Legal Issue in the Matter of Cross-Border Insolvency in Indonesia Based on Law No. 37 Of 2004 on the Insolvency and Postponement of Debt Payment Obligation

Abstract

The issue of cross-border insolvency is growing rapidly in line of the global economic movement. The foreign elements on insolvency process raises question on the States’ jurisdiction, the Court’s authority to adjudicate the case of cross-border insolvency, the recognition of Indonesia’s court decision on insolvency in another State, as well as the issue of Curator’s authority to cooperate with another State officials. In Indonesian insolvency law, the issue of cross-border insolvency is limitedly regulated and unable to resolve the arising legal issues. The inconsistency of the application on territoriality and universality principle in Law No. 37 of 2004 on the Insolvency and Postponement of Debt Payment Obligation causes the difficulty on executing the insolvency assets in another State’s territory and vice versa. Thus, an adequate cross-border insolvency legal framework is required to provide legal certainty for the business actors in Indonesia by adopting the existing legal framework through international agreements and reforming the Indonesian insolvency law.