collateral right on other properties, insofar as the loan concerned has obtained the approval of the Supervisory Judge.

(6) The a pledge of right, fiduciary transfer, security right, mortgage, or collateral right on other properties on the debtor’s assets as intended in paragraph (5), may only be executed on the portion of the debtor’s assets which have not yet been made a debt security.


Sufficiently Clear

Article 241

In the event that the debtor is married in a union of assets, then the debtor’s assets shall include all united activa and passives. Elucidation of Article 241


”Activa” means all of Debtor’s assets, “passiva” means all of debtor’s debt.

Article 242

(1) During the suspension of obligations for payment of debt, the debtor may not be forced to settle his/her debts as intended in Article 245 and any acts of execution that have commenced in order to obtain debt settlement must be postponed.

(2) Unless an earlier date is stipulated by the Court based on the request of the administrator, all security seizure already applied shall terminate and in the event that the debtor is detained, the debtor must be released immediately after the decision of the permanent suspension of obligations for payment of debt is announced or after the decision to ratify the composition gains permanent legal force, and upon the request of the administrator or Supervisory Judge, the Court must, if necessary, remove the security seizure applied on properties included in the debtor’s assets.

(3) Provisions set forth in paragraph (1) and paragraph (2) shall also apply to execution and security seizure, which have already commenced on properties which are not encumbered even though such execution and seizure are related to the creditor’s claims and are secured by a pledge of right, fiduciary transfer, security right, mortgage or collateral right on other properties or by right which must be privileged in connection with certain assets by virtue of the law.


Sufficiently Clear

Article 243

(1) The suspension of obligations for payment of debt shall not cease the proceeding of a case which have been commenced by the Court nor hinder the filing of a new case.

(2) In the matter of case as intended in paragraph (1) regarding a lawsuit against the settlement of a debt which have been acknowledged by the debtor, whereas the plaintiff has no interest in obtaining a decision to exercise his/her right against any third party, therefore upon the registration of such acknowledgment, the judge may postpone the decision until the termination of the suspension of obligations for payment of debt.

(3) The debtor may not become neither a plaintiff nor defendant in any case which deals with the rights and obligations on his/her assets without the administrator’s approval.


Sufficiently Clear

Article 244

With due regard to the provisions of Article 246, the suspension of obligations for payment of debt shall not apply to: a. debts guaranteed with a a pledge of right, fiduciary transfer, security right, mortgage or collateral

right over property. b. claims for payment of maintenance, supervision or training fees, and the Supervisory Judge must

determine the amount of such claims existing and unpaid prior to the suspension of obligations for payment of debt which do not constitute claims with the right to be prioritized.

c. prioritized claims over certain property of the Debtor or the entire asset of debtor that are not covered in Paragraph (1) point b.


Sufficiently Clear

Article 245

The settlement of all debts, other than the ones as intended by Article 244 that exist prior to the suspension of obligations for payment of debt is granted may not be carried out during the suspension of obligations for


payment of debt, unless such settlement be paid to all the creditors, according to the proportion of each claim, without prejudice to the application of the provision of Article 185 paragraph (3). Elucidation of Article 245

Sufficiently Clear

Article 246

Provisions of Article 56, 57, and 58 shall apply mutatis mutandis in implementing the rights of the creditors as intended by Article 55 paragraph (1) and privileged creditors, with the provision that the suspension shall apply as long as the suspension of obligations for payment of debt period. Elucidation of Article 246

Sufficiently Clear

Article 247

(1) Persons who has any debts or claims on debts against the debtor, may set off the debt under the condition that the aforementioned debts or the legal action which cause the aforementioned debts, exist prior to the suspension of obligations for payment of debt.

(2) Claims against the debtor as intended in paragraph (1) shall be calculated in accordance to the provisions of Article 274 and Article 275.


Sufficiently Clear

Article 248

(1) Persons who has taken over debts or claims on debt to the debtor from a third party prior to the suspension of obligations for payment of debt, may not set off the debt in the event that the transfer of such debt and claim of debt was not conducted in good faith.

(2) Debts or claims or debt transferred after the commencement of the suspension of obligations for payment of debt may not be set off.

