Creating Clarity in International Commercial Contracts for Guaranteeing Legal Certainty in Indonesia

Abstract

The enforcement of the obligation to use the Indonesian language in international commercial contracts, which is a mandate from Act No. 24 of 2009 regarding the National Flag, Language, Coat of Arms, and Anthem, has become an issue and been brought to court. The Supreme Court finally decided in 2015 that an English language international commercial contract is void. The decision has provided clarity on the controversy after seven years of enforcing this obligation due to the lack of implementing a regulation that could further explain the phrase "must" in the provision of Article 31 of said law, which led to multiple interpretations among stakeholders. Although precedent is not recognized in Indonesia, this issue still brings uneasiness among investors, especially foreign ones. In facing this issue, this article discusses what steps must be taken by investors to avoid a lawsuit demanding the annulment of their foreign language contracts. Government Regulation 57/2014 (2014), as an ancillary of Act 24/2009, is silent on the use of the Indonesian language in international commercial contracts. This article therefore argues that a presidential decree to implement the regulation as mandated by Article 31 of Act 24 of 2009 should be enacted immediately to provide legal certainty to foreign investors who may have contracts with Indonesian private parties.