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Civil Courts and the Development of Commercial Relations: The Case of North Sumatra

Published online by Cambridge University Press:  02 July 2024

J. Joseph Burns
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Abstract

This study of the relationship between businessmen and the civil courts in the Indonesian province of North Sumatra finds that Sumatran businessmen seldom use the courts either to collect retail debts or to settle commercial disputes among themselves. In fact, they were found to litigate disputes only when they hoped to salvage something from a failing business relationship, or when simply opening litigation could by itself help discharge a bureaucratic responsibility, satisfy a personal grudge, or harass a defendant into making an out-of-court settlement. The unusual cost structure of the civil courts, relatively low formal costs and relatively high informal costs, contributed to an unfavorable image of the courts as expensive, arbitrary, and inefficient dispute settlement mechanisms in the eyes of one important group of businessmen, the rubber exporters. Other characteristics of the exporters, their trading partners, and the social and economic relationships among them were found, however, to present more basic obstacles to the use of the courts in settling commercial disputes. These results then suggest some general conditions under which the capacity of a legal system to influence the development of commercial relations is severely limited.

Type
Research Article
Information
Law & Society Review , Volume 15 , Issue 2 , 1981 , pp. 347 - 368
Copyright
Copyright © 1981 The Law and Society Association

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