Finishing touches being put on bankruptcy law amendments
Finishing touches being put on bankruptcy law amendments
JAKARTA (JP): The government will submit its draft of
amendments to the 1998 Bankruptcy Law to the House of
Representative in August, according to Minister of Law and
Legislation Yusril Ihza Mahendra.
Yusril said here on Friday the draft amendment would receive a
final touch next Wednesday. Following this, the government will
give the public the opportunity to comment on the amendment
through a month-long series of seminars and debates before the
draft is submitted to the House for deliberation in August.
"An important new item being added to the final draft
amendment is the dissenting opinion clause," he said during a
meeting with the Bankruptcy Litigation Lawyers Club (BLLC) at his
office.
He said the final draft amendment stipulated verdicts reached
by judges of the Bankruptcy Court must also contain the
dissenting opinions of judges opposed to the verdicts.
Court cases in Indonesia are decided by a panel of three
judges. Under the current law, the court verdicts sometimes only
reflect the opinion of two judges. If the third judge does not
agree with the ruling, he or she must still sign the verdict.
Yusril said the legal system in Indonesia as a whole had not
adopted the practice of issuing dissenting opinions, but because
the bankruptcy court was special an exemption had been made.
"We made a special law for those courts which handle special
cases such as bankruptcy cases," Yusril told members of BLLC and
several journalists.
He said dissenting opinions also would be issued at the
Supreme Court level for bankruptcy cases.
The idea of issuing dissenting opinions arose after the first
four independent ad hoc judges appointed by the government in
early 1999 refused to serve in the Bankruptcy Court if
dissenting opinions were not made known to the public.
The government was unable to meet this demand because it was
not accommodated in Indonesia's legal system.
The normal procedure for Indonesian courts is for dissenting
opinions to be kept in a confidential court book, and the process
by which the judges reach a verdict is not disclosed because this
is believed to have the potential to create further arguments and
confusion.
However, dissenting opinions recorded in the confidential
court book are attached to the verdict documents of cases
appealed to the Supreme Court.
The members of BLLC agreed with Yusril the dissenting opinion
clause was necessary to add transparency to the process of court
decisions.
"Such a dissenting opinion clause is important to prevent KKN
(acronym for corruption, collusion and nepotism) in the courts,"
said Denny Kailimang.
Denny also said the bankruptcy law should strengthen the
capital market law, which was designed to protect the interests
of investors.
"There was one case in the past where public investors were
still trading the shares of a company that was already on the
verge of bankruptcy," he said, adding that those investors who
bought shares suffered great losses.
He said the bankruptcy law should provide leverage to allow
capital market watchdog Bapepam and the Jakarta Stock Exchange
(JSX) to take prompt action against companies under the threat of
bankruptcy.
BLLC chairman Hotman Paris Hutapea said the bankruptcy law
should clearly stipulate when the JSX must suspend or delist
companies entangled in the bankruptcy courts.
"Can they (JSX) take action on the lower courts' bankruptcy
rulings or do they have to wait until the Supreme Court's
ruling," he asked?
Hotman also added the Indonesian bankruptcy law was too
liberal, saying one small creditor could file a bankruptcy
petition against a company.
"Our bankruptcy law is more liberal than that of the United
States, which requires the consent of the majority creditors to
file a bankruptcy petition against a company," he said.
Another practicing bankruptcy lawyer, Lucas, said the current
bankruptcy law fell short of properly stipulating the authority
of a private court receiver.
"The court receiver, especially for a bankrupt public company,
is confused by all the complications arising from the lack of
synchronicity between the bankruptcy law and the existing capital
market regulations and rules," Lucas said.
"These complications have in fact made the court receiver
afraid of taking the necessary action to do its job," he said.
The court receiver is an independent party -- required to be a
bankruptcy lawyer or a public accountant -- appointed to take
over the management of a company declared bankrupt or under the
threat of bankruptcy.
The court receiver also must manage the liquidation of a
bankrupt company.(udi)