Acknowledgement of Unjust Enrichment to Achieve Corrective

Justice in the Path of Indonesian Law of Obligations Reform

Faizal Kurniawan, Erni Agustin, Rizky Amalia

Faculty of Law, Universitas Airlangga, Indonesia

Keywords: Corrective Justice, Loss, Unjust Enrichment.

Abstract: The recent development to claim damages on the basis of either breach of contract (wanprestatie) or unlawful

act (onrechtmatige daad) would not provide satisfactory grounds to the question of justice. There will be a

situation in which that no one shall be unjustly enriched at the expense of another which all outside the scope

of contract and tort. This has led to the existence of an independent legal doctrine known as the unjust

enrichment. It is among the most debated private law subjects today in asking for justice. The corrective

justice brings to the remedial relation between the plaintiff and the defendant; it is solely concerned with the

norm of justice that provides reasons for the restitution. The corrective justice properly evaluates the structure

of unjustness to both sides, i.e. the plaintiff and the defendant. It gives the effect to the restitutionary

proprietary interests rather than compensation. This article elaborates the law of unjust enrichment as the

ground for the restitution in conjunction with the corrective justice. Furthermore, this article focuses on the

theoretical foundation of corrective justice to meet the unjust enrichment criteria.

1 INTRODUCTION

In the last few decades, the debate on Law of

Obligations (Worthington, 2003) focuses on the

attempt to discover the new basis related to the

methods of restitution or indemnification for damages

arising from the situation in which there is no

contractual relationship between the parties. (Stone,

2000) To date, the basis used to demand restitution or

indemnification in the Civil Code are dominated by

two basic grounds, that is the parties’ contractual

relationship or the existence of unlawful acts.

(Agustina, 2012) However, as time goes by, these two

grounds are no longer considered to be effectively

used in the development of law. These two grounds

are deemed unable to accommodate a situation where

there is no contractual relationship between the

parties and also no unlawful act has been conducted

by the beneficiary of the circumstances. (Stone, 2000)

The most obvious and often used example to describe

this situation is the occurrence of payment errors.

A customer who wrongly paid his bills twice

should be entitled to a repayment of the

second payment. However, in this kind of

situation, the second payment made by the customer

was done without any contractual relationship with

the seller, or does the seller make any mistake that

causes the customer to make payments the second

time. In other words, the customer is unable to file a

lawsuit based on a contractual relationship or

unlawful acts. This is clearly contrary to the basic

principle of justice as one of the ultimate legal

purposes, between the purpose of legal certainty and

legal benefit. To resolve such issue and establishing a

new concept of the fulfillment of justice, the concept

of unjust enrichment could be applied. Black’s Law

Dictionary (1990) defines unjust enrichment as:

“a general principle that one person should not be

permitted to unjustly enrich himself at the expense of

another but should be required to make restitution of

property or benefits received, retained, or

appropriated, where it is just and equitable that such

restitution be made, and where such action involves

no violation or frustration of law or opposition to

public policy, either directly or indirectly”.

Some literature and articles mention that the

application of unjust enrichment doctrine is to

actualize the corrective justice doctrine. (Barker,

1995) Corrective justice concept itself is derived from

Aristotle whom initiated the concept of justice.

Aristotle (1894) stated that liability is a legal response

to unjustness. Aristotle further claimed that the

concept of justice can be distinguished into two types,

396

Kurniawan, F., Agustin, E. and Amalia, R.

Acknowledgement of Unjust Enrichment to Achieve Corrective Justice in the Path of Indonesian Law of Obligations Reform.

DOI: 10.5220/0010052803960404

In Proceedings of the International Law Conference (iN-LAC 2018) - Law, Technology and the Imperative of Change in the 21st Century, pages 396-404

ISBN: 978-989-758-482-4

i.e. distributive justice and corrective justice.

Distributive justice is defined as, ‘manifestation of

distribution of honour or money or the other things

that are able to be divided; among those who have a

share in the constitution, which may be allotted

among its members in equal or in unequal

shares.’(Rawls, 1992) Corrective justice, in the other

hand, is defined as the actions conducted to balance

something unbalanced due to unjustness.

