Mediation as a Final Settlement in Bankruptcy Disputes

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 4, Pages: 1456-1462

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal web link: http://www.jett.dormaj.com

https://doi.org/10.47277/JETT/8(4)1462

Mediation as a Final Settlement in Bankruptcy

Disputes

Bujang Ali *, Mella Ismelina Farma Rahayu , Rasji

Tarumanagara University – Jakarta, Indonesia

Received: 01/08/2020

Accepted: 30/09/2020

Published: 20/12/2020

Abstract

This study seeks to examine the concept of final mediation in the settlement of bankruptcy disputes as a form of alternative dispute

resolution which has been opted by the disputing parties outside of court. The study used a normative legal research approach by

investigating legal rules, legal principles, and legal doctrines to answer the legal problems faced. The results of the study show that the

mediation is only a voluntary option as the Supreme Court’s Decree on Bankruptcy does not require any mediation in the settlement. It will

be argued that the process of mediation is cheaper, faster, and simpler than the settlement process through the court. The implementation of

mediation as a final settlement in bankruptcy disputes is a form of a person's civil rights that must be respected and upheld high as a form

of agreement and contract made in accordance with Article 1320 in conjunction with Article 1338 of the Civil Code. The principle is

an embodiment of the

philosophy

natural

law stipulating

that

rationally human

being is

given the

right

to freedom to perform acts. The final mediation for the settlement of bankruptcy disputes should be based on a peace agreement made by

both creditors and debtors in good faith with reference to articles 1851, 1858 of the Civil Code and article 1338 in conjunction with article

320 of the Civil Code. Thus, the study suggests that it is necessary to establish a national private mediation institution by the government

or by the competent authorities.

Keywords: Bankruptcy dispute, Final mediation, Alternative dispute resolution

objections to decisions by dispute resolution bodies and

objections against decisions. These rules have been restricting

and prohibiting civil rights of citizens who encounter a civil

problem disputes in particular the problem of bankruptcy. The

explanation of the Supreme Court regulation above is also

inconsistent with the spirit of Law Number 30 of 1999

concerning Arbitration and Alternative Dispute Resolution,

especially in Article 6 paragraph 1 which states that “disputes or

differences of opinion can be resolved by the parties through

alternative dispute resolution based on good faith by setting

aside litigation settlement in the District Court”. Furthermore,

paragraph 4 of the Law also explains that dispute resolution or

differences of opinion in alternative business dispute resolution

can be done through a mediator.

Introduction

Disputes can be resolved in court and outside through what

is known in legal terms as Alternative Dispute Resolution

ADR). Disputes settlement outside the court can be done

(

through various such as arbitration or mediation. Arrangements

regarding arbitration are regulated in Law Number 30 of 1999

concerning Arbitration and Alternative Dispute Resolution

which specifically handles cases in the world of business or

commerce [1]. Article 1 of this Law states that Arbitration in

writing by the disputing parties. Meanwhile, the meaning of

Alternative Dispute Resolution is a dispute or difference of

opinion resolution institution through a procedure agreed upon

by the parties, namely settlement outside the court by means of

consultation, negotiation, mediation, conciliation, or expert

judgment.

Settlement through mediation mentioned above must

conducted on the will of parties in the form of an agreement

referring to Article 1320 of the Civil Code on the terms and

conditions of a contract with due regard to the principle of

freedom of contract or the principle of consensualism as

stipulated in Article 1338 of the Civil Code paragraph 1 which

reads “All approvals made legally in accordance with law

apply as law for those who made it” whereas paragraph 2 reads

agreement cannot be revoked except with the agreement of

both parties, or for the reason specified by law, and paragraph 3

reads the agreement must be implemented in good faith.

In the settlement of bankruptcy disputes as referred to in

Law Number 37 Year 2004 on Bankruptcy and PKPU, the term

mediation is not known as can be seen from the explanation

PERMA No. 1 of 2016 concerning the mediation process in

court. Article 4 of the Regulation of the Supreme Court of the

Republic of Indonesia Number 1 of 2016 concerning mediation

in the court limits the mediation process such as the types of

cases that may be mediated, cases that are resolved through

commercial court procedures, industrial relations courts,

The wording of Article 1338 of the Civil Code indicates that

the agreement which gives birth to agreement of the parties must

Corresponding author: Bujang Ali, Tarumanagara University

–

Jakarta, Indonesia. E-mail: bujangali15041965@gmail.com

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2020, Volume 8, Issue 4, Pages: 1456-1462

