Review of Indonesian Courts under the Supreme Court

Courtesy of bdeslaw.com

By Mahareksha Dillon & Dewi Savitri Reni

Article 24 of the Indonesian Constitution stipulates that two institutions have judicial authority in the country, namely the Supreme Court (Mahkamah Agung or “MA”) and the Constitutional Court (Mahkamah Konstitusi or “MK”).

These two institutions are independent of one another. Law No. 48 of 2009 regarding Judicial Authority (“Judiciary Law”) stipulates the authority of each institution as administrators of Indonesia’s judicial system. As stipulated in Article 20 of the Judiciary Law, the Supreme Court is the highest judicial institution and the final court of appeal in Indonesia with regard to criminal, civil, religious, military and state administrative courts, and any special courts established by laws enacted by the People’s Representative Assembly (Dewan Perwakilan Rakyat or “DPR”).

The Supreme Court has the authority (a) to hear and rule on all final decisions made by appellate courts that have authority over criminal, civil, religious, military and state administrative laws; (b) to review the legality of regulations (but not laws enacted by the DPR); (c) to provide legal explanations, recommendations and advice to government institutions; and (d) to provide judicial reviews (peninjauan kembali) of final and binding court decisions, but only if certain requirements are satisfied. Read more »

SSEK to Speak at M&A Event

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SSEK’s managing partner, Rusmaini Lenggogeni, is speaking on Wednesday, April 23, at a complimentary event for Chinese companies investing or considering an investment in Indonesia.

The event, M&A Periscope, is being organized with Deloitte Indonesia. Speakers will examine the legal and tax implications of M&A transactions in Indonesia, in addition to exploring post-merger integration issues.

Ms. Lenggogeni will look at the legal implications of mergers and acquisitions. Ms. Lenggogeni has more than 20 years of experience practicing corporate and commercial law. She regularly advises multinationals on cross-border deals and specializes in corporate mergers and acquisitions, real property leases, taxation, capital markets, banking and corporate matters.

M&A Periscope will take place Wednesday, April 23, from 2:30 p.m. to 5:30 p.m. (registration starts at 2 p.m.). The event is being held at Deloitte Indonesia’s Jakarta offices at The Plaza Office Tower, 32nd Floor.

For more information, go here.

Legal Alert February 2014

Please find attached the latest Legal Alert for February 2014.

SSEK’s Legal Alert is a monthly survey designed to keep you up to date with the latest legal developments in Indonesia.

Click here: Legal Alert February 2014

SSEK Named 2014 Indonesian Law Firm of the Year

Who's Who Legal Firm of the Year

Soewito Suhardiman Eddymurthy Kardono has been named the 2014 Indonesian Law Firm of the Year by Who’s Who Legal. This is the third straight year SSEK has received this honor and the sixth overall. It was also recognized in 2013, 2012, 2008, 2007 and 2006.

SSEK’s partners and advisers received sufficient nominations from their clients and peers to be listed by Who’s Who Legal seven times across seven practice areas. Lawyers from SSEK were recognized more times than those from any other firm in Indonesia.

Founding partner Ira A. Eddymurthy was recognized for her outstanding work in three practice areas: banking, capital markets, and mergers and acquisitions. Senior foreign adviser Darrell R. Johnson was noted for his work in the energy sector, while Michael D. Twomey was recognized for project finance. Richard D. Emmerson was recognized by Who’s Who Legal as a leading practitioner in management labor and employment. Read more »

To Boldly Go Where No Man Has Gone Before: Commercial Activities under the Indonesian Outer Space Law

Shuttle Launch - Courtesy of NASA

By Stephen Igor Warokka and Bambang Dhanisworo

Space … the final frontier. Mankind entered the Space Age when Sputnik was launched into orbit in 1957. During the Cold War, the United States and the Soviet Union engaged in a full-fledged competition for supremacy in outer space through the Space Race. It was a race that Indonesia sat out. Now Indonesia is embracing the idea that space is the final frontier, providing opportunities in a wide array of areas, including technological advancement, new energy sources, and tourism.

Indonesia recently enacted Law No. 21 of 2013 regarding Outer Space (Outer Space Law). This follows Indonesia’s ratification of the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies (Space Treaty, 1967) and its three implementing regulations: Convention on International Liability for Damages Caused by Space Objects (Liability Convention, 1972); Convention on the Registration of Objects Launched into Outer Space (Registration Convention, 1975); and Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space (Astronaut Agreement, 1968).