Initially, corrective justice is only utilized as the

basis to determine justice and liability in the unlawful

acts, (Coleman, 1992) while distributive justice is

used as the basis of fair distribution of rights and

obligations between the parties in a contractual

relationship. (Hernoko, 2008) This is drawn from the

charasteristic of corrective justice that seeks to

eliminate unjustified gain achieved on the account of

another party’s loss. From the corrective justice

doctrine, the beneficiary of an unjustified gain has the

obligation to return the injured party to their original

state. (Epsein, 1995) On the contrary, distributive

justice emphasizes more on the efforts to provide or

divide the rights and obligations of the parties

proportionally; indicating that there is a contractual

relationship as the basis to place the provisions of

rights and obligations distribution. (Weinrib, 2009)

The consequence of conceptual separation between

distributive justice and corrective justice as claimed

by Aristotle is that distributive justice cannot be

applied as the basis of the emergence of someone’s

liability to another, (Klimchuck, 2004) but corrective

justice is deemed to be more appropriate to be the

basis of consideration of the liability’s emergence.

The presence of unjust enrichment doctrine in the

Civil Law system is well-known. However, the scope

and setting of unjust enrichment are different in each

and every country. The Netherlands, for instance,

acknowledged the concept of unjust enrichment in the

Article 212 Book 6 of NBW which essentially

regulates that ‘A person who has been unjustifiably

enriched at the expense of another is obliged, insofar

as reasonable, to make good the other’s loss up to the

amount of his enrichment.’ (Warendorf, 2009) Such

condition demonstrates that the unjust enrichment

criteria in the Netherlands are very wide, i.e. as long

as the return is ‘reasonable’ and can be calculated

nominally, then the party obtaining the wealth or

property in the ‘unjust’ way shall return the property

to the rightful party. Meanwhile, in the United States

of America (‘USA’), based on the Restatement of the

Law (Third) Restitution and Unjust Enrichment, the

unjust enrichment criteria are a. A benefit which has

been unjustly received (the ‘enrichment’); b. A loss

or detriment suffered, usually by the plaintiff; c. A

rule of law which deems the enrichment (or the

retention of it) ‘unjust’; d. A prima facie duty to make

restitution; e. The absence of a valid legal basis for

the payment or transaction (including voluntariness

or election); and f. Absence of a defence.

In Indonesia, the concept of unjust enrichment is

better known and widely discussed as a concept in the

field of the Criminal Law, especially the Law of

Corruption, which is adapted from the provisions of

Article 20 of the United Nations Convention Against

Corruption (“UNCAC”) in 2003 that has been ratified

by Indonesia through the Law No. 7 of 2006 on the

Ratification of the United Nations Convention

Against Corruption. The concept of unjust

enrichment in the Article 20 of UNCAC is termed as

illicit enrichment which can be freely translated as the

wealth of unclear origin or the unnatural wealth.

Article 20 of UNCAC states that:

“Subject to its constitution and the fundamental

principles of its legal system, each State Party shall

consider adopting such legislative and other

measures as may be necessary to establish as a

criminal offence, when committed intentionally, illicit

enrichment, that is, a significant increase in the assets

of public official that he or she cannot reasonably

explain in relation to his or her lawful income.”

The concept of unjust enrichment that applied in

Indonesia is clearly different to the initial concept of

unjust enrichment that is derived from the Civil Code,

especially in the field of Property Law. Under such

circumstances, Indonesia should further regulate

unjust enrichment as the basis of civil liability to

respond to the unrest and public demand for justice,

especially in the existing business relationships in the

society, considering the concept of liability known in

Indonesia so far, namely the liability based on the

contractual relationship and the liability based on the

unlawful acts, is still unable to accommodate justice

and development of the society. For that purpose, this

article attempts to elaborate the concept of unjust

enrichment in the application as the basic claims for

damages or returns in Indonesia based on the

corrective justice doctrine, with the focuses of the

discussion as follows: 1) the criteria for profit and loss

in the unjust enrichment, and 2) the meaning of

corrective justice as the philosophical foundation for

determining the unjust enrichment criteria.