be obeyed by the parties and legally bind the parties who made it

as a form of the principle of Pacta Sun Servanda which means

that an agreement made is the same as a law. The importance of

the Pacta Sunt Servanda principle implies that nobody can

interfere or intervene in the terms of the agreement. This process

is then outlined in the form of an agreement made by the

disputing parties witnessed by a mediator. Furthermore, to

strengthen the contents of the agreement above, it is necessary to

final settlement in a bankruptcy dispute, so that no other legal

remedy can be taken. The importance of the principle Pacta Sunt

Servanda mentioned above in the field of civil law is concerned

with the rights and obligations of the parties. As expected, all the

agreements taken are binding on the parties who made it. In

general, in a case proceeding in a civil court, peaceful efforts

must be made by the judge who hears the peace efforts made

before the judge. This is in line with the provisions of Article

reads, “The peace settlement is a settlement containing the

contents of the peace agreement and a judge's decision which

strengthens the peace agreement, which is not subject to

ordinary or extraordinary remedies”.

The importance of final mediation in the world of civil law

greatly assists the smooth process of bankruptcy disputes, where

the settlement process is faster compared to the commercial

court process. The concept of final mediation is also a legal

breakthrough that can realize legal objectives, namely the

realization of legal justice for the disputing parties, and can

provide a sense of benefit to citizens in solving

problems, especially in resolving bankruptcy disputes. Basically,

the law is also expected to meet the social needs of the

community and the disputing parties. A good law does not

merely formally meet legal elements or just rely on the mere

legal procedure but must also be able to adjust to the dynamics

of the

community. Thus,

a responsive

law

30 paragraph 1 HIR which states that “… Before examining the

is needed which requires a legal pattern that can accommodate

all the needs of society and the phenomena that develop in

society.

case, the judges must try to reconcile the two parties” [2]. Peace

process is also a form of mediation in the courts, which is a

pattern of dispute settlement that gives a favorable decision to

the disputing parties with a quick, simple and low cost

There are still many rural communities who resolve their

cases not at court but through peace deliberation mediated by

traditional elders, community leaders, and village heads. Thus,

the pattern or method of the mediation or peace process outside

the court should be developed which is philosophically very

consistent and relevant to the values of Pancasila as the

philosophy of life of the Indonesian nation as well as the source

of all sources of law in Indonesia where all legal products must

be in accordance with its content, soul, and spirit.

process. It is in

line

with

Article 2 paragraph 4 of

Law Act 48 Year 2009 on the Power of Justice stipulating a

quite well-known principle in handling cases in court that justice

should be done with a simple, fast, and low cost. Law No. 37 of

004 concerning Bankruptcy and PKPU also provides

opportunities for debtors to pay off their debts as a form of

peace known as temporary and permanent PKPU before the

competent parties apply for bankruptcy.

The procedural law that applies in PKPU commercial court

can be carried out by PKPU temporarily with a grace period of

1.1 Research Questions and Objectives

What is the legal concept of mediation as the final settlement

5 days. If it is not finished, then it can be continued through

of bankruptcy disputes?

PKPU anyway with a grace period of maximum 270 days.

One of the examples of the decision of the bankruptcy of

How is the execution of mediation results in bankruptcy

dispute resolution carried out?

Semarang

Commercial

No. 11/Pdt.Sus -PKPU/2018/PN.

Based on these research questions, this study seeks to meet the

following objectives:

Smg dated 6 May 2018. The case is submitted to PKPU in

August 2018 and the court declared bankruptcy in May 2019.

This means that

To investigate and analyse the concept of mediation law as

the final settlement of bankruptcy disputes.

the

process

takes

over eight months

although legally did not pass the limits that have been

determined by the Constitution Act Bankruptcy and PKPU.

This condition shows that the process of resolving

bankruptcy disputes takes a relatively long time for the parties in

the case. Therefore, we need other legal alternatives that can

To investigate and analyse the execution of the results of

mediation in the settlement of bankruptcy disputes.

