Maintaining Debtors' Rights in Cessie Actions Through Implementing the Principle of Transparency

Abstract

Cessie agreements, wherein creditors transfer rights to receivables to another party, are commonplace in the business world. However, under certain circumstances, a cessie agreement can be rendered null and void, leading to legal consequences for the parties involved. This research aims to analyze the legal protection afforded to debtors in the absence of notification regarding cessie actions, particularly in light of the principle of transparency for debtors. The normative legal research employed utilizes a statutory and doctrinal approach. This study found that a cessie agreement executed unilaterally, without the debtor's notification and approval, contravenes the nature of a cessie as stipulated in Article 613 Paragraph (2) of the Civil Code. A cessie agreement requires the approval of all parties involved. Consequently, the failure to fulfill the fourth condition (i.e., an act that contravenes public order and morality) of Article 1320 of the Civil Code renders the cessie agreement null and void. As a result, the receivables remain and cannot be written off, but the original creditor is prohibited from transferring them to new creditors. Debtors should pay close attention to credit agreements with banks, particularly clauses concerning the transfer of receivables via cessie, which must be approved by all parties. Moreover, debtors must understand the legal provisions regarding the submission of lawsuits for unlawful acts if the original and/or new creditors act arbitrarily and cause losses.