I.

INTRODUCTION

Sincerely,
We hereby submit our Legal Opinion in accordance with the request of Jason Osabuo
hien Adesanya as the representative of the Silver Venture Gate on November 9, 2020,
regarding the legal remedy over IDR 150,000,000,000 credit agreement with regard to
the COVID-19. Based on the facts provided by our Client, here are the concluded sum
mary:
- A credit agreement between Andi Arsyadi as the Borrower and Silver Gate Vent
ure as the Lender occurred on March 10 2020, with the amount of IDR 150.000.
000.000. The agreement signed with the absence of a stamp duty, was for the pu
rpose of buying machineries to which the Lender adopted a fiduciary agreement.
The loan is to be paid in twelve (12) months in two tranches.
- The first tranche repayment was on April 2020, the Borrower paid the amount o
f IDR 50.000.000.000. The second tranche was due on June 2020, the Borrower
wasn’t able to make its second repayment due to the Covid-19 pandemic that ca
used the Borrower’s business activity. The Lender extended the second tranche f
or another 2 months, but the Borrower was still unable to make the repayment.
- On June 13 2020, a warning letter was sent to the Borrower for his failure to fulf
il his obligation. Then, the Lender sold the Security provided by the Borrower, t
o the Chandra Gunawan (as the Third Party) based on a sale and purchase agree
ment on 25 August 2020.

II. REGULATIONS

- Article 1320 in the Indonesian Civil Code: “In order to be valid, an agreement must
satisfy the following four conditions:
1. there must be consent of the individuals who are bound thereby;
2. there must be capacity to enter into an obligation;
3. there must be a specific subject matter;
4. there must be a permitted cause.”
- Article 1243 in the Indonesian Civil Code: “Compensation for costs, damages and i
nterests for the breach of an obligation only becomes obligatory, if the debtor, after ha
 ving been declared to be in default, remains in default, or in case of obligations where
he must give or produce something, is only given after the lapse of a period of time.”
- Article 1245 in the Indonesian Civil Code: “The debtor needs not compensate for c
osts, damages or interests, if an act of God or an accident prevented him from giving o
r doing an obligation, or because of such reasons he committed a prohibited act.”
- Article 1851 in the Indonesian Civil Code: “A settlement is an agreement in which
parties, by handing over, agreeing, or retaining a matter, resolve a matter which is pen
ding suit, or prevent a suit. This agreement shall be valid only if it is concluded in writ
ing.”
- Article 1977 in the Indonesian Civil Code: "Whoever controls (physically) movable
property which is not in the form of interest or receivables that do not have to be paid
upon appointment, is considered the full owner."
- Article 15 Paragraph 3 Law No 42 of 1999: “If the debtor breaches the contract,
fiduciary Receiver has the right to sell the object of Fiduciary on his own behalf. “
- Article 31 Paragraph (1) Law No. 24 of 2009 on the National Flag, Language, Em
blem and Anthem: “The Indonesian language shall be used in a memorandum of und
erstanding or an agreement (including agreements in international public law) which i
nvolve a state institution, a government institution, a private Indonesian entity or an In
donesian citizen.”

III. ASSUMPTIONS

In providing this Legal Opinion, we have assumed that:

a. There are no other documents which are provided to us, aside from information pr
ovided to us as per 10th October 2020, and if they were provided to us would, or
might, cause this Legal Opinion to be incorrect, untrue, or misleading;
b. All statements and written or verbal information provided to us are correct, compl
ete, and in accordance with the actual situation; and
c. To the best of our knowledge, there are no matters that would make the aboveme
ntioned assumptions become untrue.

IV. QUALIFICATIONS
 This Legal Opinion is subject to the following qualifications:
a. This Legal Opinion is strictly limited to the matters stated herein and may not be r
ead as extending by implication to any matter not specifically referred to;
b. This Legal Opinion is provided by us pursuant to the relevant laws and regulation
s of the Republic of Indonesia as applicable on the date hereof. This Legal Opinio
n is made in accordance with our understanding and interpretation to the relevant
laws and regulations of the Republic of Indonesia as applicable on the date hereof.
Nothing in this Legal Opinion guarantees that there will be no change of interpret
ation or views if there is issuance of new laws and regulations in the future with r
espect to the issue being elaborated herein;
c. This Opinion is limited to only certain legal matters in connection with the matter
s stated herein and we have not considered any accounting, commercial, technical,
operational, tax, or financial matter or the financial impact of the matters;
d. The prevailing laws and regulations of the Republic of Indonesia grant full author
ity to each judge or other relevant government institution to examine and adjudica
te and make legal consideration in each case in accordance with the prevailing ma
terial and formal legal principles. In this context we need to explain that the consi
deration or opinion or decision of the judge or such relevant governmental institut
ions may not be the same with our legal analysis stated herein;
e. We are advocates in the Republic of Indonesia and are not expert in nor qualified
to render opinions on the laws and regulations of any other jurisdictions than that
of the Republic of Indonesia. We have not investigated and we do not express or i
mply any opinion on the laws and regulations of any other jurisdictions;
f. Each decision made and/or reached by Client based on this Legal Opinion is solel
y the authority of the management of Client that we have no control over and not
hing in this Legal Opinion implies any guarantee and/or may be construed as a gu
arantee or certainty over any decision made and/or reached by Client; and
g. Client agrees not to use this Legal Opinion as evidence or submitted this Legal O
pinion to any institution, authority, court, and government body for any reason wi
thout our express consent. Client agrees to release, discharge, and indemnify JCG
& Associates Law Firm against any and all form of claim, demand, and compen
sation arising from violating this provision.

