The Mandatory Use of National Language in Indonesia and Belgium: An Obstacle to International Contracting?

Law Number 24 of 2009 on the National Flag, Language, Emblem, and Anthem of Indonesia requires that any contract involving an Indonesian party must be drafted in Indonesian. In applying this law, the Supreme Court of the Republic of Indonesia, in the Nine AM v. PT Bangun Karya Pratama Lestari judgment, annulled a loan agreement because it was considered in violation of the language requirement. Although this judgment claims to strengthen the use of the Indonesian language in contracts, it underscores the potential risk of voidance foreign parties face when they enter into agreements drafted in foreign languages with Indonesian counterparties. On the other side of the hemisphere, the Court of Justice of the European Union in Anton Las v. PSA Antwerp NV and New Valmar BVBA v. Global Pharmacies Partner Health Srl drew the public’s attention to the obligation to use Dutch in employment contracts and company documents as imposed in the Dutch-speaking region of Belgium. Despite Indonesia and Belgium being geographically far from each other, the abovementioned judgments underline the phenomenon that national language still influences cross-border legal relationships. This article seeks to explore the legal impact of the obligation to use a national language in contracts on the contracting parties’ freedom. It further argues that this obligation impedes international contracting.

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