On 31 August 2015, the Supreme Court (SC) affirmed a decision of the Jakarta High Court (JHC) on the interpretation of Indonesia’s Language Law,1 which governs agreements with Indonesian parties.
In short, the result is that an agreement with an Indonesian party can be declared null and void purely for the reason that there was no Indonesian language version at the time the agreement was signed.
The SC has yet to make available the reasons for its decision. We therefore refer to our Client Update on the JHC decision for further analysis.
Under Indonesian law, SC decisions are final and binding (unless a successful application for judicial review is made).
At this stage, we would continue to recommend that agreements with Indonesian parties:
- are drafted in the Indonesian language only or in bilingual form (both an Indonesian language version and an English or relevant foreign language version); and
- state which version prevails in the event of any inconsistency.
We will continue to monitor developments and issue further updates as more information becomes available.