Obligation to Use Indonesian Language in the Agreement

Question:

Are Indonesian citizens obliged to use the Indonesian language in the Agreement they made? What if the other Party is a foreign national? (Albert, Tangerang)

Answer: Fine, thank you for the question. Regarding the use of Indonesian, it is actually regulated in Presidential Regulation Number 63 of 2019 (“ Presidential Decree 63/2019 “) And Law No. 26 of 2009 (“ Law 63/2019 “). Article 26 Paragraphs 1 and 2 of Perpres 63/2019 state the following:

“1. The Indonesian language must be used in memoranda of understanding or agreements involving state institutions, government agencies of the Republic of Indonesia, Indonesian private institutions, or individuals who are Indonesian citizens. 2. The memorandum of understanding or agreement as referred to in paragraph (1) involving a foreign party is also written in the foreign party’s national language and / or English. “

Article 31 Paragraph 1 and 2 of Law 26/2009 also regulates the following:

“1. The Indonesian language must be used in memorandums of understanding or agreements involving state institutions, government agencies of the Republic of Indonesia, Indonesian private institutions or Indonesian citizens. 2. The memorandum of understanding or agreement as referred to in paragraph (1) involving a foreign party is also written in the foreign party’s national language and / or English. “

It can be seen that the two regulations actually agree in providing certainty that for the Memorandum of Understanding and Agreement involving parties from Indonesia it is obligatory to use Indonesian. In the event that there is a conflict between Indonesian and English in the agreement, referring to Article 26 Paragraph 4 of Perpres 63/2019 which applies must be interpreted in Indonesian. Next, what will happen if an agreement involves parties from Indonesia but violates the provisions above? In essence, it is based on applicable law in Indonesia, related to agreements, including in the realm of civil law. Related to the legal terms of the agreement itself is regulated in Article 1320 of the Civil Code (“ KUHPer “), Where from the Article it can be seen that the valid terms of the agreement include:

1. Agreed;
2. Competent;
3. Because – causes that are lawful;
4. Certain thing.

If the above legal conditions have not been fulfilled, the agreement will be legally flawed so that the agreement can be canceled or even null and void. However, this article will not explain the legal terms of the agreement in detail. In essence, if what is violated is the “agreed” or “competent” condition then the agreement can be canceled, while if what is violated is the condition of “lawful causes” or “certain things” then the agreement is null and void by law. Non-conformity or violation of the applicable law on an agreement results in the failure to fulfill the conditions of “lawful causes”. So that on this matter, the agreement can be considered as null and void or deemed to have never existed. That is the explanation that we can convey. If you have further questions, please contact my Legal Customer Service so that you can be connected with our experts!