Auction Types in Indonesia

Generally, auction on Indonesian Dictionary (KBBI) defined as:

auction is sales in front of a crowd (with over-overcome offerings) led by auction officials. Auctioneer is sales with auction procedure

More specifically, Dictionary of Law Complete Edition by M. Marwan and Jimmy P. defined public auction as:

public auction os sales of goods in front of a crowd which held at a certain time and place, that must be preceded by auction announcement through open-offerings or orally with rising or decreasing price or written offerings inside the envelope

Juridically, Indonesian auction laws use Lex Specialis derogate Lex Generalis principle, means general regulations about auction still using Vendu Reglement 28 February 1908 Staatsblad 1908 Number 198 (“VR”), aside for auction special regulations are quite a lot, for example, is Financial Ministry Regulations 106/PMK.06/2013 concerning Auction Implementation Guidelines (“FMR 106/2013”)

Article 1 VR defined the limitation of crowd sales, as follows:

Crowd sales (openbare verkopnigen) is auctioneer or sales of goods to the public with binding price, decreasing price or written offering inside the envelope, or to invited participants, or announced before auction held, or allowed to participate, also have rights to bargaining about price or put the price on a closed envelope

Generally, types of an auction in Indonesia can be divided into 3 (three) types, as follows (i) Execution Auction (ii) Non-Execution Auction (iii) Voluntary Non-Execution Auction

Execution Auction, is an auction that purposed to enforce the judicial decisions or judicial assessment or other equalized documents, and/or enforce legal provisions, for example, court execution auction, auction of execution of bankrupt assets, tax execution auction, etc.

Non-Execution Auction, is an auction to carry out the sale of goods that are required by laws and regulations to be sold by auction, for example, Auction of State/Regional Property, Auction of State Customs Owned Goods, Auction of State or Regional Owned Enterprises, etc.

Voluntary Non-Execution Auction, is an auction for private`s goods, person, legal entity or business entity that auctioned by self-intend (voluntary), for example, Private`s Goods Auction, Auction property Owned by a state or regional owned enterprise in shareholder company form, auction of goods belonging to representatives of foreign countries.

In practice, an auction can be differentiated as (i) Orally Auction and (ii) Written Auction, on Orally Auction, the bid done by orally in front of the auction participants. Aside, on Written Auction, the bid done written, sellers or auction officials have prepared the price of auctioned goods to auction participants. 

By: Jurisdito Hutomo Hardy

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