State Responsibility in Legal Protection of Debtors and Creditors Against the Risk of Termination of Agreements

Kandou, Heddy and Pieris, John and Harjono, Dhaniswara K. and Tehupeiory, Aartje (2023) State Responsibility in Legal Protection of Debtors and Creditors Against the Risk of Termination of Agreements. The Seybold Report, 18 (3). pp. 372-378. ISSN 1533 9211

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Abstract

Economic progress has led to an increase in the need for funding, where the funding is obtained through lending and borrowing activities. However, this effort has the risk of default from the debtor, so the creditor requires a fiduciary guarantee. This is also exacerbated by the risk of terminating the agreement due to the fulfillment of the cancellation conditions which poses a risk. This study aims to determine the state's responsibility in legal protection for debtors and creditors against the risk of termination of the agreement. This study used qualitative research methods. The data collection technique in this study was a literature study. The results of the study show that the state's responsibility in legal protection for debtors and creditors against the risk of termination of the agreement by carrying out the legal construction of Indonesian legal policies in providing justice to debtors and creditors from the risk of termination of fiduciary guarantees regulated in Article 11 of Law no. 1999, among others, objects burdened with fiduciary guarantees must be registered, objects burdened with fiduciary guarantees are outside the territory of the Republic of Indonesia, the obligations as referred to in paragraph (1) are still valid and failure to register is the responsibility of the creditor, and the losses incurred are not can be sued against the debtor and the negligence of registration from the creditor cannot be a reason for the forced execution of a fiduciary object. Keywords: Legal Protection, Debtors, Creditors, Termination of Agreement

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