Indonesian Constitutional Court Ruling Changes Fiduciary Security Execution

On January 6, 2020, the Indonesian Constitutional Court issued Decision No. 18/PUU-XVII/2019, declaring that Articles 15(2) and 15(3) of Law No. 42 of 1999 on Fiduciary Security (the "Fiduciary Security Law") are partially unconstitutional. The court was ruling on a lawsuit arguing that it was a violation of constitutional rights for a fiduciary security certificate to have the same power as an executorial court decision.

The Fiduciary Security Law defines fiduciary security as a security right over moveable property (tangible or intangible) or immovable property, in particular buildings which cannot be encumbered under the provisions of Law No. 4 of 1996 regarding Mortgage (Hak Tanggungan) over Land and Property Related Thereto, as security for repayment of certain debts, which security gives a preference to the fiduciary security recipient over other creditors.