1.2 Contribution of Research

Theoretically, the results of this study are expected to

contribute knowledge in the field of law, particularly the

bankruptcy law related to the role of mediation in resolving

bankruptcy disputes. Practically, the study is expected to provide

input to the relevant agencies such as the Commercial Court,

Supreme Court and the disputing parties in mediation addressing

the issue of bankruptcy.

provide

existing

solutions,

namely

through final mediation. Decision of a mediation does not beat

and wrong someone like the court in the form of winning and

losing the case. Another advantage is that it can be done

anywhere depending on the agreement of the parties. Its

confidentiality can also be guaranteed, cases or disputes are also

resolved more quickly, and psychologically.

The process of resolving insolvency and legal efforts of the

disputing parties through final mediation outside of the court as

a final decision that is made by the parties in the form of a

Research Method

This study is a normative legal research which has a

different method from other kinds of research. Normative legal

research is a systematic way of conducting research in the form

of a product of legal behaviour, for example examining

legislation [3]. The main point of the study is that law is

conceptualized as a norm or rule that applies in society and

becomes a reference for everyone's behaviour, so that normative

legal research focuses on written regulations in the form

literature, legislation, norms and regulations, or principles

“

Peace Settlement” whose contents are binding and have the

same force as the court's decision. A peace settlement that has

been drawn up cannot be subject to legal action, either appeal or

cassation, even a reconsideration. This can be seen from the

meaning of the peace settlement in Article 1 paragraph (2) of the

Regulation of the Supreme Court of the Republic of Indonesia

Number 1 of 2016 concerning the Mediation Process, which

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2020, Volume 8, Issue 4, Pages: 1456-1462

related to the subject matter. To answer the problem and achieve

the objectives of this study, the researcher uses a type of

normative research by looking at the law in its normative

context. Studies in normative law focus more on

library research. The approach used in this study is a process of

finding legal rules, legal principles, and legal doctrines to

answer the legal problems faced. This is in accordance with the

perspective of legal character [3].

PKPU has a maximum of 270 days, with longer period of

cassation and reconsideration. With these conditions, it is

necessary to find other legal solutions that can be taken by the

disputing parties in solving the problem in a simple, fast and low

cost as the court principle as desired in Article 4 Paragraph 2 of

Law Number 48 Year 2009 concerning Judicial Power

stipulating that “Courts help justice seekers and tries to

overcome all obstacles and obstacles in order to achieve a

simple, fast, and low cost trial. As it is known that the

bankruptcy process in the commercial court does not only

pursue legal certainty in fulfilling the interests of the formal

legal aspects, by leaving the interests of the material legal

aspects both aspects of legal justice, benefit and aspects of

economic calculation.

Therefore, as suggested by Sutan Remy Sjahdeini, the

Bankruptcy Law and PKPU should provide benefits not only to

creditors but also to debtors. In this regard, the Bankruptcy and

PKPU laws must also provide equal protection for creditors and

debtors. With this Bankruptcy Law and PKPU, it is hoped that

creditors can gain access to the assets of debtors who are

declared bankrupt, due to the debtor's inability to pay their

debts. In practice, however, the benefits and protections

provided by the Bankruptcy and PKPU laws are only for

the interests of creditors and debtor stakeholders concerned [5].

Although the Bankruptcy and PKPU law number 37 of 2004

provides opportunities for parties, both debtors and creditors, to

carry out a peace process both at the PKPU stage itself and at

peace after being declared bankrupt by the commercial court on

the condition that they did not go through the PKPU peace

process first. In reality, it is not as easy as the one being carried

out because the peace process or getting along in bankruptcy is

not a necessity as ordered by the Bankruptcy and PKPU

law because it is voluntary. In addition, the peace or mediation

provisions issued by the Supreme Court through Regulation

No.1 of 2016 concerning mediation procedures in district courts

also do not provide space for the parties, to mediate in the

commercial court, so there is no opportunity for the parties to

conduct peace or mediation which is required in commercial

court as stipulated in articles 130 HIR and 154 RBg. Concerning

the bankruptcy peace process, Article 144 of Law Number 37 of

Research Results and Discussion

Bankruptcy is a condition that results in a debtor going

bankrupt, either individually or as a private legal entity, because

of his inability to pay off or pay his debts to creditors. This

condition could be caused by business decline or unfair business

competition and other factors. Currently in Indonesia there

are five commercial courts that specifically handle cases related

to commercial court authority. The five commercial courts were

established based on Government Regulation No. 97/1999

concerning the Establishment of Commercial Courts in the

Padang, Medan, Surabaya, and Semarang District Courts. In this

context, disputes between the bankrupt debtors and the existing

creditors will be resolved through the commercial court located

in each of the areas mentioned above, which is in charge of the

relative competence according to their authority. According to

M. Hadi Shubhaan, the term bankruptcy is often misunderstood

by the general public, with some consider bankruptcy as a

verdict that has a criminal dimension and is a legal flaw on a

legal subject, and therefore, bankruptcy must be avoided as

much as possible. Bankruptcy is apriori considered a failure

caused by the fault of the debtor in running his business so that

the debt cannot be paid [4].