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397

2 THE PROFIT AND LOSS

CRITERIA IN UNJUST

ENRICHMENT

Unjust enrichment is a form of legal doctrine formed

in order to establishing a just civil relationship,

especially in business activities. The concept itself is

based on the principle that ‘one shall not be allowed

to unjustly enrich himself at the expense of another’.

In the last few decades, unjust enrichment is

developed as the basis for claiming indemnification

within Common Law system, i.e. the principle that ‘A

person who has been unjustly enriched at the expense

of another is required to make restitution to the

other’ in the Restatement of the Law (Third)

Restitution and Unjust Enrichment which replaced

the Restatement of Restitution (1937). In contrast,

unjust enrichment has long been known in Civil Law

system. (Diaz, 2007) The presence of the unjust

enrichment doctrine firstly established within the

Civil Code in the mid-1980s and since then, became

a vital doctrine in the Civil Law system.

In the Netherlands, the doctrine of unjust

enrichment began in 1992 through the provision of

unjust enrichment in Article 6: 212 of

NBW(Verhoeff, 2016) Meanwhile in Indonesia,

some Scholars argue that the doctrine of unjust

enrichment is equal to the provision of Article 1359

paragraph (1) of BW regarding the unpaid payments.

The article regulates that ‘each payment presumes a

debt; each payment made which was not pursuant to

a debt may be reclaimed.’ However, this paper argues

that the concept of unjust enrichment cannot be

equalized with the concept of unpaid payment within

Article 1359 paragraph (1) of BW.

The Law of England establishes that as an ‘unjust’

act must satisfy one of the following factors: ‘a)

Mistake of fact; b) Mistake of law; c) Duress; d)

Undue influence; e) Total failure of consideration; f)

Miscellaneous policy-based unjust factors; g)

Ignorance/powerlessness; h) Unconscionability; i)

Partial failure of consideration; j) Absence of

consideration.’(Vout, 2005) Based on those criteria of

unjust enrichment, it can be comprehended that the

scope or jurisdiction of the unjust enrichment

application varies according to its region. Therefore,

it is needed firstly be determined the scope of unjust

enrichment application so then the parties will be able

to undertand the limit of unjust enrichment.

In overcoming such problems, Common Law

system applies the limitation to the right of restitution

for payment error. Such restitution can only be

granted if the transferor does not intend to make the

payment or transfer in the first place. The transferor

in requesting the restitution then has the obligation to

provide evidence, supporting that they have no

intention to send their fund or property to the party

receiving the payment.

However, a different approach might apply in a

case between a house owner and a house decorator.

The evidence to establish that the house owner has no

intention to pay the decorator after the decoration has

been done, is extremly hard to be submitted. This is

due to the fact that the house owner enjoy benefit in

the form of house decoration, and regardless the

decorator itself being commissioned or not by the

house owner, the benefit achieved brought the right

of payment for the house decorator.

Both examples above demonstrate the firm

differences in applying the unjust enrichment

doctrine. In practice, however, it could be

indistinguishable on which position does someone

making the payment currently in. To solve such an

issue, Common Law creates a borderline to

distinguish when the payment can be withdrawn and

when the payment is binding so that no withdrawal or

refund can be made.

The first restrictive mechanism is the wrong

intention (viated intention) which could be the basis

for the paying party to argue that they do not intend

to grant or make such payment to the party receiving

the payment. In addition, as an effort to limit the

number of proposed restitution requests, Common

Law system also differentiates the ‘causal mistakes’

where the paying party commits a misstatement or

there is a defect in the intention of the paying party,

and the ‘causal mispredictions’ where the paying

party makes a mistake in calculating the business risk.

In the case of ‘causal misprediction’, the claim of

restitution cannot be justified.