(3) Provisions of Article 53 and article 54 shall apply to the settlement of debts regulated in this article. Elucidation of Article 248

Sufficiently Clear

Article 249

(1) In the event that at the time the decision granting the suspension of obligations for payment of debt is announced contains a mutual agreement which has yet to be or has only been partly fulfilled, then the party with whom the debtor enters into the agreement with may request the administrator to provide assurance to continue the implementation of the agreement concerned within a period of time agreed on by the administrator and such party.

(2) In the event that no agreement is reached concerning the period referred to in paragraph (1), the Supervisory Judge shall stipulate such period.

(3) In the event that within the period of time intended in paragraph (1) and paragraph (2) the administrator does not respond or is unwilling to continue the implementation of the agreement mentioned, then the agreement shall terminate and the party mentioned in paragraph (1) may claim compensation as a concurrent creditor.

(4) If the administrator declares his/her readiness to fulfill the agreement, then the administrator shall furnish a guarantee of his/ readiness to implement the agreement concerned.

(5) Provisions of paragraph (1), paragraph (2), paragraph (3) and paragraph (4) shall not apply to agreements which require the debtor to execute the agreed actions independently.



Article 250

(1) In the case that the agreement referred to in Article 248 involves the delivery of traded goods which

are normally traded by a fixed period of time and the party obligated to deliver the goods prior to the delivery is conducted by the debtor, then the agreement shall become canceled when the decision to temporary suspension of obligations for payment of debt is announced, and in the event that the opposing party suffers losses due to the cancellation, he/she may apply as a concurrent creditor to obtain compensation.

(2) In the event that the assets suffer losses due to the cancellation mentioned in paragraph (1), therefore the opposing party shall be obligated to pay such damages.


Sufficiently Clear

Article 251

(1) In the event that the debtor had leased an asset, then the debtor, with the administrator’s approval, may terminate the lease agreement, insofar as the termination notification is delivered before the termination of the agreement in accordance with local custom.

(2) In implementing the termination as intended in article (1), due observance must also be made to the period of time in accordance with the agreement or custom, with provision that a period of 90 (ninety) days is sufficient.

(3) In the event that lease had been paid in advance, therefore the lease agreement may not be terminated prior to the end of the lease period which have been paid for in advance.

(4) As from the day that the decision of the temporary suspension of obligations for payment of debt is announced, the leasing fee becomes debt of the debtor’s assets.


Sufficiently Clear

Article 252

(1) Immediately after the commencement of the suspension of obligations for payment of debt, the debtor shall be entitled to dismiss his/her employees, obliging to the provisions of Article 240 and the period which has been agreed or is required by the prevailing laws and regulations, with the understanding that such employment may nevertheless be terminated with at least 45 (forty-five) days prior notification.

(2) As from the commencement of the moratorium on temporary debt repayments, salary and other expenses arising from such employment become debts of the debtor’s assets.


Sufficiently Clear Article 253

(1) Any payment made to the debtor after the temporary suspension of obligations for payment of debt is

announced but which have not been announced in public, in order to fulfill any contract entered prior to the announcement of the temporary suspension of obligations for payment of debt, shall release the party who made the payment to the debtor’s assets unless it can be proven that the party has knowledge of the temporary suspension of obligations for payment of debt.

(2) Payments as referred to in paragraph (1) made after the announcement shall only release the person implementing such payment in the event that he/she is able to prove that even though an announcement has been made in accordance with the law, the announcement concerned could not


become known at his/her residence, without prejudice to the rights of the administrator to prove otherwise.


