Implementation of Parate Executie on Fiduciary Guarantees After the Constitutional Court Decision

Abstract

Indonesia is a legal state, as stipulated in the Constitution of the Republic of Indonesia, namely the 1945 Constitution of the Republic of Indonesia, which governs all state activities and requires obedience to the law. One of the laws governing Indonesia is Civil Law. Indonesian Civil Law regulates all matters related to personal and property rights, including those involving individuals and legal entities. This law recognizes personal guarantees and movable guarantees, including fiduciary guarantees, which are defined in Law No. 42 of 1999 on Fiduciary Guarantees as the transfer of ownership rights to a tangible asset based on trust, with the condition that the owner of the asset remains in possession. Fiduciary guarantees, as stipulated in Law No. 42 of 1999, must be created through a notarized deed containing the phrase "DEMI KEADILAN BERDASARKAN KETUHANAN YANG MAHA ESA", which has a legal implication that fiduciary guarantees have the same executory power as a court judgment. The beneficiary of the fiduciary guarantee is granted the authority to execute the guarantee either through the courts or outside the courts (parate execution). However, in practice, this has led to numerous problems and inconsistencies with the law, as evidenced by the decision of the Bukit Tinggi District Court Number 31/Pdt.Sus.BPSK/2020/PN.BKT, which annulled a decision by the Consumer Dispute Resolution Body (BPSK) that had awarded a debt relief to a debtor whose four-wheeled vehicle, which was subject to a fiduciary guarantee, was taken forcibly by the creditor. In light of these problems, some Indonesian citizens have conducted a material review of Article 15(2) and Article 15(3) of Law No. 42 of 1999 on Fiduciary Guarantees. This review was subsequently settled by the Constitutional Court Decision Number 18/PUU-XVII/2019. The Constitutional Court Decision Number 18/PUU-XVII/2019 provided a new normative interpretation of Article 15(2) and Article 15(3) of the Fiduciary Guarantees Act, meaning that the execution of a fiduciary guarantee cannot be carried out immediately by the creditor. The impact of this decision on debtors is that it provides a solution to the frequent problem of forced seizure or removal of fiduciary guarantee objects. However, for creditors, it represents a barrier to executing fiduciary guarantees and poses a business risk.