Jakarta, 29/01/2016-NLDA- Every Friday, The National Law Development Agency conducts a Transfer of Knowledge by Foreign Lawyer. Today’s topic is The Use of Indonesian Languge in Commercial Contracting that presented by Ms. Karen Phang, Foreign Legal Adviser from Widyawan & Partners Lawfirm.
The Government of Indonesia enacted Law No. 24 of 2009 concerning The National Flag and Languange, State Symbols and National Anthem. Article 31 of Law No. 24 of 2009 stipulated that Indonesian language must be used in memorandum of understanding or agreement which involve state institutions, government agencies of Republic of Indonesia, Indonesian private institutions or Indonesian citizen. Such memorandum involve foreign party may also be made in the national langunge of such foreign party and/or in English.
Further, Law No. 24 of 2009 requires an implementing regulation within 24 months since the enactment of Law No.24/2009 i.e by July 2011. However up to this date there have not been any implementing regulations issued.
In her presentaton Ms Karen Phang said that in practice, agreement are negotiated and drafted in English. Should contract document be written in Bahasa, it will need translation and be time consuming. Furthermore cost of translation is very expensive.
Furthermore Ms Karen Pang explained an example of case that happened on June 2013 where West Jakarta District Court issued a Decision that annuled a loan agreement entered into by PT Bangun Pratama Lestari vs Nine AM Ltd. The reason of annuling the agreement is because the contract that was made in English was deemed to breach the provision under the Law 24/2009. The use of English Language was deemed to breach Article 1335 and Article 1337 of Indonesian Civil Code and Contract made not in Bahsa is deemed illegimate or contrary to public order. As a response to the Judgement, Nine AM Ltd filled an appeal to the Jakarta High Court however Jakarta High Court and Suprme Court affirmed the Decision of West Jakarta District Court. (Humas BPHN)