Secondly, the ‘failure of basis’ or the ‘failure of

consideration’ could also be used as the mechanism

to request restitution. The ‘failure of consideration’ in

unjust enrichment means a failure of implementation,

but it does not mean that there is a contractual

relationship indicating a contractual obligation to be

implemented. The ‘failure of consideration’ in unjust

enrichment is unique and different from the concept

in the contract law which defines the ‘failure of

consideration’ as the state of ‘no promised counter-

performance’; making no binding contract can be

concluded under the ‘failure of consideration’. For

instance, the house owner paid the house decorator

but the decorator does not do their work. In such

condition, the payment given could be restituted

given the fact that the payment in the first place is

intended to pay the decorator to decorate the house.

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In this circumstance, there is no viated intention from

the paying party. Thus, the paying party can only

claim that his contract with the decorator is void.

Such a claim can be done based on tort or based on

the ‘reliance damages’ of payments made through

unjust enrichment.

Those two limitations are considered by modern

scholars as an outdated theory and could no longer

apply in today’s legal system. Nowadays, the

limitations are reformulated from the ‘viated

intention’ into the ‘unintended transfer’ because

legally, the intention of the paying party is to engage

in a contractual relationship and to make a legally

binding payment. Yet, the request of restitution is

made because the contract is defective. (Vout, 2005)

In a similar vein, the second limitation is altered from

the ‘total failure of consideration’ into ‘unintended

gift’. This formulation is used when the payment

made as a result of a commercial engagement, not as

a gift. In other words, the paying party does not intend

to award a gift to the party receiving the payment.

Moreover, the modern jurists pointed out that if a

contract is void whereas one of the parties has not

made any achievements or obligations under such

contract, then the party who has not obtained the

contra-achievement may file a claim on the basis of

unjust enrichment. The claim cannot be proposed

based on the material claim because the status of the

claim is in personam not in rem, in the sense that what

the plaintiff initially demanded the performance of

the defendant's duty, not the demand to return the

payment given to the defendant.

In personam jurisdiction is a jurisdiction over

individual (person), which means that the court has

the authority in deciding the case of the defendant for

the unlimited amount and concerning all of his assets.

Meanwhile, in rem jurisdiction is a jurisdiction over

things (res) in the forum country area, which is

directly or indirectly related to the encountered case.

(Harley, 2010) However, in Indonesia, the claim that

distinguishes the in personam and the in rem lawsuit

has yet been used nor understood by legal

practitioners in Indonesia.

Based on the explanation supra, it can be derived

that the concept of unjust enrichment in the first stage

is known as one of the engagement forms that creates

rights and obligations, in addition to the commitments

arising out of the agreement. As the basis for the

emergence of the engagement, unjust enrichment

doctrine also indirectly raises the rights and

obligations of the parties for the profit and loss arising

from the state of unjust enrichment. In this case,

Kantian attempted to interpret Aristotle’s original

idea of the relationship between rights and obligations

by stating that the relationship between profit and loss

refers to as the relationship between rights and

obligations. Aristotle (1894) observed that:

‘Gain’ is what it is generally called in such cases,

even though in certain cases it is not the appropriate

term, for instance, for one who struck another – and

‘loss’ for the one who suffered-but when the suffering

is measured, it is called a loss for one party and a

gain for the other.”

Based on Aristotle’s observation above, it can also

be taken into account that the position of profits and

losses is a mutual reciprocity, that if a party earns

profits then in the other hand, another party will

receive losses. Bearing in mind such position,

Aristotle added that the corrective justice aspires the

equality between the parties, so that if there is an

event which disturbs the equality between parties and

causing unjustness, then the corrective justice seeks

to make the failing party to correct the losses that have

occurred by returning the profit to the suffering party.

By doing so, at a time the act eliminates both profit

and loss, the parties will then return to the equal

position again. (Weinrib, 2012)

Aristotle considered that it is the duty of a judge

to be able to restore justice in the form of equality

between such profits and losses among the parties.

