Definition of Fiduciary Guaranty
Fiduciary is the transfer of ownership rights over certain goods on the basis of trust with the provision that the goods whose ownership rights are transferred remain under the control of their owners, while Fiduciary Guaranty is guaranty rights over movables, tangible as well as intangible, and immovables, especially buildings bearing no mortgage rights as meant in Law Number 4 of 1996 on Mortgage Rights ("Law No. 4/1996" ) that remain under the control of Fiduciary Providers, as collateral for the settlement of certain debts, which give a pre-emptive position to Fiduciary Recipients against other creditors. Such a position is commonly referred to as the Preferred Creditor.
Fiduciary guaranty in Indonesia is based on Constitutum Posserium, which means that the transfer of fiduciary rights does not change the ownership rights over the goods. The creditor’s right is only limited to the right to sell, so the creditor who receives the fiduciary does not have ownership rights over the goods, even though the debtor cannot settle the debt (his obligations). Therefore, the transfer of fiduciary rights is only as a guaranty for creditors that the debtor will immediately settle his debt.
Obligation to Register Fiduciary Guaranty
Goods bound under Fiduciary Guaranty shall be registered so that it can be legally binding. This obligation applies to goods bound under Fiduciary Guaranty inside or outside the territory of the Republic of Indonesia. Along with the times and the increasing needs of the public, in 2013 the Government of the Republic of Indonesia stipulates the Regulation of the Minister of Law and Human Rights Number 9 of 2013 concerning Enforcement of Electronic Registration of Fiduciary Guaranty (“Regulation No. 9/2013”). The implementation of this electronic system is based on the large number of time-consuming applications for fiduciary registration, so the electronic system is considered to be a solution, so that fiduciary registration is faster and more efficient. Furthermore, the electronic system is also considered to be able to help eradicate the existence of illegal levies, corruption, collusion, or nepotism in the administrative aspects of fiduciary registration, because everything is done by system.
On July 13, 2021, the Minister of Law and Human Rights (“MOLHR”) stipulated the Regulation of the Minister of Law and Human Rights Number 25 of 2021 concerning Procedures for Registration, Amendment, and Removal of Fiduciary Guaranty (“Regulation No. 25/2021”) which revoked the Regulation of the Minister of Law and Human Rights Number 10 of 2013 concerning Procedures for Electronic Registration of Fiduciary Guaranty (“Regulation No. 10/2013”). In essence, Regulation No. 25/2021 again provides convenience to fiduciary applicants. First, there is an access rights mechanism that explicitly expands the scope of fiduciary applicants. It is explained in Article 3 paragraph (2) of Regulation No. 25/2021 that access rights can be applied for by notaries, corporations, and individuals who have a relationship with the fiduciary application, each of whom has access rights with varying durations according to applicable regulations. Second, Regulation No. 25/2021 also regulates the mechanism for improving electronic registration of fiduciary, which was not previously regulated in Regulation No. 9/2013. As a result, if there is an error in the fiduciary registration data, this can make it easier for the applicant and shorten the time because the applicant does not need to apply for amendment in a complicated way.
Execution of Fiduciary Guaranty
In the event that the debtor commits default, the creditor has the right to execute the fiduciary guaranty. The creditor's executorial rights in this case are regulated in Article 15 of Law Number 42 of 1999 concerning Fiduciary Guaranty (“Fiduciary Law”):
Article 15 paragraph (1) of the Fiduciary Law:
“Certificates of fiduciary guaranty as meant in Article 14 paragraph (1) shall bear the words "FOR THE SAKE OF JUSTICE BASED ON ALMIGHTY GOD ".
Article 15 paragraph (2) of the Fiduciary Law:
“Certificates of fiduciary guaranty as meant in paragraph (1) shall have the same executorial power as court decisions that have become final and binding.”
Elucidation of Article 15 (2):
“Referred to in this provision as "executorial power" is directly enforceable without legal proceedings and final as well as binding the parties to execute the decision.”
Article 15 paragraph (3) of the Fiduciary Law:
“In the case of debtors committing default, fiduciary recipients shall have the right to sell goods serving as objects of fiduciary guaranty under their own power.”
On January 6, 2020, the Judge in the Constitutional Court Decision Number 18/PUU-XVII/2019 of 2019 (“Constitutional Court Decision No. 18/2019”) stated that Article 15 paragraph (2), Article 15 paragraph (3), and Elucidation of Article 15 paragraph (2) of the Fiduciary Law were conditionally constitutional, which means that fiduciary guaranty does not automatically have executorial power.
