Bankruptcy lawsuits decline by 54% in 2003

Rendi A. Witular, The Jakarta Post, Jakarta

Bankruptcy lawsuits have dropped significantly this year, which legal experts said indicated a growing distrust of the business community in the existing judicial system.

Bankruptcy litigation filed with the commercial court dropped by 54 percent to only 27 cases in the first nine months of the year compared to the same period last year, according to the Indonesian Association of Curators (AKPI).

AKPI deputy chairman Amir Abadi Jusuf said on Thursday that companies now felt more comfortable settling commercial disputes with the help of independent mediators rather than at court.

"This is an indication of distrust toward our murky legal system. Business players now think twice before deciding to take their cases to court," he said on the sidelines of a seminar on bankruptcy.

Another AKPI executive, Ricardo Simanjuntak, said that many of his clients refused to settle their commercial disputes at court, because there were a lot of uncertainties at court. Furthermore, they considered the fees they had to spend on lawyers were not worth the results.

For example, under the existing law, judges must deliver verdicts no later than 30 days after the first hearing. But, in practice they often violate this rule, leaving disputing parties with uncertainties, he said.

"Dealing with the court is just frustrating. Out-of-court settlements are more favorable nowadays because they are faster, less costly and more reliable. Mediation provides a win-win solution that satisfies both parties," he said.

Amir and Ricardo urged the government and legislators to immediately deliberate the revision of the Bankruptcy Law, because it had many inconsistencies and loopholes that could lead to misinterpretations and erroneous verdicts.

They also urged the government to sweep corrupt judges and lawyers out of the country's judiciary, as it would never be able to reform the legal system if corrupters remained.

Meanwhile, Erwin M. Malau, a senior judge at the Jakarta Commercial Court, confirmed the decline in the number of bankruptcy lawsuits filed with the court this year, but he disagreed this indicated a rise in distrust toward the judicial system.

"Yes, there is a decline in the number of bankruptcy lawsuits filed with the court, but this doesn't mean it can be used to discredit the court," said Erwin.

He explained the decline was merely because more business players this year had settled out-of-court.