Jayabaya University Professor Urges Bankruptcy Law Revolution for National Economy
Jayabaya University Professor, Yuhelson. [Courtesy]

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  • Jayabaya University Professor, Yuhelson, highlights the rescue of Garuda Indonesia as a momentum for a paradigm revolution in bankruptcy law in Indonesia.
  • The concepts of Summum Bonum and Via Pacis are proposed so that liquidation becomes the last resort to maintain national economic stability.
  • Yuhelson proposes a revision of the Bankruptcy Law, legal education, and a shift in practitioners’ mindset to prioritize peace and corporate restructuring.

The dramatic rescue of the national airline, Garuda Indonesia, from the brink of bankruptcy has now become a crucial case study demanding a revolution in the bankruptcy paradigm in Indonesia.

The Professor uses this real example to urge legal practitioners and legislators to no longer view liquidation as the only way out.

In his scientific oration, Yuhelson clearly explains how dangerous it is if bankruptcy law is only seen through a rigid classical lens. He points to the Garuda case as a perfect example.

“With debts approaching Rp100 trillion, if using the classical legal lens, Garuda should have been liquidated,” he said through a written statement.

However, liquidation did not occur at that time. Why? Because there were considerations far greater than just the pile of debt.

“With the concept of Summum Bonum (the highest good), Garuda was saved because there were historical values and sustainability that had to be maintained. We must look beyond the debt figures,” he added.

The rescue of Garuda is proof that maintaining national economic stability and strategic national assets is sometimes more important than merely fulfilling creditor demands fully through asset sales.

The concepts of Summum Bonum (the highest good) and Via Pacis (the path of peace) were introduced by Yuhelson as a new spirit in the enforcement of bankruptcy law in Indonesia. He emphasizes that the main goal of the bankruptcy process should no longer be to ‘kill’ the company.

“My finding in this oration is that the highest choice in bankruptcy is to achieve peace in order to maintain national economic stability. If everything ends with liquidation, our economic system could collapse,” he explained.

For him, liquidation must be positioned as the very last resort (ultimum remedium), not the main goal. He invites legal practitioners to change their mindset and prioritize restructuring options and peace between debtors and creditors.

To realize this ‘revolution’, Yuhelson proposes three concrete steps that must be taken immediately:

  1. Revision of Law No. 37 of 2004: The spirit of peace and economic rescue must be explicitly included in the law.
  2. Higher Education: Bankruptcy Law must become a mandatory subject in law faculties, given its very high relevance to the business world.
  3. Mindset Change: Legal practitioners, from curators to judges, must be encouraged to seek peaceful solutions, not just pursue fees from the liquidation process.

Garuda Indonesia

Garuda Indonesia is the national airline of Indonesia, named after the mythical bird Garuda, a prominent figure in Hindu and Buddhist mythology that serves as the country’s national symbol. Established in 1949, the airline began operations in 1950 and has since grown to become a major carrier, connecting Indonesia to destinations across Asia, Australia, and Europe. It is recognized for its service quality and has earned a reputation as a leading airline in the region.

Jayabaya University

Jayabaya University is a private university located in Jakarta, Indonesia, founded on October 5, 1958. It was established by the Jayabaya Foundation and named after the legendary 12th-century Javanese king and prophet, Prabu Jayabaya, who is known for his famous prophecies. The university has since grown to offer a wide range of academic programs, contributing to higher education in Indonesia.