Civil Litigation in Indonesia – Overview & Recent Trends

Civil Litigation Process
 
Generally, the litigation process in a civil case in Indonesia proceeds as follows: (i) the plaintiff registers a suit with the District Court’s clerk’s office; (ii) the court then informs the defendant along with an order to appear in court on the first hearing day; (iii) on the first hearing day the judge orders the parties to select a mediator in order to resolve the dispute through mediation; (iv) if the mediation process fails to resolve the legal dispute, the mediator returns the matter to the judge in order to make a ruling thereof; (v) the defendant is then ordered to tender a response to the plaintiff’s claim; (vi) after receiving the defendant’s response, the plaintiff is given the opportunity to submit a rejoinder in order to respond to the defendant’s response; (vii) after receiving the plaintiff’s rejoinder, the defendant is given the opportunity to respond to it in a counterplea; (viii) after the response and counter response process stages have been completed, the judge will order the plaintiff to submit the relevant evidence, including, if so desired, witnesses in support of the arguments of the claim; (ix) the defendant is then given the opportunity of rebuttal by means of written evidence or witness testimony; (x) each of the parties is given the opportunity to submit their closing arguments; (xi) after receipt of the closing arguments, the court renders its judgment and announces it at the final hearing.   In accordance with Supreme Court rules, a civil case must be resolved and ruled upon by a District Court within a period of six months.   If for whatever reason a case cannot be completed within a period of six months, the Chief Justice of the District court must report the reasons to the Chief Justice of the relevant High Court.
 
Appeals from the District Court proceed to the High Court, and then to the Supreme Court at the Cassation stage, and in certain circumstances to a further Case Review stage.  For certain types of disputes, a number of specialist courts exist that replace the District Court (and sometimes appeal directly to the Supreme Court) in the process described above, some of these are the Commercial Court for bankruptcies, the Labor Court, and the Administrative Court.
 
Lawsuit Basis: Breach of Contract & Tort
 
In general, a civil suit filed in the District Court must be based on one of the two following legal reasons: breach of contract or unlawful acts (tort).   
 
The suit must be brought in contract if a contractual relationship exists between the parties, and one of the parties believes that they have incurred damages as a result of violations of contractual provisions.   On the other hand, if there was no prior contractual relationship between the parties, then if one of the parties believes that they have incurred damages through actions of the other party, the claim must be based on tort.  Alternative claims in contract and/or in tort are not possible.
 
In unlawful acts, a plaintiff must prove the following: the occurrence of an unlawful act, the occurrence of fault or negligence, the occurrence of a monetary loss and the existence of a casual relationship between the unlawful act and the loss suffered by the plaintiff.   
 
Indonesian law permits plaintiffs to file claims for material and immaterial damages.   Material damages include economic losses, costs and financial losses incurred.   Immaterial damages include suffering due to the loss.   Indonesian courts possess a very broad authority to grant compensation for damages of these types, in amounts deemed proper based on the requests of the plaintiffs, the arguments, and the evidence submitted by the parties.
 
There is a time limit for plaintiffs to be able to bring a suit in Indonesian courts.   The principle is that a lawsuit may be filed within 30 years of the occurrences of the intended incident.   This time limit of 30 years is valid for a large portion of the cases of unlawful acts based on fault or negligence in Indonesia.
 
Evidence & Witnesses
 
Documentary evidence is the one most frequently used.   The parties are however free to submit various forms of other permitted types of evidence, which support their positions.  The parties may for example submit expert testimony, which can provide evidence to the judicial panel on matters that are technically complicated, and may be subjected to cross-examination.
 
Indonesian courts do not recognise a “pre-trial discovery procedure.”  However, the rules of civil procedure permit the parties to obtain specific evidence.   If the opposing parties disregard these orders, then a court may draw the conclusion that such items of evidence are not favorable to the parties who disregard such orders.   Even though there is no pre-trial discovery, the parties have the opportunity to examine the evidence submitted by the opposing parties during the evidence stage.   The possibility exists to question the origins and legality of written evidence submitted by the opposing parties, and based on this procedure, courts may examine and determine whether the documents, the legality of which is being questioned, may or may not be used as evidence.  Indonesian courts also have the power to summon witnesses to give testimony in court or to order the submission of certain documents to be entered as evidence.
 
Issues & Considerations
 
Foreign plaintiffs often have a perception that they lose cases in Indonesia due to inappropriate conduct by the courts, while, in fact, the reasons are usually more closely linked to a lack of understanding of the Indonesian legal system and insufficient documentary preparation.  As such, it is increasingly important for foreign plaintiffs to understand the Indonesian dispute resolution process rather than attempting to import western legal concepts that are often not recognised by the Indonesian legal system.
 
Due to the differences of legal systems and legal realities, foreign clients need to have a close working relationship with their Indonesian counsel to better understand any legal impact and options available under Indonesian law (which might not be similar to the impact and options in their own jurisdictions in the same situation), so that results and options can be realistically analysed and also commercially “translated”.
 
Considering this, it is important to work with counsel who can help make a realistic analysis of the legal position and how Indonesian courts would decide the relevant legal issues.  And, in case a dispute does arise, ensure that the client is involved, and obtains reports, on all stages and developments of the proceedings in order to issue instructions as and when needed.  Whilst, the traditional approach adopted by Indonesian litigation firms was, and more often than not still is, that once the lawyer has been instructed, reports are very rare and the lawyer will act as he deems necessary based on his own discretion, and might as a result commit clients to legal liabilities without further, or confirming, instructions.
 
Mohamed Idwan (‘Kiki’) Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS).  He graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Shipping Law from the University of Hamburg.  Dr. Ganie has more than 30 years of legal experience, and specialises in commercial transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number court and arbitration proceedings.  His expertise covers general corporate/company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance.
 
Mohamed Idwan Ganie can be contacted by phone on +62 21 831-5005, 831-5025 or alternatively via email at ganie@lgslaw.co.id