Sufficiently Clear

Article 254

The suspension of obligations for payment of debt shall not apply to benefit co-debtors and guarantor. Elucidation of Article 254

Sufficiently Clear

Article 255

(1) The suspension of obligations for payment of debt may be terminated upon the request of the Supervisory Judge, one or more creditors, or upon the initiative of the Court in the event that:

a. the debtor, during the suspension of obligations for payment of debt, acts in bad faith in the management of his/her assets;

b. the debtor has caused damages to or has attempted to cause damages to the creditors; c. the debtor has violated the provisions of Article 240 paragraph (1); d. the debtor fails to carry out the obligations required of him/her by the Court on or after the

suspension of obligations for payment of debt was granted, or fails to carry out actions requested by the administrator in the interest of the debtor’s assets;

e. during the period of the suspension of obligations for payment of debt, the condition of the debtor’s assets makes the continuation of the suspension of obligations for payment of debt unfeasible; or

f. the debtor’s circumstances, cannot be expected to fulfill his obligations to creditors on time; (2) In the circumstances referred to in paragraph (1) point a and point e the administrator shall be

obligated to file a request to terminate the suspension of obligations for payment of debt. (3) The petitioner, debtor and administrator must be heard on the date stipulated by the Court and after

being properly summoned. (4) The request to terminate the suspension of obligations for payment of debt as intended in article (1)

must be examined within 10 (ten) days after the filing of the aforementioned request and the decision must be issued within 10 (ten) days as from the examination is completed.

(5) The Court’s decision must contain the reasons underlying the said decision. (6) In the event that the postponement of debt settlement obligation is terminated by virtue of the

provisions of this article, the debtor must be declared bankrupt in the same decision. Elucidation of Article 255

Sufficiently Clear

Article 256

Provisions of Article 11, Article 12, Article 13, and Article 14 shall apply mutatis mutandis to the decision to terminate the suspension of obligations for payment of debt. Elucidation of Article 256

Sufficiently Clear

Article 257

Decision on bankruptcy as the result of the decision to terminate the suspension of obligations for payment of debt must be announced in the manner set forth in Article 15 paragraph (4).



Article 258

(1) If the Court considers that the session for the termination of the suspension of obligations for

payment of debt can not be concluded before the date on which creditors are to be heard as stipulated in Article 225 paragraph (3), the Court must order that the creditor be notified in writing that they cannot be heard on such date.

(2) If considered necessary, the Court shall forthwith determine another date to hold session and in that event the creditor shall be summoned by the administrator.


Sufficiently Clear

Article 259

(1) The debtor at any time is entitled request the Court to revoke the suspension of obligations for payment of debt, on the grounds that the debtor’s assets enables the commencement of re-payment with the provision the administrator and creditor must be properly summoned and heard before a decision is issued.

(2) The summons mentioned in paragraph (1) must be conducted by the impound officer with an official registered letter, no later than 7(seven) days prior to the Court session.


Sufficiently Clear

Article 260

During the suspension of obligations for payment of debt, the debtor cannot be declared bankrupt. Elucidation of Article 260

Sufficiently Clear

Article 261

In the event that pursuant to one of the provisions in this Chapter, bankruptcy is declared, then Article 15 shall apply. Elucidation of Article 261

Sufficiently Clear

Article 262

(1) In the event that bankruptcy is declared in accordance to provisions of this chapter, the following provisions shall apply:

a. the period of time referred to in Article 42 and Article 44 shall be counted from the commencement of the suspension of obligations for payment of debt;

b. legal actions conducted by the debtor after being given authorization by the administrator must be considered as legal actions conducted by the curator, and debts of the debtor’s assets which arises during the suspension of obligations for payment of debt shall be debts of bankruptcy assets;

c. obligations of the debtor which arise during the suspension of obligations for payment of debt without authorization by the administrator may not be charged to the debtor’s assets, unless such matter benefits the debtor’s debts.


(2) In the event that the petition for a suspension of obligations for payment of debt is submitted within 2 (two) months after the previous suspension of obligations for payment of debt, therefore the provisions of paragraph (1) shall also apply to the next suspension of obligations for payment of debt.



Paragraph (2) The time period as intended by paragraph (1) point a is counted starting from the announcement of the first decision of provisional suspension of obligations for payment of debt.