As such, the failure to pay debts to creditors is not only

influenced by internal factors of the entrepreneur or company,

but maybe also influenced by external factors from other parties

outside of business activities. The existence of the Bankruptcy

Law and PKPU through Law Number 37 of 2004 offers a

system of procedural law through this simple proof system

considered by practitioners, academics and experts in a legal

condition that makes it easy for a debtor to be bankrupt,

especially in its simple proof system. In fact, it is not necessarily

true that debtor is declared completely incapable of paying debt

to the creditor. So, it needs to be audited by experts who has

capacity in evaluating the debtor's business.

The bankruptcy process in the commercial court is presumed

to be only a pattern of fulfilling its duties and functions formally

to comply with the existing regulations. The justice of the

commercial court also does not provide a positive solution for

the disputing parties. There are so many costs, time and energy

that are spent by the parties, especially the bankrupt debtor who

must attend the bankruptcy trials. Another impact that was felt

was the mischievous behaviour of curators who embezzled

debtors' assets so that they were prosecuted based on creditor

reports. In short, the current bankruptcy process carried out in

the commercial court is less effective in providing solutions for

the parties. On the other hand, the state will also lose a source of

income both from the tax sector and other non-tax revenues as a

form of state income. Based on the existing data, the process

of bankruptcy in the judicial commerce since the initial process

in PKPU until declaration of bankruptcy could take many

months or even many years. Besides usual practice commercial

court begins a process at PKPU suspended for 45 days and

2004 on Bankruptcy and PKPU states that the debtor has the

right to offer a peace agreement to all creditors. However, a

peace process can also be carried out after the debtor is declared

bankrupt. In fact, based on the results of the previous studies, it

is not as easy as expected because of the large number of

creditors involved. Therefore, it must go through a creditor

agreement with the procedures as stipulated in Article 151 to

152 of the Law on Property and PKPU number 37 of 2004.

So strict and difficult are the procedures for peace or harmony

in the bankruptcy process so that there are many requirements

that must be followed so that almost all cases or disputes that go

to the commercial court end in failure with the debtor’s decision

to be bankrupt by the commercial courts.

According to Suyud Margono, criticisms concerning the high

cost of litigation also affects the economic life, not only in

America, but also in other countries [6]. Although the forms of

criticism are almost the same, the most important ones are

described as follows.

Slow dispute resolution

a. Settlement of cases through the litigation process is

generally slow or a waste of time.

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2020, Volume 8, Issue 4, Pages: 1456-1462

b. This results in the examination process being very

formalistic and very technical.

c. The flow of cases is getting heavier so that the

judiciary is overloaded.

The court fee is expensive

All parties consider the cost of the case to be very expensive,

especially when it is related to the length of time for the

settlement. The longer the settlement, the higher the costs that

must be incurred, among others in the form of official fees,

attorney's fees that must be borne. In most cases, the court fee

makes people paralyzed and drained of all resources, time and

thoughts.

In the case of the mediation process that has been applied so

far in Indonesia, the only thing that applies is in the district court

guided by the Supreme Court Regulation No.1 of 2016

concerning the mediation procedure in the District

Court. Regarding the meaning of mediation, it can be seen in

article 1 No 7 Perma No. 1 of 2016 that states that: “Mediation

is a way of resolving disputes through the negotiation process to

obtain an agreement between the parties assisted by a

mediator”.

