Indonesia
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. A freezing order (sita jaminan) prohibiting the dissipation and/or transfer of assets (situated within the jurisdiction) to a third party is available. It will remain in place until a specified time, for example in accordance with the terms of an existing Court order (for example, by making payment) or until a further order of the Court is made (for example, an execution order may subsequently be issued to auction off any seized assets). It is important to note that an application for a freezing order will only be granted if there is a reason to believe that the respondent is attempting to dissipate or transfer the ownership of their assets to a third party.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Generally, no other orders (such as an asset disclosure order) are made in conjunction with the freezing order.
3. Briefly what is the relevant legal test?
The applicant has to establish:
(i) a good arguable case in the underlying substantive claim or prospective claim;
(ii) the respondent has assets within the Indonesian territory;
(iii) there is a real risk of unjustified dissipation (for example, for the purposes of frustrating or impeding the satisfaction of a judgment or award); and
(iv) that it is just and convenient to grant the freezing order.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant must identify in its statement of case, the factors which give rise to the risk that their lawsuit will be meaningless, if the assets of the respondent are not put under sita jaminan (a freezing order). In Indonesia, there is no discovery process and hence the burden is on the applicant to identify the assets of the respondent to be covered by the freezing order. The Court will evaluate the application taking into account submissions from the respondent, before granting or rejecting the application for a freezing order.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
No. There is no obligation to provide any form of security when applying for a freezing order under Indonesian law. The Court only requires security if the decision is immediately executable pending appeals to higher Courts.
6. Can it be sought against third parties?
No. A freezing order can only be made against the respondent to the relevant underlying litigation and not against a third party. However, if assets are in the possession of a third party (for example, if the respondent’s money is deposited in a bank), then the freezing order also becomes binding on the third party but only after the third party receives formal notification of the freezing order from the Court bailiff.
7. What assets are covered by a freezing (or equivalent) order?
Assets within Indonesian territory, including immovable property such as real property (for example, land and buildings), movable property (such as ships, cars, motorcycles, furniture) and intangible assets (such as, bank accounts).
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
No. Under the principle of state sovereignty, a freezing order in Indonesia is only available to support proceedings in Indonesia.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
In theory yes, but in practice there is no precedent where an Indonesian Court has issued a freezing order to support arbitration proceedings.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
Normally, a freezing order is sought by the applicant in their statement of claim in the underlying claim. The Court can however make a freezing order at any stage of the proceedings up to the delivery of a final judgment, because the freezing order must be declared to be valid and binding upon the parties within the judgment.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Where the assets subject to the freezing order are intangible assets (such as bank accounts), there is no exception to the rule that the respondent is prevented from using those assets in any manner whatsoever. However where the assets in question are movable or immovable assets (such as land, buildings or cars), a respondent is still permitted to use such assets, subject to there being no dissipation or transfer of a physical possession and/or the ownership of such assets to a third party.
12. What happens after a freezing (or equivalent) order is granted?
After a freezing order is granted, the Court bailiff will locate the assets and make, what is called, a minute of security seizure (berita acara sita jaminan,) at which point the dissipation or transfer of such assets will be prevented, as well as the use of any intangible assets such as bank accounts. If assets are in the possession of a third party, the Court bailiff will formally notify the third party and ask the third party to acknowledge the freezing order in the minute.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant will be ordered to pay the costs of the application for the freezing order.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
If the assets of a third party are included in the freezing order, the third party may challenge the freezing order by filing a lawsuit with the same district Court.
15. What are the consequences of breach of a freezing (or equivalent) order?
A party who violates a freezing order can be prosecuted criminally under Article 231 of the Indonesian penal code. This applies equally to applicants, respondents and any third party who has had notification of the order.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
No.
17. Can a freezing (or equivalent) order be enforced abroad?
No. In principle the freezing order is only enforceable over assets located within Indonesian territory.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
No. Judgments of foreign Courts (including interim orders) cannot be enforced in Indonesia.
Contacts
Stefanus Haryanto Partner Adnan Kelana Haryanto & Hermanto Jakarta, Indonesia stef@akhh.com www.akhh.com Reginald Aryadisa Dharma Associate Adnan Kelana Haryanto & Hermanto Jakarta, Indonesia reginald@akhh.com www.akhh.com Joshua Michael Associate Adnan Kelana Haryanto & Hermanto Jakarta, Indonesia joshua@akhh.com www.akhh.com
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