Article 263

Remuneration for experts appointed by virtue of Article 238, shall be determined by the Supervisory Judge and must be paid with priority from the debtor’s assets. Elucidation of Article 263

Sufficiently Clear

Article 264

Provisions of international laws as intended in Article 212, Article 213, and article 213 shall apply mutatis mutandis in the matter of a suspension of obligations for payment of debt. Elucidation of Article 264

Sufficiently Clear

Part Two On the Composition

Article 265

Debtor shall be entitled to offer a composition or afterward propose the suspension of obligations for payment of debt to the creditor. Elucidation of Article 265

Sufficiently Clear

Article 266

(1) In the event that the proposal for composition is not submitted to the Court Clerk as intended by Article 225, the proposal concerned shall be moved forward prior to the date of the court session as intended in Article 226 or on a later date with due observance to provisions of Article 228 paragraph (4).

(2) Copies of proposal for composition must be made submitted to the Supervisory Judge and the administrator and experts, if any.


Sufficiently Clear

Article 267


In the event that prior to the decision to ratify the composition obtains legal force, a decision is issued which terminates the suspension of obligations for payment of debt, the proposal for composition shall be canceled. Elucidation of Article 267

Sufficiently Clear

Article 268

(1) In the event that the proposal for composition has been submitted to the Clerk of the court, then the Supervisory Judge must determine:

a. the last day on which the claims subject to the suspension of obligations for payment of debt must be submitted to the administrator;

b. the date and time the suggested proposal for composition shall be discussed and decided upon in a meeting of creditors chaired by the Supervisory Judge.

(2) The period of time between the day as intended in paragraph (1) points a and b shall be no less than 14 (fourteen) days.


Sufficiently Clear

Article 269

(1) The administrator must announce the determination of the period referred to in Article 268 paragraph (1) along with the inclusion of the proposal for composition, unless this matter has already been announced in accordance to the provisions set forth in Article 226.

(2) The administrator must also notify matters as intended in paragraph (1) by registered mail or courier to all the creditors known to him/her, and this notification must mention the provisions of Article 270 paragraph (2).

(3) Creditors may attend in person or be represented by a proxy by virtue of a written power of attorney. (4) The administrator may require that the debtor provides him/her with a deposit in an amount

determined by the administrator in order to cover the expenses of such announcement and notification.



Paragraph (2)


“ power” here has different meanings from power intended in Article 7. Paragraph (4)

Sufficiently clear

Article 270

(1) Claims must be filed with the administrator by submitting a claim document or other written evidence which states the nature and amount of claim accompanied by supporting evidence or copies thereof.

(2) Creditors may request a receipt from the administrator in respect of claims submitted to the

administrator as referred to in paragraph (1). Elucidation of Article 270


Sufficiently Clear

Article 271

All calculations included by the administrator must be compared to the records and reports provided by the debtor. Elucidation of Article 271

Sufficiently Clear

Article 272

The administrator must draw up a register of the Receivables, mentioning the names and domiciles of the creditors, the amount and description of each debt, and also whether the debt is acknowledged or denied by the administrator. Elucidation of Article 272

Sufficiently Clear

Article 273

(1) Receivables on debt bearing interest must be added to the register intended in Article 272 along with calculation of interest up to the day of the commencement of suspension of obligations for payment of debt.

(2) The provisions of Article 135, Article 139, Article 140, Article 141, Article 142 paragraph (1) and paragraph (2) shall apply mutatis mutandis in the matter of suspension of obligations for payment of debt.


Sufficiently Clear

Article 274

(1) A claim with postponement conditions may be included in the register mentioned in Article 272 for the prevailing value at the commencement of the suspension of obligations for payment of debt.

(2) In the event that the administrator and creditor fail to reach an agreement concerning the determination of the value of such claim, all the claim of the Creditor must be accepted conditionally.


Sufficiently Clear

Article 275

(1) Receivables on debt which the due date is uncertain or which gives an allowance of periodic payment, must be included in the register for the value prevailing on the date of the announcement of provisional suspension of obligations for payment of debt.

(2) All Receivables which will be collectible within 1 (one) year after the announcement of the decision of the suspension of obligations for payment of debt, must be treated as Receivables due payable on the said date

(3) All receivables which are collectible after 1 (one) year since the announcement of the decision of the suspension of obligations for payment of debt, must be entered into the register for amounts which apply 1(one) year after the announcement of the aforementioned adjudication of suspension of obligations for payment of debt.

