Cross-Border Insolvency of Multinational Companies in Indonesia: Jurisdictional Challenges and the Application of the Universalism Principle

Abstract

The increasing globalization of business activities has led to a growing number of cross-border insolvency cases involving multinational companies with assets, creditors, and debtors located in multiple jurisdictions. This situation creates various legal challenges, including jurisdictional conflicts, the recognition of foreign court decisions, and differences in national insolvency laws. In Indonesia, the regulation of cross-border insolvency remains limited because Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations does not comprehensively regulate insolvency proceedings involving foreign elements. This study aims to analyze jurisdictional conflicts in cross-border insolvency cases involving multinational companies in Indonesia and to examine the application of the universalism principle as an approach to resolving such disputes. This research employs a normative legal research method using statutory, conceptual, and comparative approaches. The legal materials consist of legislation, international legal instruments, scholarly books, and journal articles related to international insolvency law. The findings indicate that Indonesia still faces significant legal challenges in handling cross-border insolvency, particularly regarding the recognition of foreign insolvency proceedings and judicial cooperation. Therefore, legal reform through the adoption of internationally recognized principles, including the UNCITRAL Model Law on Cross-Border Insolvency, is necessary to enhance legal certainty, judicial efficiency, and cross-border cooperation in insolvency proceedings.