(Harahap, 2005) Thus, the emerged profits and losses

also must have interrelated relationship. However,

this relationship will then restricts the demand for

restitution against a person, in which someone cannot

demand a refund of payment to any person as he

pleases, but these demands can only be requested to

the parties who clearly benefit from the harm he

suffers. This is what distinguishes the corrective

justice and the distributive justice, whereas the

distributive justice involves various profits and losses

in accordance with several criteria. Within

distributive justice, instead of solely putting one party

as the perpetrator and the other as the injured party,

distributive justice further divides the existing profits

and losses to all parties. Furthermore, distributive

justice does not limit itself to the relationship of two

parties, but it can also be constructed between more

than two parties. (Weinrib, 2012)

The concept of profit and loss in unjust

enrichment cannot be equalized with the profit and

loss of engagement arising from the contractual

relationship or unlawful acts. In Indonesia, the

formation of loss within its civil code originated from

the tort of unlawful acts. Based on the provision of

Article 1246 of BW, it can be seen that the element of

loss in tort consists of cost, loss, and interest.

(Muhammad, 1982) At the same time, the losses in

unlawful acts are not clearly stipulated. It is only

Acknowledgement of Unjust Enrichment to Achieve Corrective Justice in the Path of Indonesian Law of Obligations Reform

399

slightly appear within Article 1371 paragraph (2) of

BW and Article 1372 paragraph (2) of BW which

indicates that the losses due to unlawful acts are only

in the form of scades or losses only. Furthermore, the

losses in unlawful acts include material losses and

immaterial losses that could be assessed by money,

while the losses in tort are only in the form of material

losses. (Agustina, 2002)

In the concept of corrective justice, the concept of

loss is formed through the connection between loss

suffered and benefit gained by other through unjustly

manner. (Weinrib, 2012) The emerged loss due to the

unlawful acts, for instance, appears when A injures B,

thus the loss suffered by B can be regarded as a loss

if the loss can be measured and it benefits other party

at the same time.

3 CORRECTIVE JUSTICE AS

THE PHILOSOPHICAL

FOUNDATION TO

DETERMINE UNJUST

ENRICHMENT CRITERIA

The term ‘unjust’ in the unjust enrichment doctrine

indicates that this doctrine closely related to the

principle of justice since the concept of ‘unjust’

should clearly describe the justice itself. (Susanto,

2010) In relation to the concept of ‘unjust’, Peter

Birks mentioned that ‘…“unjust” can never be made

to draw on an unknowable justice in the sky.’(Birks,

1985) According to Peter Birks’ the discussion on

unjust concept cannot be separated from the

discussion of the concept of justice itself. The

question regarding justice concept is the fundamental

question that always becomes the main topic of

discussion all the time. Similarly, Robert Reiner in his

work ‘Justice’ assets discussion on the concept of

justice as an ‘essentially contested concept’. (Penner,

2004)

The problem arisen from justice, according to

Rawls, is in the abstraction of justice in general on the

various legal relationships emerged in the society. For

instance, the formation of contractual relationship

within certain community that abides to specific set

of rule as their ‘basic structure of society’ and further

determines the value agreed by the aforementioned

community. Within this community, what considered

as justice may contradicts with what the general

community abides to. A well-known example is the

construction of justice within a company which

abides to Company Regulations.

(Wacks, 1995)

On the other hand, Hart establishes the ‘legal

positivism’ which is contradictive with the concept of

the natural law theory. He claimed that (1) a set of

regulations (the primary rules) that is officially

acknowledged is the law, and (2) the society should

accept and adjust themselves to the acknowledged

regulations as the ‘primary rules’. Each regulation

legislated is the enforced and valid law. The

enforceability of the legislated and enforced

regulations is still binding even if the regulations are

never accepted or applied by anyone at all. Moreover,

Hart mentioned that the validity of a regulation

should be distinguished from the effectiveness of the

regulation enforceability. The positivists emphasize

the acknowledgement of a regulation based on the

effectiveness. The ineffective regulation will still

prevail and be valid as long as it is not revoked by the

sovereign authority. The opinion of Hart is read in a

close heart with John Austin’s perspective that

regulations have a sovereign authority if the

sovereign obtains the trust from the society. Thus,

justice within ‘legal positivism’ perspective is viewed

as the justice that is contained in the rules of law

which are institutionalized by the authority.

