Reinforcing Creditor Protection: The Imperative for The Cross-Border Insolvency Regulation

  • Authors

    • Daniel Hendrawan Universitas Katholik Parahyangan
    • Bernadette M. Waluyo Universitas Katholik Parahyangan
    • Johannes Gunawan Universitas Kristen Maranatha
    https://doi.org/10.14419/nngsr855

    Received date: August 6, 2025

    Accepted date: September 19, 2025

    Published date: November 2, 2025

  • Bankruptcy Law; Creditor Protection; Cross-Border Insolvency; UNCITRAL Model Law.

  • Abstract

    The rapid expansion of globalization has significantly increased cross-border economic activities, intensifying legal complexities in insolvency cases involving multinational entities. In Indonesia, Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations governs domestic insolvency but lacks explicit provisions addressing cross-border insolvency. This regulatory gap exposes Indonesian creditors to heightened legal uncertainty and potential financial losses, particularly when debtor assets are located abroad and foreign ‎proceedings are not recognized domestically.‎

    This paper critically examines the extent of legal protection afforded to Indonesian creditors in cross-border insolvency scenarios. ‎It evaluates the relevance and potential adoption of the UNCITRAL Model Law on Cross-Border Insolvency as a framework for reform. ‎Through a comparative analysis of Indonesia’s legal regime with that of Singapore and the Philippines, both of which have adopted the ‎Model Law. The study underscores the benefits of harmonized international insolvency procedures. Findings reveal that Indonesia’s current ‎reliance on reciprocity and ad hoc recognition mechanisms undermines predictability, judicial cooperation, and creditor confidence.‎

    The study concludes by advocating for Indonesia’s adoption of the UNCITRAL Model Law to align its insolvency framework ‎with global standards. Such a reform would improve cross-border asset recovery, enhance creditor protection, and foster a more stable and ‎attractive investment environment‎.

