New guideline on bankruptcy and suspension of payment amid COVID19 economic crisis

​COVID19 may see the rise of bankruptcy and suspension of payment cases.
Indonesia’s Supreme Court seems to be preparing for the rise, with the issuance of Decree of Chairman of Supreme Court Number 109/KMA/SK/IV/2020 on the Guideline on Settlement of Bankruptcy and Suspension of Debt Payment Obligation Cases (the “Guideline”).

​​Picture Source: Official Website of the Supreme Court

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​We welcome the issuance the Guideline, since it provides clarity on several important issues:

1. Position of Secured Creditor for filing PKPU

The limitation that only unsecured creditor can file for suspension of debt payment obligation - Penundaan Kewajiban Pembayaran Utang (“PKPU”) as stated by previous guideline has been lifted. Therefore, under this new guideline, secured creditor is allowed to file for PKPU towards its debtor.
 
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2. Clarity on the authority of Financial Services Authority – Otoritas Jasa Keuangan (“OJK”).

The Guideline clearly states that OJK has the authority to file for petition of Bankruptcy or Suspension of Payment of debtor that is a bank. This clarity is required to address the uncertainty of who has the authority to file for a petition for a declaration of bankruptcy with respect to a debtor that is a Bank, since Bank Indonesia has already assign the function, duty and authority on regulating and supervision of bank activity to OJK.
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Picture: Press Conference by OJK and Bareskrim of Indonesia' Police on the apprehension of suspect in spreading of hoax on  banking. Source: official website of OJK. 

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​It is also important to note however that talks of returning the authority back to Bank Indonesia has arisen recently.

Anticipation of any changes in the authority is advised. 

​3. Detailed technical and administrative requirements as well as procedure on the Bankruptcy and PKPU cases. 
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The Guideline provide detailed information on the registration process, appointment of judges, summoning of the parties, trial and award. 

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Certain clarity being provided by the Guideline is appreciated. It is important to note that there are still issues that can only be clear when we actually file the petition. This is mainly because it will depend on the approach in fulfilling the technical and administrative requirement as provided in the Guideline, which will be varied for each specific cases. 

The information contained herein is not intended to provide formal and specific advice and merely highlight important issues in relation to new guideline on bankruptcy and suspension of payment. Dynameis makes no warranties about the completeness, reliability and accuracy of the information contained herein. Further, Dynameis is not responsible for any errors or omissions or for the results obtained from the use of this information.

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