Indonesian Insights

On January 12, 2012, the United States Bankruptcy Court for the Southern District of New York  entered an order formally recognizing the Suspension of Debt Payment Obligations (PKPU) proceedings before the Central Jakarta Commercial Court, in connection with PT Arpeni Pratama Ocean Line Tbk. and pursuant to Chapter 15 of Title 11 of the United States Code.

Arpeni sought the decision of the United States Bankruptcy Court in order to ensure that holders of its US dollar bonds would, as matter of both US and Indonesian law, be bound by the outcome of the PKPU proceedings in Indonesia.

Michael Carl, foreign legal consultant at SSEK in Jakarta, provided an expert opinion to the United States Bankuptcy Court together with Ira Eddymurthy, a partner of the firm.  Michael noted that, “This is the first instance in which a United States bankruptcy court has recognized equivalent proceedings in Indonesia. ”

“In reaching its decision, the US Bankruptcy Court applied tough standards required under Chapter 15 of the United States Code.  Arpeni’s success in these proceedings marks an important development for Indonesian law.”

As noted in Bloomberg, “the ruling may set an example for future Indonesian debt restructuring decisions, whereby a foreign court will accept a debtor’s home jurisdiction.”

Michael Carl and SSEK also act for Arpeni in its debt restructuring in Indonesia, widely believed to be one of the most complicated in the history of Indonesia.

For more information, please contact Michael Carl and Ira Eddymurthy of Soewito Suhardiman Eddymurthy Kardono (telephone +62-21-5212038 or michaelcarl@ssek.com or iraeddymurthy@ssek.com).

Full Press Release is available Arpeni Chap 15 final order press release 130112 v3.