V. LEGAL ISSUES
 1. Is the Credit Agreement enforceable despite the absence of stamp duty in it?
2. Can the Borrower be deemed as default?
3. In the event, there are no demand/warning letter provided to the Borrower by the
Lender, can the Lender file a lawsuit based on the default of the Borrower?
4. Who will prevail over the machineries, whether (i) Lender as the fiducia guarante
e based on fiducia agreement; or (ii) the Third Party as the new owner, based on t
he sale and purchase agreement?

VI. LEGAL ANALYSIS

1. Is the Credit Agreement enforceable despite the absence of stamp duty in it?
Wirjono Prodjodikoro defined an agreement as a legal relationship regarding prop
erty between two parties promising or deemed to have promised to carry out som
ething or not doing something with the other party entitled to demand the implem
entation of that promise1.

Occasionally people would think an agreement can only be considered valid if the
re is a signature with a stamp duty. A document can be considered valid without a
stamp duty on the condition that it meets the requirements as stipulated in Article
1320 of the Indonesian Civil Code. By fulfilling the 4 valid conditions of the agre
ement, an agreement becomes valid and legally binding for the parties making it.2

Article 1320 of the Indonesian Civil Code which reads:

1. There must be consent of the individuals who are bound thereby.
An agreement has to be agreed by both parties without any element of
coercion or threat from the other party, then the agreement is deemed to have
fulfilled the first conditions of validity of the agreement, either an oral or
written agreement. An agreement can be made in writing or orally because the
Indonesian Civil Code does not explicitly stipulate the form of the agreement
to be used, except that the law requires a written agreement, such as a share

1
Wirjono Pradjodikoro, Asas-Asas Hukum Perjanjian, (Bandung: Bale Bandung, 1986), p.19
2
Suharnoko, Hukum Perjanjian: Teori dan Kasus, Cetakan Keenam, (Jakarta: Kencana Prenada Media Group,
2009), p. 1-2
 transfer agreement, grant agreement, peace agreement (Article 1851 of the Ind
onesian Civil Code).

2. There must be capacity to enter into an obligation.

According to the second requirement of skills in a person, if a person is
already an adult or is married at the age 20 years old, a person can think
sensibly and act correctly. The age requirement for an adult is 21 years old for
men and 19 years old for women.

3. There must be a specific subject matter.

This third requirement demand there must be certain objects that the two
parties agree on when making the agreement, an object of the agreement that is
agreed must be something or something that is clear and visible.

4. There must be a permitted cause.

Even though everyone is free to enter into an agreement, an agreement that
does not show a lawful cause or is made with a false or forbidden cause has no
legal force (null and void). Furthermore, every agreement made by Indonesian
citizens must use the Indonesian language, this is stipulated in Article 31
Paragraph (1) Law No. 24 of 2009 on the National Flag, Language, Emblem a
nd Anthem.

Based on the article above, a stamp duty is not one of the requirements for a
document agreement. As long as those four conditions are used in the agreement,
the agreement between the two parties is considered valid.

2. Can the Borrower be deemed as default?

By the Borrower’s reason, we can conclude that the Borrower isn’t able to make
its second repayment due to the global pandemic of Covid-19 that occurred in
Indonesia. Covid-19 is a new virus linked to the same family of viruses as Severe
Acute Respiratory Syndrome (SARS) and some other common cold, in which this
situation is included as an uncontrollable circumstance. Then with that reason, as
written in Article 1245 of the Indonesian Civil Code about the Force Majeure,
which reads:

“The debtor needs not compensate for costs, damages or interests, if an act of
God or an accident prevented him from giving or doing an obligation, or because
of such reasons he committed a prohibited act. “

As written in the Article 1245 of Indonesian Civil Code, in this case, based on the
information from our client (“The Lender”), he extended the second tranche for
two months since the Borrower was unable to make the second repayment as his
business was heavily hampered by the pandemic. Which as what we have said
before, that situation is included in the uncontrollable circumstances based on the
Force Majeure. Although two months has been given, the Borrower was still
unable fulfil his obligations, resulting the Lender to send a demand / warning
letter to the Borrower for his failure to fulfill his obligation. But still there was no
feedback from the Borrower. Therefore, on 25 August 2020 “the Security” has
been sold by the Lender to the Third Party.

