Implication Juridical Decision of The Constitutional Court No. 18/PUU-XVII/2019 Concerning Wanprestasi In the Fiducia Agreement

The purpose of this paper is to criticize the Constitutional Court Decision Number 18 / PUU-XVII / 2019, which determines that the phrases "executorial power" and "are the same as court decisions having permanent legal force" in Article 15 paragraph (2) of Law Number 42 of 1999 concerning The Fiduciary Guarantee contradicts the 1945 Constitution. From the norms contained in this article, there is a power of execution that the fiduciary security holder can carry out (creditors), which then causes many problems, both related to the constitutionality of norms and implementation. Thus, the authors question two things, first how is the juridical analysis of the Constitutional Court decision No. 18 / PUU-XVII / 2019 regarding breach of contract in the fiduciary agreement? Second, what is the juridical implication of MK Decision No. fiduciary? The writer's research type is library research, a literature study (library research) with a descriptive qualitative research type. The data collection technique used was documentation techniques, and the approach method used in this study was juridical normative. The results of this study conclude that 1) The Constitutional Court's decision has not provided a sense of justice as in Article 27 paragraph (1) and Article 28D paragraph (1) of the 1945 Constitution, because in this Constitutional Court decision gives more exclusive rights to the debtor because in this case, the creditor does not get legal protection rights in the event of undesirable things (2) This decision has implications for various parties, namely the Court, which now often receives requests for execution and the process will be lengthy, for notaries must add and clarify default clauses in detail. For business people whose creditors (fiduciary recipients) cannot carry out unilateral execution of the object of fiduciary security but must submit a request for performance to the Court. There is a concern that lousy faith will occur from the community's debtor when the creditor is submitting a request for execution to the Court.

Is Full Preference for a Secured Claim in Insolvency Proceedings Justified?

Secured claims have priority over other claims in the event of debtor insolvency with respect to the distribution of the debtor’s encumbered assets. Numerous writings have discussed the necessity of security instruments in the context of growth and development of the economy. Credit is indeed necessary for the economy’s development, but, at the same time, credit is the cause of insolvency. This can be put another way: efficient credit develops the economy, while inefficient credit causes insolvency. The author argues on this basis that restriction of the secured creditor’s rights in insolvency proceedings means not less credit but more effective credit. A security-holder whose rights are limited is going to lend more responsibly and monitor the activity of the debtor more intensively and effectively, because the risk of loss would otherwise increase. Better monitoring should lead also to earlier intervention by the secured creditor in the actions of the debtor, which can be expected to increase the number of cases of rescue of debtors headed for insolvency. The author suggests the option of removing a small amount from the secured creditor and distributing it among the unsecured creditors to make the credit system more efficient and reduce injustice. Implementing this option would not harm the interests of the secured creditor as much as it helps to render the whole system more efficient.