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Jakarta Post

Court rule may discourage lending operations

  • Narada Kumara, Muhammad Ghiffari and Febriantoro Suardy

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Jakarta   /   Tue, March 10, 2020   /  07:06 pm
Court rule may discourage lending operations Nevertheless, my own definition of comfortable retirement is a lifestyle that is debt-free, enable my older self to be involved in broad range of leisure activities and purchases of goods as well as having occasional domestic and international travel. (Shutterstock/File)

The Constitutional Court decided in early January to reinterpret the enforcement mechanism of fiduciary security. In a 127-page decision, the panel of judges unanimously agreed that Article 15 paragraph (2) and Article 15 paragraph (3) of Law No. 42/1999 on fiduciary security were unconstitutional unless they were interpreted in the event a debtor/ fiduciary grantor (a party who give a fiduciary security right) objects against the occurrence of a breach of contract (default) and delivers a fiduciary security object voluntarily and the enforcement action mandates an assistance from the court; and a creditor needs a debtor’s admission of such default. Otherwise, the determination must be made through a legal remedy. The petitioners, including a debtor/ fiduciary grantor who agreed to make their car as a fiduciary security of their vehicle loan, had requested the Constitutional ...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.