Legal Updates on Obligation To Use Indonesia Language In Agreements
On 30 September 2019, the President enacted Presidential Regulation No. 63 of 2019 on the Utilization of Indonesian Language, which clearly obliges any agreement involving an Indonesian party to be made in Indonesian language, or at least in dual language.
Obligation To Use Indonesia Language In Agreements[1]
On 30 September 2019, the President has recently enacted a new Presidential Regulation No. 63 of 2019 on the Utilization of Indonesian Language (“Presidential Regulation No. 63”), which is an implementation regulation to Law No. 24 of 2019 on National Flag, Language, Coat of Arms and National Anthem. This Presidential Regulation No. 63 now clearly obliges any agreement, which involves an Indonesian party, to be made in Indonesian language, or at least in dual language.
The Presidential Regulation also stipulates that, if the agreement is made in dual language, the parties may determine which language shall be the prevailing language if there is inconsistency between the dual language. Nevertheless, there are also other specific regulations that stipulate that the Indonesian version of some specific agreements should be the prevailing language if they are made in dual language. For instance, Law No. 2 of 2017 on Construction Service states that the Indonesian version should be the prevailing language in the construction agreements.
As you may be aware, there was a Supreme Court’s decision which rendered a financing agreement to be invalid due to the use of an English language only (without the existence of Indonesian language). We understand that you may not want to be at the receiving end of an adverse decision by waiving the above obligation. Hence, we suggest that all of your agreements be made in Indonesian language, or at least in dual language, including the ones that (a) have been signed and (b) will be signed.
Do let us know if you need our assistance to translate the agreements and review your agreements from legal perspective, or if you have any questions regarding the above obligation. For inquiries, please contact our lawyers.
Best regards
BATAVIA ADVOCATORUM (B.Av)
[1] This publication is for general information only. Any belief on the material contained herein is at the user’s own risk. You should contact our lawyer to discuss the above issue further. B.Av’s publications are copyrighted and may not be reproduced without the express written consent of B.Av.