Constitutional Review of the Two-Creditor Bankruptcy Requirement: MK 266/PUU-XXIV/2026

The Constitutional Court (Mahkamah Konstitusi) decided case 266/PUU-XXIV/2026 on 12 August 2026, a petition for material review of Law 37/2004 on Bankruptcy and Suspension of Debt Payment Obligations (Undang-Undang Nomor 37 Tahun 2004 tentang Kepailitan dan Penundaan Kewajiban Pembayaran Utang) read together with the Civil Code (Kitab Undang-Undang Hukum Perdata). The petitioner was PT Minera Power Generation, a private limited company incorporated under Indonesian law, represented by its director Debbrata Kumar Ghosh. The petition targeted the phrase "dua atau lebih Kreditor" — two or more creditors — in Article 2(1) of Law 37/2004, and asked the Court to rule on how that phrase operates when a creditor derives its standing from an assignment of receivables under Article 613 of the Civil Code.

Legal Reasoning

The Court opened by setting out the basis of its jurisdiction. Under Article 24C(1) of the 1945 Constitution, Article 10(1)(a) of Law 24/2003 on the Constitutional Court as last amended by Law 7/2020, and Article 29(1)(a) of Law 48/2009 on Judicial Power, the Court hears and decides at first and final instance petitions testing statutes against the Constitution. Because the petition tested the constitutionality of a statutory norm — the phrase "dua atau lebih Kreditor" in Article 2(1) of Law 37/2004 — the Court held that it had authority to hear the matter.

The Court then turned to standing. Article 51(1) of the Constitutional Court Law and its Elucidation limit petitions to individual citizens, customary law communities, public or private legal entities, and state institutions who consider their constitutional rights harmed by the statute under review. Applying the five conditions it has used since Decision 006/PUU-III/2005 and Decision 11/PUU-V/2007, the Court asked whether the petitioner held a constitutional right granted by the Constitution, whether that right was considered harmed by the norm under review, whether the harm was specific and actual or reasonably certain to occur, whether a causal link existed between the harm and the norm, and whether granting the petition would remove the harm — the same sequence it applies in other constitutional challenges.

The petitioner grounded its claim in Article 1(3), Article 28D(1), Article 28G(1), and Article 28H(4) of the Constitution, invoking the rule of law, legal certainty and equal treatment before the law, protection of property under its control, and the right to hold property that may not be arbitrarily taken. Its argument treated the two-creditor requirement in Article 2(1) as a threshold condition governing when the state may deploy bankruptcy and debt-suspension machinery against a debtor, and as a safeguard limiting interference with a debtor's civil rights to cases meeting the statutory conditions.

The factual setting recorded in the decision concerns a chain of assigned debt. PT Rwood Resources Indonesia obtained creditor status through an assignment of receivables (cessie) from PT Limas Tunggal. That assigned status was then used to file a suspension of debt payment obligations petition against PT Minera Power Generation and was counted as one of the required creditors, with PT Limas Tunggal as assignor named as the other creditor in the filing. The Commercial Court examined and granted the petition, which ended in a declaration of bankruptcy against the petitioner along with its attendant legal consequences. The constitutional question the petitioner framed from these facts was the absence of any rule stating whether the legal effect of an assignment under Article 613 of the Civil Code can supply the two-creditor requirement in Article 2(1) of Law 37/2004 where both creditors base their claims on the same receivable.

On standing, the Court accepted that the petitioner had explained its qualification as a private legal entity, identified constitutional rights guaranteed by the Constitution, and shown a causal link (causal verband) between the asserted harm and the operation of the contested phrase.

The Ruling

The operative part of the decision is short: "Menolak permohonan Pemohon untuk seluruhnya" — the Court rejected the petitioner's application in its entirety. Article 2(1) of Law 37/2004 stands as enacted, and the phrase "dua atau lebih Kreditor" retains its existing wording. No conditional interpretation was attached to the provision, and no reading of Article 613 of the Civil Code was written into the bankruptcy threshold. The treatment of assigned claims when courts count creditors under Article 2(1) therefore remains governed by the statutory text and by the practice of the Commercial Courts.

The decision sits alongside other statutory regimes that allocate losses among claimants outside ordinary bankruptcy, including the Deposit Insurance Agency's loss allocation powers in bank restructuring, and among constitutional cases addressing categories of debt owed by companies, such as the review of mandatory termination compensation. Petitions of this kind reach the Constitutional Court on a specific set of facts, and the ruling here disposes of the petition as filed.

Read the full decision in the official record.

Methodology: This memo summarises the official decision text and is not legal advice; report corrections to contact@crpg.info.

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