The provision relating to the use of English and/or foreign language and the ability to choose the dominant language only applies if a foreign party participates in the agreement. There is no other explanation for the type of “participation” of foreign parties necessary to justify the use of another language under PR 63. PR 63 also does not define what to do in “pihak asing.” 2. In this case, if foreign parties are involved, we believe that the agreements must be implemented in a bilingual form (composed of foreign language and/or English) or that the foreign language and/or English version must be prepared at the time of execution, but the parties may agree on the government language. We believe that an ocal branch of a foreign unit would fall into the category of a foreign party, since legally the corporation would be an offshore unit. 1. If the parties are Indonesians, we believe that the agreements should be carried out in Indonesian, bilingual or foreign language, provided the dominant language is the Indonesian language. Since limited liability companies operate in Indonesia (LDCs) in the form of Indonesian limited liability (PT) companies, they could be classified as Indonesian private companies and, as such, one would assume that they understand the Indonesian language and would be subject to this requirement. Recommended approach. Following the introduction of PR 63, we recommend reducing the risk of the document being prepared and signed in bilingual format as soon as the Indonesian version is ready to be signed, and the parties must have expressly stated (i) that the bilingual document reflects their consent effectively on the date the foreign language is signed and (ii) that both versions are equivalent. The foreign language version of this bilingual document is identical to the first signed foreign language version.
Before PR 63, where Indonesian and foreign-language versions could not be signed simultaneously, it was common practice to conclude the agreement first in the foreign language. The Indonesian version would then be prepared and signed within an agreed time frame. Through this practical approach, the parties accepted the risk of questioning the validity of the foreign language (particularly where the agreement is governed by Indonesian law) during the period between the signing of the foreign language and the Indonesian version. This risk persists even after the introduction of PR 63. Another development was the publication of a letter from the Indonesian Ministry of Legal Affairs and Human Rights dated 28 December 2009 (the “letter from MOLHR”), in which the Ministry stated that, in its view, English contracts should remain valid only until the terms of application were adopted, and that the enforcement provisions of Law 24/2009 would not be retroactive. While the views set out in the MOLHR letter are not binding on a court, it provides some comfort to those who contact Indonesian institutions only in English.