The explanation above shows how important it is to empower

mediation issues inside and outside the court in resolving civil

cases. Therefore, in the effort to implement mediation as a

settlement of business disputes both inside and outside the court,

it is necessary to analyse the comparison of the process of

implementing mediation carried out in various countries that

have implemented mediation. The use of court mediation

methods in the international community has a long history that

can be traced back to the Middle Ages in the Anglo-Saxon legal

system. At that time, one of the popular dispute resolution

methods used was the combined arbitration-mediation method

carried out by judges. However, the role of judges as peaceful

settlement of cases is more dominant in countries that adhere to

the Continental European legal system. Today, in the

international world, the role of judicial mediator is the latest

development in the Anglo-Saxon legal system. The development

of judicial mediation is an attempt by courts to provide a one-

stop legal forum for all types of disputes and the needs of the

parties. By doing so, the parties can save time, money and effort

without the need to find alternative ways to resolve disputes

outside the court [7].

a. Justice is unresponsive

Another general criticism that is shown to the court is the fact of

experience and observation that the court is not responsive

in the form of behaviour:

Less responsive in defending and protecting public

interests, courts often ignore public protection and the

needs of society,

Courts are often considered to be unfair because it

tends to offer service, opportunities, and privileges

to large institutions and the rich.

b. The court ruling did not solve the problem

The objective fact that the court's decision is unable to

provide a satisfactory solution to the parties includes:

One party will win, and the other must lost;

A win-win situation in a case never brings peace, but

grows seeds of revenge and enmity and hatred;

Court rulings are confusing;

Court decisions often do not provide legal

certainty and are unpredictable.

From a global development perspective, Nurnaningsih

c. The ability of the judges is generalist

Amriani asserts that most developed countries have developed

mediation [8]. These countries develop mediation either alone or

connected to the court as an alternative dispute

resolution. Indonesian must consider this development if it does

not want to be left behind in global development in alternative

business (civil) dispute resolution. This precaution must be

anticipated as soon as possible. As Susanti Adi Nugroho

suggests, Indonesia economic community demand speed,

secrecy, efficiency and affectivity as well as sustained existing

relationships [9]. The existing litigation institutions cannot

respond to this, which has been criticized for being slow,

expensive, wasteful of energy, time, money. Developed

countries in general, including America, Japan, Australia,

Singapore, have mediation institutions both outside and within

the court. The terms of mediation or peace settlement provide an

opportunity for the use of mediation as a medium for resolving

business disputes in bankruptcy. A peace agreement must be

strengthened through a court decision so that it has executorial

power. Disputes or problems faced by the community, especially

in business matters, from time to time will increase and if all

these cases are brought to the court it will hugely increase the

number of cases in the court. This will affect proceedings

relating to the bankruptcy in the commercial courts. In this

Judges were thought to have very limited knowledge. At

most, the knowledge they have is only in the field of

law. Beyond that their knowledge is general. Considering

that judges are only human generalists, it is impossible to be

able to resolve disputes that contain complexity.

This is in line with M. Yahya Harahap’s statement:

“

However, bitter experience has affected people, showing an

ineffective and inefficient judicial system. Settlement of cases

took decades. It is a lengthy process, wrapped in an endless

circle of legal efforts, starting from appeals, cassations, and

reconsiderations” [7].

The expert's opinion show that the interests of the parties are

less accommodated in the court process which is too convoluted,

especially for business activities that are considered not

beneficial for parties engaged in business in the context of

investment, preferring to settle their disputes through arbitration

or mediation or other possible alternatives.

The term mediation first appeared in the United States in

around 1970. Robert D. Benjamin, a Director of Mediation and

Conflict Management Service in St. Louis Missouri, stated that

mediation was known since around 1970 which was formally

applied in the alternative dispute resolution (ADR) process in

California. The emergence of alternative dispute resolution is

motivated by the dissatisfaction of the American public with the

dispute resolution administration system implemented in the

judiciary which is considered to take too long and is expensive

so that the disputing parties and the public have difficulty

getting access to justice.

case, mediation

offers

a simpler, shorter

and

cheaper final settlement of bankruptcy disputes and can provide

greater access to the parties with the discovery of a dispute

resolution that can satisfy the sense of justice and mutually

benefit the parties (win-win solution). The Supreme Court itself

as the highest judicial institution in Indonesia which is also the

supervisor of the judiciary in Indonesia is not fair and consistent

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2020, Volume 8, Issue 4, Pages: 1456-1462

in implementing the Supreme Court’s regulation Number 1 of

final decision. According to Article 1851 of the Civil Code,

peace can occur to end a case (after being submitted to court)

and to prevent a case from occurring (before it is submitted to

court). Even an out-of-court bill can be strengthened into a

judicial decision if the parties so wish.

This legal measure is a solution in realizing the principle of

resolving disputes more quickly, simply and at low cost so that it

aligns with what is intended in Article 4 paragraph 2 of Law No.

