Court Nullifies English Language Contract

On June 20, 2013, the District Court of Jakarta Barat nullified a Loan Agreement executed only in English, concluding that contracts involving Indonesian parties must be written in Bahasa Indonesia, under Decision No. 451/Pdt.G/2012/PNJkt.Bar.

The District Court based its decision on Law No. 24 of 2009 on Flag, Language and Coat of Arms and National Anthem ("Law 24/2009"). Under Law 24/2009, Indonesian language is required in any MOU or agreement involving Indonesian parties. The District Court interpreted that provision to mean that an agreement not using Bahasa Indonesia is void as a matter of law.

The District Court decision was affirmed on May 7, 2014, by the Jakarta High Court in Appellate Decision No. 48/Pdt/2014/PT.DKI. In its considerations, the High Court opined that the lower court decision was legally sound, and because there were no new contrary facts submitted by the appellant, the High Court affirmed the decision entirely.