Nominee Agreements Regarding the Control and Ownership of Land Rights in Indonesia (Case Study: Judgment Number 137/Pdt.G/2021/PN Gianyar)

Abstract

The practice of nominee agreements in controlling and owning land rights in Indonesia has emerged as a legal mechanism to circumvent the prohibition on foreign ownership of freehold land under Law Number 5 of 1960 concerning the Basic Agrarian Principles. Under such arrangements, Indonesian citizens are formally registered as legal owners, while foreign nationals exercise actual control and receive the economic benefits of the land. This practice raises legal issues concerning the validity of nominee agreements, legal certainty, and legal protection for the parties involved.This research aims to examine the legal existence of nominee agreements under Indonesian positive law and to analyze their implications for legal certainty and legal protection based on Decision Number 137/Pdt.G/2021/PN Gianyar. The research employs normative legal research using statutory, conceptual, and case approaches. Legal materials consist of primary, secondary, and tertiary sources analyzed descriptively and qualitatively.The research concludes that nominee agreements violate the nationality principle under the Basic Agrarian Law and fail to satisfy the objective requirements for a valid agreement under Articles 1320 and 1337 of the Indonesian Civil Code because they contain an unlawful cause. The Gianyar District Court declared such agreements to constitute legal evasion and therefore null and void. Consequently, nominee agreements fail to provide legal certainty and protection for either party and may also expose notaries and Land Deed Officials (PPAT) to legal liability. Stronger regulations, stricter supervision by the National Land Agency, and greater adherence to the precautionary principle are therefore essential to strengthen legal certainty in Indonesian land law.