B&A Client Seminar on “Some Issue in International Commercial Contracts”


On 18 December 2014, Budidjaja & Associates (B&A) held a Client Seminar to discuss some issues to consider in preparing international commercial contracts. The B&A staff members who presented at the seminar were Mr. Miles Young (Special Counsel), Mr. Jono Yeo (Senior Associate), and Ms. Diana Kusumasari (Associate).

Mr. Young opened the seminar by referring to the increasing number of complex, international commercial contracts involving Indonesian parties due in part to the growing ease of doing business across borders. He explained that while cross-border transactions represent significant opportunities, they also carry the risk of a conflict between different laws and legal systems when a dispute arises. He argued that international commercial contracts should clearly state the system of law to apply in the case of a contractual dispute and the place, court or tribunal in which the dispute is to be adjudicated, in order to manage this risk and increase business certainty and predictability. Mr. Young then proceeded to highlight some key issues for parties to consider when identifying the choice of law for their contracts and the choice of forum for adjudicating any contractual disputes.

Mr. Yeo discussed Article 31 of Law 24/2009 on National Flag, Language, Emblem and Anthem, which requires contracts involving Indonesian parties to be in Bahasa Indonesia. Mr. Yeo noted that while the Ministry of Law & Human Rights had stated in 2009 that contracts in the English language alone are not void for being in breach of Article 31 of Law 24/2009, the 2012 case of PT Bangun Karya Pratama Lestari v Nine AM Ltd (Decision No. 451/Pdt.G/2012/PN.Jkt.Bar.) decided otherwise and confirmed the Bahasa Indonesia requirement as stipulated under Article 31 of Law/2009. He then explained that this decision was confirmed by the Court of Appeal on 7 May 2014 in Decision No. 48/PDT/2014/PT.DKI.

In concluding the seminar, Ms. Kusumasari discussed the four elements which are required to be fulfilled in order to establish a valid and binding contract – namely, the elements of consent, capacity, lawful cause and definite object.

The B&A Client Seminar series are designed to give clients an opportunity to learn more about key legal issues affecting their businesses. The series also give clients the chance to network with other attendees and with B&A lawyers.

If you are a B&A client and would like to be invited to the Client Seminar series, please contact Daisy Enggina at [email protected].

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