(4) In calculating the amount of receivables referred to above in paragraph (2) and (3), the following must be observed:

a. the time and procedure of installment payments;


b. the profit which may be gained; and c. the rate of interest if any. Elucidation of Article 275

Sufficiently Clear

Article 276

(1) The administrator must provide a copy of the register mentioned in Article 272 at the office of the Clerk of the Court, in order that within 7 (seven) days prior to the meeting as intended in Article 268 for free perusal by anyone who wishes it.

(2) The copy as intended in paragraph (1) shall be provided free of charge. Elucidation of Article 276

Sufficiently Clear

Article 277

(1) With due regards to the provisions regarding the period for the suspension of obligations for payment of debt as referred to in Article 228 paragraph (4), at the request of the Administrator or by virtue of his office, the Supervisory Judge may postpone the discussion and the vote concerning such proposal for composition.

(2) In the event of a postponement of the discussion and vote as referred to in paragraph (1), the provisions of Article 269 shall apply.


Sufficiently Clear

Article 278

(1) At the composition meeting, both the administrators or the experts, if any, have to provide a written report regarding the composition proposed.

(2) The provisions as referred to in Article 150 shall apply mutatis mutandis in the matter of suspension of obligations for payment of debt.

(3) Receivables that are submitted to the administrator after the period mentioned in Article 263 (1) a, but at the latest two days before the date of the meeting, have to be entered onto the list upon a request therefor made at the meeting, if neither the administrators nor any of the creditors present objections thereto

(4) Receivables thereafter should not be entered onto the register. (5) The provisions in paragraph (2) and paragraph (3) above should not be applicable if the creditor is

domiciled outside of the territory of the Republic of Indonesia, which prevented him/her from reporting earlier.

(6) In case of an objection as stipulated in paragraph (2) and paragraph (3), or if there is a dispute regarding the existence of the impediment as stipulated in paragraph (5), the Supervisory Judge shall decide the matter after having consulted with the meeting.


Sufficiently Clear

Article 279

(1) At the meeting, the administrators are entitled to withdraw any acknowledgment or denial which they have made.

(2) The creditors present at the meeting shall be able to deny receivables son debt that were acknowledged either wholly or partly by the administrators.


(3) Acknowledgment or denial made during the meeting will be recorded on the above mentioned register.


Sufficiently Clear

Article 280

The Supervisory Judge shall decide whether and in what amount the creditors whose receivables on debts are objected to will be admitted to the voting. Elucidation of Article 280

Sufficiently Clear

Article 281

(1) The proposal for composition may be accepted based on: a. approval by more than 1/2 (half) of the concurrent creditors whose rights have been

acknowledged or temporarily acknowledged who are present at the meeting of creditors referred to in Article 268 including the creditors referred to in Article 268, who together represent no less than 2/3 (two thirds) of all the acknowledged or temporarily acknowledged claims of the concurrent creditors or their proxies who are present at such meeting.

b. approval by more than 1/2 (half) of the creditors whose debts has been secured by pledge, fiduciary transfer, securities right, mortgage, or other securities over properties, who are present at the meeting of creditors and including the creditors who together represent no less than 2/3 (two thirds) of all the acknowledged or temporarily acknowledged claims of the concurrent creditors or their proxies who are present at such meeting

(2) Creditors as intended in paragraph (1) point b who disagrees with the composition are compensated in the smallest amount of the security value or the actual number of loan that is directly secured by a security over property.

(3) The provisions in Article 152 and Article 153 shall also apply in the voting on the acceptance of the proposal for composition referred to in Paragraph (1).



Paragraph (2)

“Securities Value” is the value of selectable security values over previously selected security values or security objects established by Supervisory Judge.

Paragraph (3)

Sufficiently clear

Article 282

(1) The minutes of the meeting chaired by the Supervisory Judge must state the contents of the proposal for composition, the names of creditors who are present and are entitled to vote, notes regarding the votes cast by creditors, and the result of the vote and notes concerning any other incidents at the meeting.

