CASE OF NON-PERFORMING LOANS DUE TO THE DECLINE IN THE RUPIAH’S VALUE

Whereas according to the provisions of Article 1756 (1) of the Civil Code, the amount that the debtor must return is the “nominal” amount of the loan money. If, before the said money is returned, there has been a decline in the value of the rupiah, then the debtor is only obliged to return the money they have previously received at a calculation equivalent to the “official exchange rate” at the time of payment, ex Article 1756 (2) of the Civil Code.

Whereas the Supreme Court in the above matter has outlined in “permanent jurisprudence” (standard jurisprudence) that judges, in facing the problem of the decline or changes in the value of the rupiah (devaluation or sanering), should affirm that the risk arising from the decline/change in the value of the rupiah, must be borne by both parties equally (fifty-fifty). (Supreme Court Decision No. 410 K/Sip/1953 and MA-RI No. 380 K/Sip/1975).

à Supreme Court of the Republic of Indonesia Decision No. 4434 K/Pdt/1986, dated 20 August 1988.

Source:

Compilation of Supreme Court Abstract Legal Decisions on the Law of Debts and Receivables, By: Ali Boediarto, S.H. Publisher: Indonesian Judges Association, Page 78.

Best regards,

Fredrik J. Pinakunary