Indonesia And COVID-19: FAQs On Force Majeure

1. Is force majeure a recognised concept and how is it defined?

Yes, the concept of force majeure is recognized in the Indonesian Civil Code (the "ICC"). However, the concept as formulated in the ICC is relatively unspecific in comparison to what is generally found in contemporary international legal practice. As a result, parties will want to negotiate their own rules of force majeure when drafting their contract.

The principal rules of law relevant to the concept of force majeure are found in Articles 1244 and 1245 of the ICC, which read as follows:

Article 1244:

"An obligor shall be ordered to compensate for costs, losses and profit if he/she cannot prove that the non-performance of a legal obligation or the late performance of such legal obligation, is caused by something which is unforeseen, for which he/she cannot be held responsible, even in the absence of bad faith on his/her part."