(2) The creditors register made by the administrator which has been supplemented or amended in the meeting must be signed by the Supervisory Judge and acting Clerk of the Court and must be attached to the minutes of the meeting concerned.

(3) A copy of the minutes of the meeting referred to in paragraph (1), must be made available at the office of the Clerk of the court for 8 (eight) working days in order to be examined free of charge by the public.



Sufficiently Clear

Article 283

(1) the debtor and the creditors who voted in favor of the composition plan may, within 8 (eight) days after the date the ballot in the meeting, request that the minutes of meeting be corrected if based on the existing documents the Supervisory judges erred in considering the composition to have been rejected.

(2) If the Court makes corrections to the minutes of meetings then in the same decision the Court must decided composition ratification deadline, which must take place at least 8 (eight) days and the longest 14 (fourteen) days after the Court decision that corrected the minutes has been announced.

(3) The Administrator shall be obliged to notify the creditors in writing the Court decision as intended by Paragraph (2) and such decision shall have the effect that the declaration of bankruptcy as intended by Article 289 to be null and void.


Sufficiently Clear

Article 284

(1) If the proposal for composition is accepted, the Supervisory Judge must submit a written report to the Court on the date stipulated for the purposes of the ratification of the composition, and on such stipulated date the administrator and creditors may submit the reasons which caused them to accept or reject such proposal for composition.

(2) The provision in Article 158 paragraph (2) shall apply mutatis mutandis in respect of the implementation of the provision in paragraph (1).

(3) The Court may postpone and stipulate the date of the session for the ratification of the composition which must take place no later than 14 (fourteen) days after the date of the session as referred to in paragraph (1).


Sufficiently Clear

Article 285

(1) The Court must render a decision concerning the ratification of the composition together with the reasons therefor at the session referred to in Article 284 paragraph (3).

2) The Court shall be obligated to refuse to ratify the composition if: a. the debtor’s assets, including goods in respect of which there are retention rights, far exceed

the amount agreed in the composition; b. the implementation of the composition is not sufficiently guaranteed;

c. the composition was reached as a result of fraud, or collusion with one or more creditors, or due to the use of other dishonest means, regardless of whether the debtor or other parties cooperated to achieve such ends; and or

d. the fees for services and costs expended by the experts and the manager have not yet been paid, or no guarantee of their payment has been given.

3) If the Court refuses to ratify the composition, then in the same decision the Court must declare the debtor bankrupt and said decision shall be announce in the State Gazette and at least 2 (two) daily newspapers as intended by article 226 within the longest 5 (five) days as the decision is accepted by the Supervisory Judge and Curators.

4) The provisions referred to in Article 11, Article 11 and Article 12 shall apply mutatis mutandis in respect of the ratification of composition however they shall not apply to the rejection of the composition.




Paragraph (2)

Point a Rights to seize over an asset is retention right.

Point b Sufficiently clear

Point c Sufficiently clear

Point d Sufficiently clear



Article 286

The rectified composition is binding to all creditors, except to Creditors who disagrees with the composition as intended in Article 280 (2) . Elucidation of Article 286

Sufficiently Clear

Article 287

The ratification of the composition shall, with regard to the minutes as intended by Article 282, to all Creditors who are not denied by the debtor, forms the legal basis executable against the debtor and all persons involved in the composition as guarantors. Elucidation of Article 286

Sufficiently Clear

Article 288

The suspension of obligations for payment of debt shall immediately terminate after the composition ratification decision becomes legal and binding and the administrators shall announce this termination in the State Gazette and at least 2 (2) daily newspaper as intended in Article 227 Elucidation of Article 288

Sufficiently Clear

Article 289

If the proposal for composition is rejected, the Supervisory Judge must immediately notify the Court of such rejection by delivering to the Court copies of the composition plan and minutes of the meeting as intended in Article 282, and in such matters, the Court must declare the debtor bankrupt after the Court receives the notification of the rejection from the Supervisory Judge, with due observance of provisions referred to in Article 283 paragraph (1). Elucidation of Article 289

Sufficiently Clear


Article 290

If the Court has declared the Debtor bankrupt, the provisions concerning bankruptcy as intended in CHAPTER II shall apply with the exception of Article 11, Article 12, Article 13, and Article 14. Elucidation of Article 290

Sufficiently Clear

Article 291

(1) Provisions referred to in Article 170 and Article 171 shall apply mutatis mutandis to nullification of composition.

