The Ambiguity Application of Business Judgment Rule Doctrine As Director Immunity Right in the Company Law (Analysis of Supreme Court Verdict No 121k/Pid.Sus/2020)

  • Alum Simbolon Faculty of Law Pelita Harapan University
  • Calvin Pramarta Faculty of Law Pelita Harapan University
Keywords: Board of Directors, Limited Liability Company, Business Decisions, Good Faith, Well-Informed

Abstract

Director is personally liable for the company's losses if proven guilty or negligent in carrying out his duties and may be personally sued by the shareholder as a result of his negligence or mistake in carrying out the management of the company which causes the company to suffer losses. This surely emits fear for Directors and hinders them in making important decisions for the Company. Essentially in carrying out their duties, Directors are always faced with uncertain so that fear of threats to the director’s personal liability is one of the factors that reduces performance. This research uses normative-empiric research by analyzing the written law from such various aspects as theory, history, philosophy, comparison, structure and composition, scope and material, consistency, general explanation, and article by article, formality, and binding power of law, and mainly BJR norm application in the Supreme Court Verdict Number 121K/PID.SUS/2020

The results of this research shows that Judges in the Supreme Court Decision Number 121K/PID.SUS/2020 didn’t consider the criteria for "readiness of information" and "the criteria for taking action to prevent continued losses" which are the essential criterias of the business judgment rule but only considered PT Pertamina has an asset impairment, PT Pertamina Hulu Energi is a subsidiary of a state-owned Enterprise, the Defendant (incasu Karen Agustiawan) has obtained permission from the Board of Commissioners, and the business decision doesn’t contain elements of fraud, conflict of interest, unlawful acts and intentional errors, however these considerations create ambiguity and potential new legal disputes. because the actions of the Defendant (incasu Karen Agustiawan) have fulfilled all elements of the business judgment rule in Article 97 paragraph (5) of the Company Law, although the legal considerations of the Panel of Judges are incomplete, the business judgment rule can still be applied in the Supreme Court Verdict Number 121K/PID.SUS/2020.

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Published
2023-03-09
Section
Articles
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