Judicial Sale of Vessels in Indonesia

Originally published in Lexology Panoramic: Shipping 2027.

By Setyawati Fitrianggraeni, S.H., LL.M., FCIArb., FAIADR, Reynalda Basya Ilyas, and Tiyana Sigi Pertiwi, S.H., LL.M.

In brief

A judicial sale in Indonesia follows a final and binding court decision: in civil proceedings the judgment creditor enforces through executorial seizure and public auction, while in criminal proceedings the prosecution office auctions a confiscated vessel. Proceeds are distributed in a fixed order, with sale costs first, then preferred maritime claims, then registered mortgages, and finally unsecured creditors, and a Convention-compliant forced sale extinguishes prior liens so the purchaser obtains clean title. Indonesia is not a party to the Beijing Convention on the Judicial Sale of Ships. The law is stated as at 22 May 2026.

Eligible applicants

Indonesia is not a party to the Beijing Convention on the Judicial Sale of Ships.

In civil proceedings, the party that holds a decision against the vessel owner may apply to the relevant district court to enforce that judgment by way of executorial seizure (executorial beslag) against the vessel and subsequent judicial sale through public auction.

In criminal proceedings, where a vessel has been seized and confiscated by the state in a criminal judgment, it is the prosecution office (kejaksaan) that initiates the auction process through the relevant auction office.

Procedure

The judicial sale of the vessel is carried out within general civil court proceedings that have obtained a final and binding judgment in favour of the claimant. This is part of the execution proceedings. If the respondent refuses to voluntarily comply with the judgment, then the claimant must apply to the district court to enforce the judgment against the respondent.

The respondent will be given a maximum of eight days to comply with the judgment after appearing before the court chair. Otherwise, the district court will issue an order to seize the respondent’s vessel, which will be sold at a public auction (judicial sale). The proceeds of the auction must be distributed to the claimant to satisfy the claim awarded in the judgment and, if applicable, to the relevant parties. The claimant must pay the cost of the public auction to the court in advance, which shall include costs related to the public announcement.

In criminal cases, if the ship is seized and confiscated by the government as an additional penalty to the primary sentence in a final and binding judgment, the prosecution office will act as a seller of the auction and initiate the auction process with the auction office. The proceeds of the auction will be distributed to the government.

The auction office must make two public announcements before the auction is held. The first will be by flyer, physical media, electronic media, or newspaper. The second will be by newspaper and must be published within 14 days of the first announcement and at least 14 days before the date of the auction.

After the auction, each district court may charge different court costs for the judicial sale. This cost may also be incurred from the process within the auction office and for the change or transfer of ownership of the vessel.

Order of priority of claims against the proceeds

The distribution of proceeds from a judicial sale of a vessel in Indonesia is governed by both the general civil law framework as well as the maritime-specific priority regime under the Shipping Law.

Under the Shipping Law and the International Convention on Maritime Liens and Mortgages 1993, as ratified by Indonesia through Presidential Decree No. 44 of 2005, the order of priority of claims is as follows:

1. Costs of judicial sale, execution, and administration, including costs of wreck removal carried out by the government in the interest of navigational safety or environmental protection (article 66 of the Shipping Law).
2. Preferred maritime claims (piutang-pelayaran yang didahulukan) under article 65 of the Shipping Law, in the following order:
   • Crew wages, repatriation costs, and social insurance contributions.
   • Claims for loss of life or personal injury in direct connection with the operation of the vessel.
   • Salvage reward claims, noting that where a salvage claim arises before other claims, it takes priority over all other preferred maritime claims.
   • Port, canal, waterway, and pilotage dues.
   • Tort claims for physical loss or damage caused by the operation of the vessel.
3. Ship mortgage (hypotheek) and other registered encumbrances, ranking according to the date of registration.
4. Unsecured creditors.

Legal effects

The judicial sale of a vessel occurs as an execution or enforcement of a final and binding court decision. It should be carried out following a court decision against the vessel owner as the debtor in the case, whereby the judicial sale of the vessel must pay monetary compensation over the monetary damages or carry out a criminal decision that concerns the vessel.

Under article 12 of the International Convention on Maritime Liens and Mortgages 1993, as ratified by Indonesia through Presidential Decree No. 44 of 2005, a forced sale of a vessel shall extinguish all maritime liens and other encumbrances upon the vessel, provided that the sale was carried out in accordance with the provisions of the Convention, including the required notices to known creditors and lien holders. The purchaser thereby obtains clean title to the vessel free of prior encumbrances.

In practice, when a party purchases or procures a vessel through a judicial sale, they obtain the rights and title as purchaser or owner in good faith. Information related to whether prior liens and encumbrances on the vessel are all lifted may or may not be known and thus not declared by the court or the auction house. If a vessel is sold with liens and encumbrances, the security right holder may file a rebuttal claim against the sale.

Foreign sales

There are no specific regulations governing this matter. Generally, if the sale is carried out in accordance with the statutory provisions in that jurisdiction and is not in violation of or in conflict with Indonesian law, then it shall be recognised by Indonesian law.

Related parts: Hub: Indonesia Shipping Law Guide 2027 | Part 2: Ship Registration and Mortgages in Indonesia: Eligibility, Documents, and the Mortgage Register | Part 7: Ship Arrest in Indonesia | Part 11: Jurisdiction and Dispute Resolution for Shipping in Indonesia

For advice on judicial sale, enforcement, and shipping disputes in Indonesia, contact Anggraeni and Partners at connect@ap-lawsolution.net.