(2) In a Court decision nullifying composition, the debtor shall also be declared bankrupt. Elucidation of Article 291

Sufficiently Clear

Article 292

A composition cannot be offered in a bankruptcy decided by virtue of Article 285, Article 286, or Article 291. Elucidation of Article 292

This article means decision that declares bankruptcy results in immediate insolvency status over debtor’s assets.

Article 293

(1) Except determined otherwise, decisions made by virtue of the provisions in CHAPTER III herein may

not be appealed against. (2) An appeal may be filed by the Attorney General in the interest of the law. Elucidation of Article 293

Sufficiently Clear

Article 294

Petitions filed based on provisions as intended by Article 237, Article 255, Article 256, Article 259, Article 283, Article 285, Article 290 and Article 291 must be signed by an advocate, who acts by virtue of a special Power of Attorney, unless filed by the administrator. Elucidation of Article 294

Sufficiently Clear

CHAPTER IV PETITION FOR CIVIL REVIEW

Article 295

(1) Against judicial decision that already has binding legal force, a petition for civil review may be filed to

the Supreme Court, except stipulated otherwise in this Law. (2) Petition for civil review may be filed, if: a. After the case has been decided, there is/are new evidence(s) that in nature may stipulate

the case, which at the time of the investigation in the Court has already occur, but has not been found; or

b. The judge has a real mistake in making the decision.



Article 296

(1) Application for petition for civil review is based on reason as intended by Article 295 paragraph (2) point a, shall be done at the latest of 180 (a hundred and eighty eight) days after the day of the decision that wants to be apply for a reconsideration has binding legal force.

(2) Application for petition for civil review is based on reasons as intended by Article 295 paragraph (2) point b, shall be done at the latest of 30 (thirty) days after the day of the decision that wants to be apply for a reconsideration has binding legal force.

(3) Application for civil review shall be submitted to the Clerk of the Court. (4) The Clerk of the Court shall then register the petition for civil review at the day of the petition is filed,

and to the applicant shall be given a written receipt that signed by the Clerk of the Court at the same day as the day of the petition is filed.

(5) The Clerk of the Court shall convey the petition for civil review to the Clerk of the Supreme Court in the period of 2 (two) days


Sufficiently Clear

Article 297

(1) The applicant for petition for civil review shall be obliged to submit to the Clerk of the Court the supporting evidence, which forms the basis of the petition and shall also be obliged to submit to the respondent the copy of petition for civil review along with copy of supporting evidence at the day of the said petition is filed as intended by Article 296 Paragraph (4).

(2) Without waiving the provision as intended by paragraph (1), the Clerk of the Court shall be obliged to submit the copy of the petition for civil review along with copy of supporting evidence to the respondent at the latest 2 (two) days after the petition is filed.

(3) The respondent may submit a response against the petition filed, at the latest 10 (ten) days after the day of the petition is filed.

(4) The Clerk of the Court must convey the response as intended by paragraph (3) to the Clerk of the Supreme Court at the latest 12 (twelve) days after the petition is filed.


Sufficiently Clear

Article 298 (1) The Supreme Court immediately examine and render decision of the petition for civil review at the

latest 30 (thirty) days after the day of the petition is received by the Clerk of the Supreme Court. (2) The decision of petition for civil review must be announced in a session open for public. (3) At the latest of 32 (days) after the day of the petition is received by the Clerk of the Supreme Court,

the Supreme Court shall be obliged to submit to the parties the copies of decision of civil review completed with legal consideration which is the form of the basis of the decision.


Sufficiently Clear

CHAPTER V OTHER STIPULATIONS


Article 299 Unless otherwise stipulated in this Law, then the procedural law shall be the civil procedural law. Elucidation of Article 299

Sufficiently Clear

Article 300 (1) The Court as intended by in this Law, besides examining and giving decision of petition for

consideration for bankruptcy and suspension of obligations for settlement of Debt, shall also be authorized to examine and decide other cases in the commercial area, which stipulation is done by the law.