48 Year 2009 on Judicial Power that explains that the court

helps the search for justice and seeks to overcome all the

obstacles and barriers to a simple, fast, and low cost trial can be

achieved.

016 which prohibits mediation in bankruptcy disputes making

it difficult for the disputing parties to resolve the bankruptcy

dispute faster. If analysed, the Supreme Court Regulation

number 1 of 2016 is very inconsistent and even a form of

deviation from the provisions of the civil procedural law in force

in court as stipulated in Article 130 HIR and Article 154

RBg which obliges judges to reconcile the litigating parties

before the case is examined. There are two main reasons for

considering mediation as a form of alternative dispute resolution

in Indonesia, namely [10].

In Indonesian society, which is known as a consensus

society, this method of dispute resolution involving a neutral

Mediation as the final settlement in a dispute over bankruptcy

is a form of civil rights of a person to be protected and upheld

and respected by everyone. It is also due to the form of the

agreement and a pact that is made under applicable laws and

rules as described in Article 1320 in conjunction with Article

1338 concerning the principle of freedom of contract. Therefore,

person's right is protected and guaranteed by the constitution to

avoid forms of irregularities and violations, and discrimination

against his/her rights. This is an embodiment of the legal

philosophy of the natural law which gives freedom to everyone

to exercise their rights. The settlement of bankruptcy disputes

between individuals and private legal entities in the form of a

legal settlement through mediation is a form of respecting the

rights of the disputing parties in having legal protection that is

fairer and more balanced. In this kind of dispute settlement, the

level of seriousness and honesty of the parties to realize the

peace agreement that has been made in good faith is very

important. The issue of good faith in particular should not only

discussed at the time of the agreement as discussed in Article

1338 of the KUH in conjunction with Article 1320 of the Civil

Code, but also permeates its implementation after the peace

agreement is made. This is because the issue of good faith is also

related to a person's morale in relation to the level of honesty,

which can contain the contents of the agreements that must be

observed and implemented.

third party has

the rural and urban communities;

strong social base, both in

By looking at the experience in America as a country where

the people are known for their fairly high tendency to use

court (litigation minded), it turns out that mediation has

developed very rapidly. Until 1996, there were 220 public

mediation networks operating in all 40 states, which handled

around 250,000 cases per year, with a total of 1.5 million

people involved in them.

A peace process through a mediation process outside the court

has great potential to be developed when viewed from the

following supporting factors [8]:

Legal culture

The use of mediation as a medium for dispute resolution has

been known for a long time. Known in our customary law, the

pattern of dispute resolution through peace judges is in principle

the same as the pattern of dispute resolution through mediation.

Likewise, Muslims have a legal culture of reconciliation (islah)

and mediation (hakam) in dispute resolution. As such, in terms

of legal culture, the opportunity to develop mediation as an

alternative to resolving civil (business) disputes is quite large.

The problem is now how to maintain this legal culture so that it

becomes a real legal culture in society.

The principle of good faith which is only a principle that

applies in the field of contract law has developed and is accepted

as a principle in other fields or branches of law, both within the

private law family and in the field of public law. In other words,

the principle of good faith has developed from a specific legal

principle to a general law principle. As a universal principle, it

applies anytime and anywhere, regardless of time and

place. This is also evidenced by the fact that the principle of

good faith is also adopted in Article 2 paragraph (2) of the UN

Charter, which states that “All members, in order to ensure to all

of them the right and benefit resulting from membership, shall

fulfill in good faith the obligation assumed by them in

accordance with the percentage charter. Article 26 of the 1969

Vienna Convention also states that “Every treaty in force is

binding upon the parties to it and must be performed by them in

good faith”.

Bankruptcy dispute resolution through final mediation outside

the court with a peace agreement has a permanent legal force

which is equated with a court decision so that execution can be

carried out. This executorial power is enforced in the decision by

force by state officials. And based on the principle “for the sake

of justice based on the one and only Godhead” it will provide

executorial legal force for the court decisions being petitioned.

Furthermore, the explanation of Article 195 of the Revised

Government support

Civil (business) dispute resolution through alternative

dispute resolution (mediation) has strong government support.

This can be seen from the statement that ADR is needed to

reduce the unnecessarily huge number of cases in court. The

government strongly supports the development of ADR

(

including mediation) as a medium for dispute resolution both in

public and private spheres.

