What Is Agreement In Bahasa Indonesia

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Furthermore, the regulation fails to definitively clarify the consequences of non-compliance with the language law, particularly in light of the West Jakarta District Court`s ruling in the case of PT Bangun Karya Pratama Lestari/ NineAAMA Lestari/ NineAA Ltd, where the court ruled that an agreement involving an Indonesian party that is not in the Indonesian language was illegal and therefore not adicti. We expect that the ambiguity surrounding the application for Indonesian language in a treaty will persist at least until the Indonesian government adopts another law or legislation that clarifies or even removes the application for Indonesian language under Law 24. It is therefore important that foreign companies wishing to enter into a contract with an Indonesian party will finalise the draft Indonesian agreement before signing. Shortly after the publication of Law 24, the then Indonesian Minister of Legal Affairs and Human Rights issued two letters stating that the absence of an Indonesian version of a treaty would not affect the validity of the treaty. With this clarification, the Minister referred to the principle of contractual freedom2, whereby the parties are free to determine the terms of their contract, including the choice of language. Although the purpose of this clarification has been to provide some comfort to foreign lawyers and investors, the question remains for legal experts as to the extent to which this clarification can be applied, as it does not serve as a law or legislation. The Court ordered that the parties be reinstated in the same position they would have been in had the agreement not been reached. Therefore, if the parties wish to reach an agreement in English, this agreement must be signed simultaneously in Indonesian and English from the PR 63 exhibition. Despite the clarification made to law firms by the Minister, in June 2013, the West Jakarta District Court entered into a loan agreement between an Indonesian borrower and a foreign lender unenforceable for non-compliance with the language law. The loan agreement in question was written only in English. Yes, Article 26, paragraph 4 of PR 63 expressly authorizes Indonesian and foreign parties to agree to choose the governmental language of their agreement.

Law 24 is silent on the validity of existing agreements that do not have an Indonesian version, but in light of the recent decision of the Court of Justice, we strongly recommend that Indonesian versions of all existing contracts be prepared and signed as soon as possible. In essence, Law 24 and PR 63 stipulate that a foreign language can only be used if the agreement (melibatkan) concerns a foreign party. It is not certain that a PMA PT can be considered a “foreign party” within the meaning of Law 24 and (ii) whether the “participation of a foreign party” can be broadly interpreted to cover a scenario in which a foreign person participates in the negotiation and preparation of the agreement (for example. B as president of the PMA PT), but is not a contracting party.