(2) The establishment of the Court as intended by in Paragraph (1) shall be done in stages by Presidential Decree, with regard to the necessity and readiness of the resources needed.


Article 301

(1) The Court shall be obliged to examine and decide the case at the first level by a panel of judges. (2) In the matter relating to commercial cases as intended by Article 300 Paragraph (1), the Chairman

Supreme Court may stipulate the types and value of the case at the first level shall be examined and decided by a single judge.

(3) In doing so, the Judges of the Court are assisted by one Clerk or one substitute Clerk and a bailiff. Elucidation of Article 301 Sufficiently clear

Article 302 (1) The Judges of the Court are appointed by the decision of the Chairman of the Supreme Court. (2) Requirements to be appointed as judges as intended paragraph (1) are: a. Have experience as Judge in the area of the Public Court; b. Have dedication and mastering knowledge in the field of cases that are part of the scope of

the Court authorization; c. Dignified, honest, just, with have good manners; and d. Have accomplished the program of special training at the Court as Judges. (3) With regard to requirements as intended in paragraph (2) point b, point c, and point d, by Presidential

Decree based on proposal from the Supreme Court Chairman, it may be appointed an expertise, as an ad hoc judge, in the first level of Court, cassation, and civil review.


Article 303

The Court is still authorized to examine and settle the bankruptcy petition from the parties, which bound by an agreement with an arbitration clause, as long as the debt that is the basis of the bankruptcy petition is in compliance with the stipulation as mentioned in Article 2 paragraph (1) of this Law. Elucidation of Article 303 The provisions of this law is intended to give distinction to the Court that is still authorized to examine

and settle the bankruptcy petition from the parties, although the loan agreement they made contains an arbitration clause.


CHAPTER VI TRANSITIONAL PROVISIONS

Article 304

Dispute, which during this Law is in force: a. Has been examined and decided but is not implemented yet, or has been examined but has not

been decided yet, shall be completed based on the laws and regulations on bankruptcy previously in force prior to this Law.

b. Has been submitted but has not been examined yet, shall be completed based on the provisions of this Law.

Elucidation of Article 304 Point a Sufficiently clear Point b Has not been examined means has not been heard by the Court.

Article 305 All the laws and regulations that are the implementation of the Bankruptcy Law (Faillissements-verordening Staatblad 1905:217 juncto Staatsblad 1906:348) which has been amended by Government Regulation in Lieu of Law Number 1 of 1998 regarding Amendment of Bankruptcy Law which stipulated to become Law based on Law Number 4 of 1998 at the time of this Law is enforced, shall be still prevails as long as the said law is not in contrary and/or not yet amended by the new regulation based on this Law. Elucidation of Article 305 Sufficiently clear

CHAPTER VII CLOSING PROVISIONS

Article 306

The Commercial Court at the District Court of Central Jakarta that established by provision of Article 281 paragraph (1) of Government Regulation in Lieu of Law Number 1 of 1998 regarding Amendment of Bankruptcy Law as previously stipulated to become law Number 4 of 1998, shall be stated to be still authorized to examine and decide the case that is in the scope of Commercial Court duties. Elucidation of Article 306 Sufficiently clear

Article 307 At the time of this Law is enforced, the Bankruptcy Law (Faillissements-verordening Staatblad 1905:217 juncto Staatsblad 1906:348) and Law Number 4 of 1998 regarding the Stipulation of Government Regulation in Lieu of Law Number 1 of 1998 regarding the Amendment of Bankruptcy Law to become Law (State Gazette of the Republic of Indonesia of 1998 Number 135, Supplement to the State Gazette of the Republic of Indonesia Number 3778), shall be revoked and shall be stipulated not in force anymore. Elucidation of Article 307 Sufficiently clear

Article 308 This Law shall be enforced as on the day of the promulgation.


For public cognizance, ordering the promulgation of this Law by placing it in the State Gazette of the Republic of Indonesia. Elucidation of Article 308 Sufficiently clear


bankruptcy law and suspension of payment

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