The scholars’ opinion supra indeed cannot be

directly related to the injustice within ‘unjust

enrichment’ doctrine properly. As it is known that the

most fundamental thing in placing the rationale of

unjust enrichment doctrine is the absence of justness,

one of the possible approaches to be taken is through

assessing whether the increase of benefits obtained by

a person is unjust. Additionally, the appropriate

theory of justice to be applied is the corrective justice

theory. The corrective justice theory weighs upon the

correction toward unjustness occurred between the

parties. The unjustness committed by the defendant

and suffered by the plaintiff is a reciprocal entity that

is mutatis mutandis toward the burden of liability.

Additionally, the concept of unjustness should

also be firmly determined. The unjustness structure

comes from the claim on the rights and the discharge

of obligations. In principle, the corrective justice can

only be enforced if the unjustness structure is aligned

with the correlative structure of liability. Thus, in

submitting a claim under unjust enrichment, the loss

suffered should also be proven to have relation with

the benefit received by the other party.

The correlative structure toward unjustness aims

to reach coherence and fairness. The structure of

correlative justice intended to return the positions all

parties, both the plaintiff and the defendant, in the

equally unjust circumstances, thus each party is given

the burden of liability. The correlative structure is

based on the principle of wholeness (the thematic

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unity). (Harbermas, 1998) Based on the principle of

wholeness, every liability always correlates with the

engagement characteristics emerged from the parties,

for example, the engagement arises from contractual

relationship and unlawful acts which then emerged

from negligence. In creating a correlative structure

that can be determined as an intact (unity) structure,

it shall then be articulated in each legal concept

underlying legal relations between the parties. Ergo,

the concept then becomes the foundation for

determining the single measure of unjustness that

applies to both parties.

It is reaffirmed that engagement is conveyed from

the contract and unlawful acts. The two concepts

bring the different consequences of liability. From the

contractual relationship aspect, in assessing

unjustness in the contractual relationship, it can be

identified through the principle of good faith

underlies the relationship of the contractants.

Normatively, good faith is one of the essential

principles in evaluating the contractual justice made

by the parties. The measurement of contractual justice

is placed on the good faith and good conscience either

from the stage of contract formation to the stage of

contract implementation, even the actualization of the

good faith principle is implicitly contained in the

clauses of the contract. Andrew Wallis adds that the

good faith requires that the parties should conduct the

acts reasonably in achieving the contractual justice.

(Wallis & Maslem, 2001)

On the other hand, for engagement that emerges

from unlawful acts, the approach used is the existence

of violation off the laws and regulations as well as

norms of propriety and prudence. The working power

of the unlawful acts concept must be found between

the points of error or negligence, with the losses

suffered caused by actions that are qualified as

unlawful (wrongful) acts. In creating the collective

structure of unjustness, a form of unjustness that can

be applied to both parties should be formulated. The

purpose of such is to provide evident that the loss

suffered by the plaintiff is indeed a logical

consequence of the mistake or negligence conducted

by the other party. Meanwhile, in unjust enrichment

case, the working power of unjust enrichment concept

does not require the evident of whether there are good

faith and honesty in the contract or whether there is

evidence of error or omission, since the claim of

unjust enrichment is not based on a contractual

relationship or the unlawful acts. The working power

of unjust enrichment concept emphasizes more on the

existence of ‘unjust’ addition of wealth or property

that causes a loss on one party and profit on the other.

(Vout, 2005)

As explained supra, every unjustness or

inappropriateness in acquiring wealth or benefits

resulting in losses on one party and profit on the other

cannot necessarily be said as ‘unjust’. It still needs an

addition condition whereas every advantages or

benefits obtained should fulfil the elements of ‘unjust

enrichment’. In other words, the determination of

unjust enrichment criteria is essential as the basis for

applying the unjust enrichment doctrine. One way to

determine the criteria of unjust enrichment is deriving

it to the corrective justice concept as stated by

Aristotle. (Rawls, 1992)

Aristotle’s perspective on justice starts from that

the virtue idea of natural law. Whereas when justice

is based on the natural law, it cannot change and stay

the same wherever it is, while the justice created by

human is not the same in every place since it depends

on the constitution in which the law is created.