In the Constitutional Court Decision No. 18/2019, the Judge is of the opinion that unilateral action in the execution of fiduciary on the basis of Article 15 paragraph (2) of the Fiduciary Law has the potential to cause arbitrary action against the debtor and that the phrase "committing default" in Article 15 paragraph (3) of the Fiduciary Law does not have an elucidation regarding the factor that causes the fiduciary provider to commit default against the fiduciary recipient. This decision certainly has an impact on the parties concerned, including the banking sector as the institution that provides loans to the public and other financing institutions. In executing the Fiduciary Guaranty Certificate when the debtor does not settle the debt (his obligation), the creditor must meet the following requirements in order to be entitled to execute the object of fiduciary guaranty:
This certainly raises pros and cons because it is considered contrary to the fiduciary principle itself. One of the fiduciary principles is to provide convenience in its implementation if the debtor commits default. A fiduciary guaranty certificate is considered quite the same as a court decision because it has been registered before a notary, which means it has been recorded by the state in which there is also the phrase "FOR THE SAKE OF JUSTICE BASED ON ALMIGHTY GOD". This phrase implies that the certificate can also be accounted for. The elucidation of the Fiduciary Law also states that one of the objectives of fiduciary is to realize simple, fast and easy loan transactions with real legal certainty.
Furthermore, the right of a creditor to unilaterally execute a fiduciary guaranty in the event the debtor commits default is also supported by legal grounds that the executorial action is not intended to form an agreement. Prof. Subekti is of the opinion that an agreement that requires the approval of both parties has been made at the time the fiduciary agreement is registered before a notary, because the fiduciary guaranty is accessory in nature. Therefore, the legal logic is that mutual agreement to exercise the executorial power of the agreement is not necessary.
On the other hand, M. Yahya Harahap is more specific in defining executorial power as a principle that will only apply if there is a court decree that has become final and binding. Furthermore, M. Yahya Harahap is of the opinion that only such decision has executorial power, and therefore fiduciary guaranty can only be executed immediately after a court decree is issued.
In practice, the problem that often arises is the attitude of the debtor who evades the execution of fiduciary guaranty. In dealing with this, it is often found that the creditor, either directly or indirectly, collects their rights in a way that is not in accordance with applicable norms, due to the creditor's need for the proceeds from the of the execution of fiduciary for business continuity. It is often found in the field that the creditor uses the services of third parties (e.g. debt collectors) to collect the debt from the debtor in unethical ways such as threatening, terrorizing or even committing physical violence against the negligent debtor. This is the basis for the judge's consideration in rendering the Constitutional Court Decision No. 18/2019. Therefore, it can be concluded that the arbitrariness of the creditor in the execution of fiduciary guaranty can be eliminated with the by system execution instead of unilaterally.
However, apart from the pros and cons of the Constitutional Court Decision No. 18/2019, this decision was reaffirmed through the Constitutional Court Decision Number 2/PUU-XIX/2021 of 2021 (“Constitutional Court Decision No. 2/2021”), where the Judge rejected the review of Article 15 paragraph (2) and the Elucidation of Article 15 paragraph ( 2) of the Fiduciary Law in which through the Constitutional Court Decision No. 18/2019, Article 15 paragraph (2), Article 15 paragraph (3), and the Elucidation of Article 15 paragraph (2) had been subjected to a judicial review (conditionally) as described previously.
It can be seen from the development of the procedures for the registration and execution of fiduciary above that the direction of this development aims to eliminate arbitrary practices or taking the law into one’s own hands (eigenrichting) by the parties involved in fiduciary guaranty. If the entire process is regulated in detail and clearly by system, then the room for arbitrary practices or taking the law into one’s own hands (eigenrichting) can be minimized or even eliminated.
However, we’ve found that in practice, there are still loopholes that can be exploited to avoid this. For example, we’ve found that the creditor has minimized the risk of complications in the execution of fiduciary by adding an indemnity clause to the loan agreement with the debtor, which essentially guarantees that the debtor agrees to a default if the debtor cannot pay the debt (his obligation) at the agreed time. As a result, default can be executed automatically so the creditor does not need to take a complicated legal action to execute the fiduciary guaranty.
Therefore, in our opinion, there is a need for a breakthrough in new laws and regulations, especially regarding the execution of fiduciary guaranty, the drafting of which is based on an equal point of view on the roles and rights of the creditor and the debtor on the fiduciary guaranty, taking into account the practice in the field and the principles of fiduciary according to the Fiduciary Law. It should also be considered that at the time of execution, the creditor must be accompanied by law enforcement officials and a bailiff from the court.
 Article 1 paragraph (1) of Law Number 42 of 1999 concerning Fiduciary Guaranty (“Fiduciary Law”)
 Article 1 paragraph (2) of the Fiduciary Law
 Article 15 paragraph (3) of the Fiduciary Law
 Article 11 paragraph (1) jo. Article 14 paragraph (3) of the Fiduciary Law
 Article 11 paragraph (2) of the Fiduciary Law
Published on Hukum Online