In one of the most significant cases of 2013, a West Jakarta District Court decided that Bahasa Indonesia must be used in any contract involving an Indonesian party.
In PT Bangun Karya Pratama Lestari v. Nine AM Ltd. (451/Pdt.G/2012/PN.Jkt Bar.), an agreement between the parties was declared invalid because it was drafted in English only. The Court referred to article 1320 of the Civil Code, which requires that contracts not be in breach of prevailing laws. The Court then noted that the contract was in breach of article 31 of Law on the National Flag, Language and Coat of Arms, and National Anthem (Law No. 24 of 2009), which requires that Bahasa Indonesia be used in any contract involving Indonesian government, entities and individuals.
Nine AM Ltd. filed an appeal against the West Jakarta District Court’s decision on 14 October 2013. The appeal proceedings will be followed with keen interest. Regardless of the outcome, however, it is advisable to adopt a conservative approach - the Law on the National Flag, Language and Coat of Arms, and National Anthem has been in force since 9 July 2009, and any contracts entered into on or after this date should be drafted in Bahasa Indonesia. Parties will often prefer to draft a bilingual agreement and nominate the Bahasa Indonesia provisions as the operative clauses.