The Outer Space Law regulates outer space activities and their related aspects, e.g., security and safety, responsibility and indemnification, insurance, countermeasures against falling space objects (or debris),  and the rescue of astronauts. The purpose of the law is, among others, to regulate and optimize the exploration and utilization of outer space and to protect the state and its citizens from any negative impacts resulting from this exploration and utilization. Read more »

Primary Parties in Non-Banking Finance Institutions

OJK

By Indrawan D. Yuriutomo

Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan, or “OJK”) has introduced a new concept, known as Primary Parties in Non-Banking Finance Institutions, along with certain requirements that such Primary Parties must fulfill.

Primary Parties, according to recent OJK regulations, are those who manage or supervise and have significant influence over Non-Banking Finance Institutions; i.e., insurance companies, pension funds, finance companies, and credit guarantee companies.

The OJK requires that all Boards of Directors of Non-Banking Finance Institutions submit a list of Primary Parties to the OJK before March 23, 2014. Failure to do so will result in such Primary Parties being required to retake the fit and proper test. Read more »

SSEK to Speak at Employment Law Seminar

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Indrawan Dwi Yuriutomo, a senior associate at SSEK and an employment law specialist, is participating in the 2nd Annual Indonesia HR & Employment Law Executive Program organized by Clariden Global.

Indrawan is speaking on March 27, the second day of the two-day conference at the Shangri-La Hotel in Jakarta.  His sessions will cover “Alarming Trends Regarding Employment of Expatriates in Indonesia and Secondment Arrangements” and “Handling Employment Disputes, Termination, Dismissal and Redundancy in Indonesia.”

For more information and to register for the seminar, please click here.

SSEK Advises Woori Bank on Acquisition of Stake in Listed Indonesian Bank

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Soewito Suhardiman Eddymurthy Kardono acted as Indonesian counsel to Woori Bank of South Korea in its purchase of a 33 percent stake in Indonesia’s Bank Himpunan Saudara 1906 for 713.1 billion Rupiah, about US$60 million.

Securing approval from Indonesia’s central bank, Bank Indonesia, for the purchase took about 18 months amid an evolving regulatory environment for bank acquisitions in the country.  Singapore’s DBS Group last year cancelled the planned acquisition of an Indonesian bank after it failed to receive Bank Indonesia approval for the deal.

Bank Saudara is listed on the Indonesia Stock Exchange, so this complex deal also required the navigation of capital market rules for bringing in a foreign bank as a significant shareholder.

Woori Bank has had a presence in Indonesia since 1992 through Bank Woori Indonesia, which deals mainly with Korean companies operating in Indonesia. With this purchase of a 33 percent stake in Bank Saudara, the Korean lender hopes to increase its presence in the dynamic Indonesian market.

Bank Saudara is part of the Medco Group, a business conglomerate involved mainly in the energy sector.

Partner Fahrul S. Yusuf and senior associate Bezaliel E. Basuki led the SSEK Team handling the deal.

What Companies Should Know about the New Social Security System in Indonesia

businessman

By Indrawan Dwi Yuriutomo

Starting this year, companies in Indonesia are required to register employees in the Indonesian Government’s health and employment social security programs. This is part of an effort by the Government to expand social security benefits to more of the population, but questions remain about the implementation of the new programs and their effect on business.


What is BPJS?

Indonesia’s Law on National Social Security System (System Jaminan Sosial Nasional or “SJSN”) was passed in October 2004 and marked a major milestone in the reform of the country’s social security system.

As part of the law the Indonesian Government established the Social Security Organizing Body (Badan Penyelenggara Jaminan Sosial or “BPJS”). There are two separate BPJS in Indonesia, one managing health care and the other overseeing employment social security. Read more »

Fee Guidelines for Administrators and Receivers in Indonesian Bankruptcy Proceedings

Bankruptcy

By Dewi Mayangsari and Dewi Savitri Reni

Law Number 37 of 2004 regarding Bankruptcy and Suspension of Debt Payments (the “Bankruptcy Law”) stipulates that the fees for Administrators and Receivers are decided after the bankruptcy or the Suspension of Debt Payment Obligations (Penundaan Kewajiban Pembayaran Utang or “PKPU”) is concluded.

While there is some subjectivity in determining the fees of Administrators and Receivers, the fees must follow the guidelines set by the Ministry of Law and Human Rights (“MOLHR”) in Regulation Number 1 of 2013 regarding Guidelines for Fees of Receivers and Administrators (“MOLHR Reg 01/2013″). Under this Regulation, the fees for Administrators and Receivers depend on the particular case, as elaborated on below.

While establishing fee guidelines, MOLHR Reg 01/2013 also seems to have discouraged creditors from pursuing bankruptcy proceedings, for fear that they will be saddled with the Receiver fees. Read more »