Laws and regulations

Although there is no law that specifically regulates

mediation and arbitration, the existing regulations can be used as

a legal basis for the application of mediation. One of these is

Article 130 HIR and 154 RBg 1338. Within the circles of legal

practitioners, there is a growing understanding that only peace

decision in the court that has the power of execution while

outside the court peace agreement has only the power as

ordinary agreement. However, there are also practitioners who

found peace agreement both inside and outside the court shall

have the same execution power based on Article 1858 of the

Civil Code which does not differentiate between peace

agreement decisions and peace agreement approvals. This article

only states that peace has the power of the judge’s

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2020, Volume 8, Issue 4, Pages: 1456-1462

Indonesian Reglemen (“HIR”) as the provisions of civil

procedural law in Indonesia states the following:

is to order the execution and at the same time lead the execution

of the execution. After completing this execution order, the next

step is to make an execution report which is also a formal

requirement for the validity of the execution as stipulated in

article 197 paragraph (4) HIR or article 209 paragraph 4 RBg

which explicitly orders the official who carries out the execution

to make an official report. If not made, the execution will be

declared invalid. In the validity of the minutes of execution, the

parties must sign it by including two witnesses to strengthen the

report. Therefore, if during the execution or confiscation of this

guarantee, it is possible that undesirable things will occur for the

parties to the dispute in the case of a bankruptcy dispute,

especially in carrying out this execution.

In relation to the confiscation of the guarantees mentioned

above, M. Yahya Harahap argues in his book Civil Procedure

Law that the purpose of the guarantee seizure was so that the

defendant would not embezzle or alienate the goods during the

trial process, so that when the verdict was carried out, the

repayment of the debt demanded by the plaintiff could be

fulfilled, by selling the confiscated goods. Thus, the act of

confiscating the property of the defendant was not to be

delivered and owned by the plaintiff (the applicant for

confiscation), but to pay off the defendant's debt payment to the

plaintiff [12]. The debtor is obliged to be responsible up to all

his personal assets for the engagement he has made with

creditors in accordance with the peace deed agreement with due

observance of the provisions of articles 1338, 1320 and Article

1131 of the Civil Code.

To ensure the smooth execution of collateral for physical

goods in the field so that it runs in an orderly manner, safe and

smooth. Then the creditors and facilitated by the mediator can

ask the security forces, in this case the Republic of Indonesia

Police, to assist in this matter of security. Therefore, as

a reference or guideline used in its implementation, creditors

facilitated by the mediator can refer to the Chief of Police

Regulation number 8 of 2011 concerning securing the execution

of fiduciary collateral. Therefore, the police as an organ of this

state has the authority to assist in securing the implementation of

judicial decisions and/or the execution of fiduciary guarantees,

activities of other agencies, and community activities. This

receivable or bankruptcy which has the same binding legal force

as the court verdict which has permanent legal

force (incraht). The involvement of security for execution as

referred to in this regulation is a police action in order to provide

security and protection for the execution of the execution, the

applicant for execution, the respondent is executed at the time of

the execution that is to be carried out.

“

In a civil case because the winning party has obtained the

decision of the judge who punishes his/her legal opponent then

he/she is entitled to use tools that are allowed by the rules or

laws to compel the resisting parties or did not meets the existing

peace accord in order to comply with the judge's

decision. Therefore, in using this right already should be given

to creditors, because if there is no possibility to force a person

convicted if the judiciary is not functioning then it will do no

good as an institution or the institution authorized

and legitimate”.

A peace agreement that is made clearly shows something that

is certain and has legal force because there are no more legal

remedies. Therefore, based on the provisions in Article 224 HIR,

the execution must fulfill the contents of the agreement made by

the parties to fulfill the contents of the agreement made by the

parties as outlined in the form of gross acta and notary debts

because this has executive power, that is, if the debtor does not

fulfil and implement the contents of the agreement, then he can

be forced to carry out the contents of the agreement through an

application to the court [11].

Based on the explanation of Article 195 HIR in conjunction

with Article 54 paragraph (3) of Law Number 48 of 2009, it

states that court decisions are carried out with due regard to

human values and justice. The execution of district court

executions as required in Article 54 paragraph (2) of Law

Number 48 of 2009 concerning Judicial Power which states that

the implementation of court decisions in civil cases is carried out

by the Registrar and the Bailiff is led by the Chair of the court.

