On Thursday, March 3, 2016, from 1:00–3:00 PM WIB, at the Debate Room of the Faculty of Law of Universitas Gadjah Mada, the Research and Community Service Unit (UPPM FH UGM) resumed its monthly Academic Discussion program after a temporary hiatus. This edition of the discussion was introduced under a new brand, namely “Bulaksumur Legal Discussion” (BLD). Carrying the theme “Coercive Power: Between Legal Certainty and Utility,” the discussion featured Taufiq El Rahman, S.H., M.Hum., whose expertise includes contracts, Build-Operate-Transfer (BOT) agreements, and credit agreements. The session was moderated by Ninik Darmini, S.H., M.Hum., both of whom are lecturers at the Department of Civil Law, Faculty of Law UGM.
The inaugural BLD event was officially opened by Sulastriyono, Vice Dean for Research and Community Service. In his remarks, he expressed enthusiasm for the revival of academic discussions as a means of fostering a stronger culture of legal discourse through forums examining the increasingly complex development of legal science and contemporary legal issues. This was followed by remarks from Pitaya, Head of the Community Service Unit of the Faculty of Law UGM. He emphasized that the BLD was intended not only as an academic forum for lecturers but also as a space for students to sharpen their legal reasoning through two-way discussions with experts in relevant legal fields. Furthermore, the discussion served as a form of accountability for research conducted by the academic community of the Faculty of Law UGM, particularly lecturers. The first session was attended by approximately 30 participants, a relatively high number compared to previous discussions.
The discussion began with Article 11 of the Fiduciary Security Law, which places the holder of fiduciary security as the party entitled to register fiduciary guarantees. Previously, the registration process was conducted directly at banks or creditors, or through assistance from notaries. However, a Circular Letter issued by the Directorate General of General Legal Administration (AHU) introduced a new online registration mechanism accessible only through notaries. This became a notable issue because the Circular Letter practically eliminated the right of fiduciary recipients, who according to statutory law were entitled to register fiduciary guarantees themselves. Consequently, the rights of fiduciary holders were reduced while authority was transferred to notaries, requiring additional fees for notarial services to complete registration.
Particular attention was also directed to Article 9 paragraph (1) of Law Number 40 of 2007 concerning Limited Liability Companies, which stipulates that company establishment registration may be conducted jointly by the founders. However, through the Circular Letter, this authority effectively became exclusive to notaries. In practice, direct registration procedures often resulted in illegal levies aimed at accelerating the registration process. The implementation of the online system was intended to eliminate such practices. This policy was established through Circular Letter of the Director General of General Legal Administration Number AHU-06.OT.03.01 of 2013 concerning the Electronic (Online) Fiduciary Registration Administration System. The Circular Letter provided practical benefits by minimizing illegal levies and increasing state revenue through taxes paid during fiduciary registration. Nevertheless, the online system also created concerns regarding legal certainty because only notaries were authorized to perform registrations under the Circular Letter, differing from Law Number 42 of 1999 concerning Fiduciary Security, which granted that right directly to fiduciary holders.
As a result, fiduciary holders were compelled to transfer their registration rights to notaries through what was referred to as “coercive power.” Regarding the validity of such coercive authority in fiduciary registration practice, questions emerged as to whether there existed a defect of consent. According to Taufiq El Rahman, this situation could not be categorized as a defect of will because the coercion did not originate from one of the contractual parties, but rather from regulatory provisions. Therefore, the arrangement remained legally valid as long as the agreement fulfilled the legal requirements of a contract.
Sociologically, the issue had not yet generated significant objections because few parties had formally challenged the policy. However, weaknesses within the online registration system remained evident, including situations where creditors could not execute fiduciary guarantees due to discrepancies between registered specifications and the actual goods controlled by debtors, such as errors in vehicle chassis numbers. From the perspective of state intervention, the Circular Letter was intended to reduce potential conflicts and prevent domination. Ironically, in practice, the regulation itself generated a new form of dominance exercised by notaries. This returned the discussion to the broader tension between legal certainty and utility. Law, fundamentally, aims to provide legal protection through certainty, justice, and utility. Yet, in practice, these objectives often cannot be realized simultaneously. One principle may dominate while diminishing another, but without entirely eliminating the legal rights of other legal subjects guaranteed under statutory law.