(Llyod, 2002) The perspective of Aristotle provides a

description of law, that the highest law is defined as

someone who never changes, otherwise, the positive

law will always change. In analyzing justice, Aristotle

differentiates justice in general and justice in

particular sense. Generally, there are two concepts of

justice, namely lawfulness and equality. For justice in

particular, there are two kinds of justice, i.e. the

distributive justice and the corrective justice.

In the practice, the general criteria used by some

countries to determine whether one has been enriched

unjustly derived from the verdict of Everhart vs.

Miles (47 Md. App. 131, 136, 422 A 2D) which are:

1) there is a benefit or advantage given or done by the

plaintiff to the defendant, 2) the benefit or advantage

is valuable or understood by the defendant or in other

words, it has the economic value, and 3) the defendant

receives or retains the benefit and it is improper

(unjust) if it is not accompanied by the payment.

The three criteria of unjust enrichment are the

results of Aristotle’s classical theory regarding the

corrective justice that attempts to eliminate the

mistakes towards advantage that is received unjustly

by a person and the disadvantage suffered by another

person on the other side. (Weinrib, 2005) Aristotle

also suggested the concept of liability, which is a

form of responses toward the unfair profit received by

the defendant against the loss suffered by the plaintiff,

in which, if there is an unjust enrichment, then there

is an obligation for the beneficiary to make restitution

to the suffering party.(Smith, 1992

)

The thing that differentiates the application of

unjust enrichment among countries lies on the scope

of improper acts (unjust) as one of the criteria of

unjust enrichment. Based on the English Law, it must

meet one of the following factors to state the

Acknowledgement of Unjust Enrichment to Achieve Corrective Justice in the Path of Indonesian Law of Obligations Reform

401

existence of unjust enrichment: a) Mistake of fact; b)

Mistake of law; c) Duress; d) Undue influence; e)

Total failure of consideration; f) Miscellaneous

policy-based unjust factors; g)

Ignorance/powerlessness; h) Unconscionability; i)

Partial failure of consideration; or j) Absence of

consideration.

In the relation of the concept of appropriateness

(equity) as the a-contrario of the concept of

inappropriateness (unjust), Aristotle argued that

equity is complementary to the fairness of justice and

as the guardian of the law implementation, since

equity is outside the legislation (the law) yet, also

demands justice in certain circumstances. (Curzon,

1987) The existence of equity itself does not mean to

change or diminish justice. However, it is proposed to

correct and/or complete certain individual

circumstances, conditions, and specific cases. In other

words, equity imposes the justice values in the

relationship among individuals with the purpose of

reinstating the parties to their proper positions.

In the countries that adopt civil law system like

Indonesia, the principle of equity is implemented in

the principle of good faith, propriety and merit or

appropriateness. One of the implementations of

equity principle in Indonesian legal system can be

observed in Article 1339 of BW which states that

‘Agreements shall bind the parties not only to that

which is expressly stipulated, but also to that which,

pursuant to the nature of the agreements, shall be

imposed by propriety (billijkheid), customs, or the

law.’ Moreover, the principle of equity is also

reflected in the provisions concerning the unlawful

acts, namely by extending the scope of unlawful acts

based on the Decision of Hoge Raad on January 31,

1919, which extends the criteria of unlawful acts,

including the acts contrary to the accuracy that should

be considered in the public traffic. (Niewenhuis,

2008) Meanwhile, what is meant by the principle of

appropriateness (equity) in the unjust enrichment in

Indonesia has not been arranged.

It is also worth noting that until now, Indonesia

does not yet have a regulation that specifically

regulates the act of unjust enrichment in the field of

Civil Law. Some scholars argue that the concept of

unjust enrichment has been accommodated in the

Law of Obligation, especially in Article 1359

paragraph (1) of BW about the unpaid payment which

states that ‘Each payment presumes a debt; each

payment made which was not pursuant to debt may

be reclaimed’. Referring to the clauses of Article

1359 paragraph (1) of BW, there are some elements

that can be recognized, i.e. 1) there is a payment; 2)

the payment is based on the presumption from the

paying party that they have a debt; 3) the debt, in fact,

does not exist; 4) the payment made can be reclaimed.