In the execution, there are several administrative

requirements that must be met before the execution, namely:

Warning (aanmaning) is a basic requirement in an execution

because without a warning prior execution, the execution cannot

be executed and results in legal flaws. An aanmaning is a legal

form or action usually taken by the Chairman of the Court in the

form of a warning to the debtor, so that the debtor implements a

decision or a voluntary peace agreement.

The procedure that is usually carried out based on the

provisions of article 196 HIR or 207 RBg is based on the request

of the creditor and the mediator as a basis or condition

for anmaning. A petition in court it can be done either orally or

in writing. If the time limit is given and has exceeded the period

of 8 (eight) days, then the chairman of the local district court can

carry out the execution by force. Therefore, the decision of the

chairman of the district court to be conveyed to the clerk or

bailiff to carry out the execution with the decision of the head of

the court that is imperative means an imperative to be carried

out. District court decisions are made in a written ruling and

may not be oral because it is a form of administrative law

requirement by referring to article 197 paragraph 1 or article 208

Closing

.1 Conclusion

The legal concept of final mediation for the settlement of

bankruptcy disputes is a pattern of agreement between

creditors and debtors with a mediator outside the court in the

form of a peace agreement has the legal force of execution

such as a court decision, and is carried out in good faith

based on the provisions of Article 1338 Jo Article 1320 Civil

Code. This effort is also in line with the principle of a court

that adheres to a fast, simple and low-cost trial as referred to

in Article 4 paragraph (2) of Law Number 48 of 2009.

The execution of mediation results in the bankruptcy dispute

settlement process is a method of forced execution through a

paragraph 1 RBg. Execution is in accordance with the

procedures of the provisions stipulated in the Law Number 48 of

009 in Article 54 paragraph 2 of the judicial authorities that

forcefully argues that the implementation of the court decision is

made by the clerk or bailiff led by the Chairman of the

court and supervised by court head in accordance with Article

5 Paragraph 1. This arrangement is intended because the actual

and physical execution of the object to be confiscated is led

directly by the head of the court concerned. Therefore, in

carrying out the execution, the function of the head of the court

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Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 4, Pages: 1456-1462

decision of the local district court if the execution of its own

power by creditors is not successful under the applicable

civil procedural law. For the smooth execution of the

security assistance, security assistance can be requested by

referring to the National Police Chief Regulation Number 8

of 2011 concerning Security of Fiducia Collateral Goods.

Nugroho SA, SH M. Hukum Kepailitan Di Indonesia: Dalam Teori

dan Praktik Serta Penerapan Hukumnya. Kencana; 2018 Sep 1.

Van Donzel E, Lewis B, dkk (ed), Encyclopedia of Islam. Leiden:

EJ Brill. 1990.

Hutagalung SM. Praktik Peradilan Perdata dan Alternatif

Penyelesaian Perdata, sinar Graﬁka cetakan pertama.

Harahap MY. Hukum Acara Perdata tentang gugatan, persidangan,

penyitaan, pembuktian, dan putusan pengadilan. Sinar Grafika;

2005.

.2 Suggestions

To facilitate the bankruptcy process as regulated in Law

Number 37 Year 2004 concerning Bankruptcy and PKPU,

the Supreme Court Regulation Number

1 of 2016

concerning Mediation Procedures needs to be reviewed or

revised to provide opportunities for disputing parties in a

commercial court both inside and outside the court. If

possible, new regulatory policies through the mediation law

as positive law that applies and can be applied in the legal

system in Indonesia could be made.

It is necessary to establish a national private mediation

institution appointed by the government or by the competent

authorities in assisting the process of resolving bankruptcy

disputes through certified mediators, or advocates, former

judges, and academics. And this institution is also authorized

to carry out executions as is the case with court decisions

that have legal force in deciding the bankruptcy stage.

Ethical issue

Authors are aware of, and comply with, best practice in

publication ethics specifically with regard to authorship

(

avoidance of guest authorship), dual submission, manipulation

of figures, competing interests and compliance with policies on

research ethics. Authors adhere to publication requirements that

submitted work is original and has not been published elsewhere

in any language.

Competing interests

The authors declare that there is no conflict of interest that

would prejudice the impartiality of this scientific work.

Authors’ contribution

All authors of this study have a complete contribution for

data collection, data analyses and manuscript writing.

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