Overview

Supreme Court Regulation 2 of 2015 (SC Reg 2/2015) established the Small Claims Court, which operates as part of the District Court,1 but according to a modified set of rules.

The Small Claims Court has jurisdiction to hear civil disputes:2

  • that involve no more than Rp200 million (currently about US$15,000);
  • that raise questions of contract or tort;
  • that are not required to be heard before a special court (such as a tax, commercial or industrial relations court);
  • that do not involve land; and
  • where both plaintiff and defendant reside within the same Small Claims Court jurisdictional area.3

Hearings are conducted before one judge only.  The only legal recourse following judgment at first instance is the filing of an objection, the decision on which is final.  Proceedings are limited to 25 days at first instance and seven on objection.  

The Small Claims Court should provide a more efficient and cost-effective forum for those private parties bringing or defending very small claims.  We hope that should the Small Claims Court succeed in absorbing a large number of such claims, this will ultimately reduce the case burden on courts higher up in the judicial hierarchy.  

However, there is likely to be no direct impact on commercial parties involved in medium and large disputes due to the extremely low claim cap (about US$15,000). 

Background

The Government’s Medium-Term National Development Plan (2015–2019) called for the establishment of a court to settle simple financial disputes expeditiously.

According to Supreme Court judge, Syamsul Maarif, the Government was concerned by a 2014 World Bank survey, which ranked Indonesia 114th out of 189 countries for “ease of doing business” (neighbouring Singapore ranked 1st).  The survey considered, among other things, the time and costs involved in resolving contractual disputes.4

Procedure

Filing

A plaintiff may initiate a claim by filing a form with the relevant District Court and paying a registration fee, unless exempted.  The form must contain details of the plaintiff and defendant (who must both be located in the jurisdiction of the relevant Small Claims Court) as well as the amount claimed.  The plaintiff may seek to explain the purported merits of their case and must attach legalised documentary evidence. 

A claim may only be made by a plaintiff against one defendant (or defendants who share the same legal interest in the relevant dispute).  

Preliminary examination

The judge will first assess the complexity of the dispute and whether the claim is beyond the jurisdiction of the Small Claims Court.  An order that the court does not have jurisdiction to hear the claim cannot be appealed.  However the plaintiff may file the same claim with the relevant District Court.5

Pleadings

The plaintiff and defendant may be self-represented or have legal representation. 

After the preliminary examination, the judge must determine the date of the first hearing.  (SC Reg 2/2015 does not specify the number of hearings or when the first hearing must be conducted.)  Unlike in general civil proceedings, parties may not file provisional claims, exceptions, counterclaims, interventions, replies, rejoinders or conclusions.

If the plaintiff does not appear at the first hearing, the claim will be dismissed.  If the defendant does not appear, the court will issue a second summons.  If the defendant again fails to appear, the judge will decide the claim in the defendant’s absence.  If the defendant attended the first hearing but not, without a valid explanation, the second, the judge will decide the claim in the defendant’s absence.  (SC Reg 2/2015 does not require default judgment in the plaintiff’s favour in such circumstances.)

Amicable settlement      

Parties are encouraged to settle amicably.  At the first hearing, the judge is required to remind the parties to do so.6  Unlike in other civil proceedings, there is no compulsory mediation.7  If the parties settle amicably, the judge must issue a deed of amicable settlement, which cannot be appealed.

Decision

The judge must read the decision at first instance in open court and inform the parties of their right to file an objection.  If the parties do not appear on the decision reading date, the bailiff must notify the parties in writing of the judge’s decision within two days of this date.     

Legal recourse

Either party may file an objection within seven working days of the decision being read by the judge or notified by the bailiff.8  Objections must be addressed to the chairman of the relevant District Court.  A counter-memorandum of appeal may be filed with the same court. 

A panel of judges must be formed to review an objection within one working day of the objection being assessed as complete,9 and must issue a decision within seven working days of the panel being formed.10 

Decisions on objections, and decisions for which there are no objections, are final.  SC Reg 2/2015 expressly provides that there is no further legal recourse available to either party.11

Enforcement

The parties must enforce a final decision.  If they do not, the decision must be enforced in accordance with ordinary civil procedure rules. 

Conclusion

The establishment of the Small Claims Court would appear to be a positive development.  It provides a specialized forum for dealing with very small claims, which will hopefully reduce the case burden of courts higher up in the judicial hierarchy.  Only time will tell.

We will continue to monitor the implementation of SC Reg 2/2015 and issue further updates as more information becomes available.