  • References

    1. Abdul Manan. (2017) Legal Aspects in the Implementation of Investment in the Indonesian Sharia Capital Market. 2nd edn. Jakarta: Kencana, p. 3.
    2. Achmad Muchsin. (2016) Perlindungan Hukum Terhadap Pasien Sebagai Konsumen Jasa Pelayanan Kesehatan Dalam Transaksi Terapeutik. Jurnal Hukum Islam 2(1), p. 37. https://doi.org/10.28918/jhi.v7i1.600.
    3. Adrian Sutedi. (2009) Bankruptcy Law. Bogor: Ghalia Indonesia, p. 29.
    4. Alba Porral. (2025) Universalism v Territorialism: Modified Universalism in Cross-Border Insolvency (Master Thesis, Lund University). Available at: https://lup.lub.lu.se/student-papers/record/9195735/file/9195744.pdf (Accessed 27 May 2025).
    5. Baker McKenzie. (2017) Global Restructuring & Insolvency Guide. Available at: https://restructuring.bakermckenzie.com/wp-content/uploads/sites/23/2017/01/Global-Restructuring-Insolvency-Guide-New-Logo-Philippines.pdf (Accessed 12 May 2024, 17.00).
    6. C.S.T. Kansil & Christine S.T. Kansil. (2002) Basic Knowledge of Indonesian Commercial Law. Jakarta: Sinar Grafika, p. 169.
    7. Dessi Firizki, Sihabudin & Djumikasih. (2024) Legal Protection for Creditors Due to Non-Acceptance of Bankruptcy Applications for Foreign Companies Running Their Business Activities in Indonesia. Available at: http://hukum.studentjournal.ub.ac.id/index.php/hukum/article/view/358/352 (Accessed 27 May 2024, 20.00).
    8. Gunawan Widjaja. (n.d.) Reflection on Ten Years of Bankruptcy Law and Anticipation of the Impact of the Global Monetary Crisis: Capacity and Effectiveness of Commercial Courts. Available at: http://isjd.pdii.lipi.go.id/admin/jurnal/28109513.pdf (Accessed 7 November 2023, 13.00).
    9. H. Man S. Sastrawidjaja. (2006) Bankruptcy Law and Suspension of Debt Payment Obligations. Bandung: Alumni, p. 8.
    10. Hartini Rahayu. (2017) BUMN Persero: Concept of State Finance and Bankruptcy Law in Indonesia. Malang: Setara Press, p. 140.
    11. Huala Adolf. (2009) Legal Protection for Investors in Bankruptcy Law Matters: Review of International Law and Its Application. Business Law Journal 28, p. 24.
    12. Ida Bagus Wyasa Putra. (2000) Aspects of International Civil Law in International Business Transactions. Bandung: Refika Aditama, p. 118.
    13. I Putu Gere Ary Suta. (2000) Towards Modern Capital Market. Jakarta: Yayasan SAD Satri Bhakti, p. 285.
    14. Iyah Faniyah. (2018) Legal Certainty of State Sukuk as an Investment Instrument in Indonesia. Yogyakarta: Deepublish, p. 1.
    15. Malaysia’s Move to Adopt the UNCITRAL Model Law on Cross-Border Insolvency. (2025) Global Restructuring Review, 29 July 2025. Available at: https://globalrestructuringreview.com/review/asia-pacific-restructuring-review/2026/article/malaysias-move-adopt-the-uncitral-model-law-cross-border-insolvency (Accessed 20 September 2025).
    16. Mutiara Hikmah. (2007) International Civil Law in Bankruptcy Cases. Bandung: Refika Aditama, pp. 6–67.
    17. Neil Cooper & Rebecca Jarvis. (1996) Recognition and Enforcement of Cross-Border Insolvency. Chichester: John Wiley & Sons.
    18. Peter Mahmud Marzuki. (2011) Legal Research. Jakarta: Kencana, p. 141.
    19. Rachmadi Usman. (2004) Dimensions of Bankruptcy Law in Indonesia. Jakarta: PT Gramedia Pustaka Utama, p. 5.
    20. Ricardo Simanjuntak. (2017) Initiated Cross-Border Insolvency Regulation. Available at: http://www.hukumonline.com/berita/baca/lt51f366e338725/digagas--aturan-icross-border-insolvency-i (Accessed 12 April 2023, 15.00).
    21. Richard E. Palmer. (2003) Hermeneutics Interpretation Theory in Schleirmacher, Dilthey, and Gadamer. Trans: Hermeunitika; New Theory Regard-ing Interpretation. Yogyakarta: Pustaka Pelajar, p. 8.
    22. Riris Murdani. (2016) Judges' Considerations Not Accepting Bankruptcy Applications for Multinational Companies in Indonesia (Analysis of Deci-sion Number 30/Pailit/2002/PN.Niaga/Jkt.Pst). Thesis, UIN Sunan Kalijaga, Yogyakarta, p. 7.
    23. Roberto Ranto. (2019) Legal Review of Legal Protection for Consumers in Electronic Buying and Selling Transactions. Jurnal Ilmu Hukum 2(2), p. 149.
    24. Rosalind Mason. (2008) Cross-Border Insolvency Law: Where Private International Law and Insolvency Law Meet. In: Paul J. Omar (ed.), Interna-tional Insolvency Law. Aldershot: Ashgate Publishing, p. 28.
    25. Seymour J. Rubin. (n.d.) Transnational Corporations and International Codes of Conduct: A Study of the Relationship Between International Legal Cooperation and Economic Development. American University International Law Review 10, p. 1275.
    26. Sunarmi. (2010) Bankruptcy Law. 2nd edn. Jakarta: Sofmedia, p. 1.
    27. Syamsudin M. Sinaga. (2012) Indonesian Bankruptcy Law. Jakarta: Tatanusa, p. 171.
    28. World Bank. (2020) Doing Business 2020: Resolving Insolvency. Washington DC: World Bank Group. Available at: https://www.worldbank.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2020-report_web-version.pdf (Accessed 10 April 2024, 17.00).
    29. Foo, Harold. (2023) Universalism on the Ascent: Singapore’s Cross-Border Insolvency Journey. Singapore Academy of Law Journal 35. Available at: https://journalsonline.academypublishing.org.sg/Journals/Singapore-Academy-of-Law-Journal-Special-Issue/Current-Issue/ctl/eFirstSALPDFJournalView/mid/503/ArticleId/1939/Citation/JournalsOnlinePDF (Accessed 19 May 2024, 14.00).
    30. Website: Cross-Border Insolvency dalam Hukum Kepailitan di Indonesia. Available at: https://siplawfirm.id/cross-border-insolvency-dalam-hukum-kepailitan-di-indonesia/?lang=id (Accessed 10 April 2024, 17.00).

  • Downloads

  • How to Cite

    Hendrawan, D. ., Waluyo, B. M. ., & Gunawan, J. . . (2025). Reinforcing Creditor Protection: The Imperative for The Cross-Border Insolvency Regulation. International Journal of Accounting and Economics Studies, 12(7), 11-18. https://doi.org/10.14419/nngsr855