Client Alert on Constitutional Court Decision on Fiducia Security

Client Alert on Constitutional Court Decision on Fiducia Security

In a move that may cause significant changes in how fiducia security are to be enforced, the Indonesian Constitutional Court recently issued Decision No. 18/PUU-XVII/2019 (Decision) which declared that certain provisions of Law No. 42 of 1999 on Fiducia Security are conditionally unconstitutional. Lenders looking to benefit from fiducia security are recommended to pay special attention to the language on default in their agreement with debtors and consider other mitigants to the risks brought about by the Decision.

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