Those elements indicate that it is as if payments

are always in the form of money or material.

Meanwhile, as has been previously described, the

scope of the unjust enrichment doctrine is not limited

only to the objects of money, but it can also be in the

form of commodity, even the performance that

emerges the rights to file a claim for recovery of

compensation for the benefit.(Stone, 2005) Other

than that, the provision of Article1359 paragraph (1)

of BW also presumably restricts that the payments

made on an unpaid basis are only based on the

mistakes of fact, i.e. due to the prejudice that the

paying party has a debt, yet they actually do not. This

clearly extremely limits the criteria of unjust

enrichment that also can be based on the mistakes of

law, duress, and many other factors. Therefore, it can

be ascertained that the provision of Article 1359

paragraph (1) of BW cannot be equalized to the

concept of unjust enrichment, but only the small part

of the scope of the unjust enrichment concept.

Even if it is presumed similar to the provision of

NBW, Article 1359 paragraph (1) of BW can only be

categorized as a form of performance that is not as

referred in the Article 203 until the Article 211 Book

6 of NBW. Meanwhile, the NBW has regulated unjust

enrichment in the separated subchapters, namely in

the Article 212 Book 6 of NBW. Hence, it is

necessary to regulate the basic application of unjust

enrichment doctrine independently in Indonesian

legislation, with the aim of providing the foundation

for the losing party to claim restitution toward their

wealth or properties despite the condition there is no

contractual relationship as well as there is no error or

negligence in the beneficiary.

The justice and moral values contained in the

unjust enrichment doctrine are the requirements of

providing the legal protection for a person whose

rights are decreased improperly (unjustly by another

party). In this case, although unjust enrichment

doctrine has not yet being accommodated in the

positive law of Indonesia, this paper argues that such

doctrine could and should be applied in Indonesia.

This is in order to achieve the purpose of corrective

justice which attempts to correct the presence of

unjustness in a relationship of a party and another.

Ergo, the loss suffered by the plaintiff and the benefit

enjoyed by the defendant unjustly, can be returned in

its initial equal position.

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4 CONCLUSION

The profit and loss in the unjust enrichment are

defined as a system of mutual reciprocity, in the sense

that when there is a loss on one party, then there will

be advantages on the other side. Unlike the profit and

loss in both the contractual relationship and the

unlawful acts, the profit and loss criteria in unjust

enrichment are more than merely a value that can be

calculated mathematically. Rather, the concept of

profit and loss normatively refers to the distinction

between what the parties discharge and what they

must have in accordance with the norms governing

the interaction or engagement between them. In other

words, the existence of loss and profit alone cannot

indicate the existence of unjust enrichment. In order

to determine the existence of loss and gain in unjust

enrichment doctrine, then the actions which cause

loss and profit must fulfil the criteria of unjust

enrichment. Therefore, the basis for determining the

normative profits and losses is the relevant legal

norms governing the criteria of unjust enrichment

itself.

Corrective justice as the philosophical foundation

of unjust enrichment attempts to eliminate the

unjustified gain which causes loss on the other party

and intended to provide restitution to the injured

party. Hence, the criteria for determining unjust

enrichment should be adjusted to the purpose of

justice that is carried in corrective justice.

5 SUGGESTIONS

1. There should be reformulation toward the basic

criteria of the lawsuit of tort and unlawful acts that

still conventionally become the basis of a

compensation claim against unjust enrichment

doctrine. The repositioning of unjust enrichment

doctrine in Indonesia has been used as the basis

for determining errors in criminal acts should be

returned to its basic purpose, i.e. the Civil Law.

2. In reaching corrective justice, unjust enrichment

doctrine needs to be incorporated into court

decisions by putting back the basic principle of

separation between the lawsuit of tort and the

lawsuit of unlawful acts.

3. The incorporation of unjust enrichment doctrine

also becomes the basis of a change of national

contract law system, especially the law of

obligation as the basis of lawsuit restitution claim

in Indonesia.

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