Article 15 Paragraph 3 Law No 42 of 1999, which read as follows:

“If the debtor breaches the contract, fiduciary Receiver has the right to sell the obj
ect of Fiduciary on his own behalf. “

As written in Article 15 Paragraph 3 Law No 42 of 1999 about the fiduciary guar

antee above, it is cleared that if the Borrower cannot fulfill his obligation or the
Borrower breaches the contract, the Lender has the right to do anything such as se
ll the object of fiduciary on his own behalf. Then, on 28 August 2020, the Lender
is made aware that the Security provided by the Borrower has been sold to
Chandra Gunawan.

In other word, the fiduciary guarantee has been lost. Legal consequences and effo
rts to resolve the destruction of the object of fiduciary collateral in the Lender agr
eement is that the Borrower is still responsible for the refund or credit loan reques
ted.
 3. In the event, there are no demand/warning letter provided to the Borrower b
y the Lender, can the Lender file a lawsuit based on the default of the Borro
wer?
If the Borrower is in default against the agreed agreement, then the interest of the
Lender can be guaranteed and be legally protected by the existence of a fiduciary
agreement. Legal protection is divided into 2 syllables, namely protection and
law. Protection is an act or thing to protect, while based on Wirjono Prodjodikoro
opinion, law is a rule to protect the interests of all parties.3

The existence of a fiduciary agreement has many benefits. According to PA Stein,

one of many benefits are the Lender who holds the fiduciaries will demand the
easiest way to prove the delivery of the Borrower by submitting a valid fiduciary
deed. A deed is used to anticipate the possibility of things are beyond our wishes
and against our will.4 With a valid deed, it promises between the Borrower and
Lender can be stated that regulate a legal relationship.

The existence of an agreement will automatically create an obligation for all

parties involved, to fulfill their achievements. Default can be stated if the
Borrower is unable to meet the performance as determined in the agreement. On
June 13, 2020, the Lender has sent a warning letter to the Borrower for his failure
to fulfill his obligations under Article 1243 of the Indonesian Civil Code, which
determines that the Lender has the right to file a lawsuit based on default from the
Borrower. The settlement can be done through court, namely general courts
through civil lawsuits and commercial courts through bankruptcy suits. There are
commonly 3 legal consequences given to the default, which are:
1. The Borrower is required to pay compensation.
2. The Lender can request the cancellation of the agreement through the court.
3. The Lender can ask for fulfillment of the agreement, or fulfillment of the
agreement accompanied by compensation and cancellation of the agreement
with compensation

3
Wirjono Prodjodikoro, Asas-Asas Hukum Perjanjian, (Bandung: Mandar Maju, 1986), p.20
4
Sri Soedewi Masjoen Sofyan, Hukum dan Jaminan Perorangan, (Yogyakarta: Liberty, 1980), p.40
 4. Who will prevail over the machineries, whether (i) Lender as the fiducia gua
rantee based on fiducia agreement; or (ii) the Third Party as the new owner,
based on the sale and purchase agreement?
Based on the Article 15 Paragraph 3 Law No 42 of 1999, the Lender has the right
to sell the object of fiduciary on his own behalf, if the Borrower cannot fulfill his
obligation or the Borrower breaches the contract. If there is a sale of inventory
items that are guaranteed by fiduciary basis, the buyer is protected according to
Article 1977 Indonesian Civil Code.

This regulation contains the principle of bezit van staat (possession of status),
therefore the enforcement of this principle can be interpreted as the physical
holder of the moving object, considered the legal owner of the movable object. In
this case, the Third Party received the machineries based on a sale and purchase
agreement with the Borrower. If the delivery of goods has occurred, therefore the
ownership rights have also been transferred.

VII. CONCLUSION

Here are the conclusion of the legal issues provided by the Client (“the Lender”) from
us, JCG & Association.

1. A document can be considered legal without a stamp duty if it meets the 4

requirements on the Article 1320 of the Indonesian Civil Code. Which in this
case, the agreement has fulfilled all the given requirements, because the
agreement is agreed by both parties without any threat from other party, the
parties required the age requirement, is agreed upon a specific matter, and is
showing a lawful cause. By the reasoning above, it is cleared that the agreement
in this case is enforceable, and legal based on the legal law of Indonesia.

2. According to the legal law of Indonesia, the Borrower can be deemed as default.
Halfway through the second repayment the Borrower’s business was affected by
Covid-19, causing the agreement to occur in force majeure, to which the Lender g
ave an extended 2 months period for the second tranche and the Borrower was stil
 l unable to pay for his debt. Even though the security (machineries) was sold to th
e Third Party, the Borrower is still responsible for the refund or credit loan.
3. Based on the Article 1243 of the Indonesian Civil Code, the Lender has the right
to file a lawsuit based on default from the borrower as long as the Lender has sent
a demand/warning letter to the Borrower for his failure to fulfil his obligations,
which the Lender did on 13 June 2020.
4. Lastly, we conclude the machineries are legally under the Third Party’s name,
Chandra Gunawan, ever since the sale and purchase agreement settled. And the
buyer will be protected according to Article 1977 Indonesian Civil Code.

This Legal Opinion is addressed to and solely for the benefit of Client and shall not be relied
upon or communicated to any other party for any other purpose, nor quoted or made public in
any way without our prior written consent.