Inherited Colonial Debt and the 1949 Round Table Settlement: Odious Debt and Defect of Consent

Ahmad Ahmad; Nasran Nasran

doi:10.33756/eslaj.v8i2.41353

Inherited Colonial Debt and the 1949 Round Table Settlement: Odious Debt and Defect of Consent

Ahmad Ahmad, Nasran Nasran

Abstract

Under the Financial and Economic Agreement of the 1949 Round Table Conference the newly recognised Republic of the United States of Indonesia assumed Netherlands Indies obligations commonly estimated at 4.3 billion guilders. This article asks what legal status that assumption had, and what legal character the unilateral abrogation effected by Law No. 13 of 1956 bore. The study is normative legal research using statutory, treaty, conceptual, historical and comparative approaches, and applies the intertemporal rule throughout. Because the Agreement allocated the obligations in four enumerated categories, the elements of the odious debt doctrine are tested category by category rather than against the debt as a single mass. They are met in different degrees across the categories, and the doctrine alone cannot ground invalidity because its standing in positive law was and remains contested. The firmer ground is defect of consent: the settlement was concluded in the shadow of force recently used against the Republic, and the right to invoke coercion is not lost through delay. The 1956 measure is accordingly better characterised as the assertion of a defect present from formation than as a breach of pacta sunt servanda.

Keywords

Decolonisation; Defect of Consent; Odious Debt; Round Table Conference; State Succession.

Full Text:

PDF

References

Abi-Saab, Georges. “The Institute of International Law and the Colonial Phenomenon.” AJIL Unbound 117 (2023): 216–20. https://doi.org/10.1017/aju.2023.35.

Aćić, Marko, and Miloš Grujić. “Implementation of the Agreement on the Succession of the Former SFRY.” Acta Politica Polonica 58 (2024): 5–18. https://doi.org/10.18276/ap.2024.58-01.

Adnyani, Ni Ketut Sari, Kadek Dedy Suryana, Ni Made Wiratini, Komang Febrinayanti Dantes, and Princess Alyssa D. Tee-Anastacio. “Integrating State Sovereignty and International Obligations: A Comparison of Indonesian and Philippine International Law into Domestic Constitutional Systems.” Lampung Journal of International Law 7, no. 2 (2026): 119–34. https://doi.org/10.25041/lajil.v7i2.4909.

Amarasinghe, Punsara. “Portuguese Imperial Building in the Kotte Kingdom of Sri Lanka as a Reflection of 16th Century International Law.” Lampung Journal of International Law 5, no. 2 (2023): 113–28. https://doi.org/10.25041/lajil.v5i2.2946.

Anghie, Antony. Imperialism, Sovereignty and the Making of International Law. Cambridge: Cambridge University Press, 2004.

Ansori, Ansori, Godswill Owoche Antai, Paul Atagamen Aidonojie, Muwaffiq Jufri, and Hassan Ismaila Adebowale. “Understanding the Politics of International Law: A Case Study of the Israel–Palestine Conflict.” Lampung Journal of International Law 8, no. 1 (2026): 13–34. https://doi.org/10.25041/lajil.v8i1.5118.

Aust, Anthony. Modern Treaty Law and Practice. 3rd ed. Cambridge: Cambridge University Press, 2013.

Bal, Lider. “Discussions on Authority and Procedure in Withdrawal from International Treaties from the Perspective of International Law.” Public and Private International Law Bulletin 43, no. 2 (2023): 639–79. https://doi.org/10.26650/ppil.2023.43.2.1366123.

Basaran, Halil Rahman. “Odious Debt.” Liverpool Law Review 44, no. 1 (2023): 137–55. https://doi.org/10.1007/s10991-023-09322-0.

Bedjaoui, Mohammed. Towards a New International Economic Order. Paris: UNESCO, 1979.

Bolton, Patrick, and David Skeel. “Odious Debts or Odious Regimes?” Law and Contemporary Problems 70, no. 3 (2007): 83–108.

Booth, Anne. The Indonesian Economy in the Nineteenth and Twentieth Centuries: A History of Missed Opportunities. Basingstoke: Macmillan, 1998.

Buchheit, Lee C., G. Mitu Gulati, and Robert B. Thompson. “The Dilemma of Odious Debts.” Duke Law Journal 56, no. 5 (2007): 1201–62.

Buchta, Tomáš. “Revival or Eternal Death? The Impact of Brexit on Early Bilateral Agreements.” Utrecht Journal of International and European Law 37, no. 1 (2022): 1–18. https://doi.org/10.5334/ujiel.567.

Charter of the Transfer of Sovereignty over Indonesia. Signed at the Round Table Conference, The Hague, 2 November 1949. Reproduced in International Organization 4, no. 1 (1950): 176–77.

Charter of the United Nations. 26 June 1945. 1 UNTS XVI.

Chimni, B. S. “Third World Approaches to International Law: A Manifesto.” International Community Law Review 8, no. 1 (2006): 3–27.

Corten, Olivier, and Pierre Klein, eds. The Vienna Conventions on the Law of Treaties: A Commentary. Vol. 2. Oxford: Oxford University Press, 2011.

Craven, Matthew. “The Problem of State Succession and the Identity of States under International Law.” European Journal of International Law 9, no. 1 (1998): 142–62.

Craven, Matthew. The Decolonization of International Law: State Succession and the Law of Treaties. Oxford: Oxford University Press, 2007.

Crawford, James. Brownlie’s Principles of Public International Law. 8th ed. Oxford: Oxford University Press, 2012.

Dick, Howard, Vincent J. H. Houben, J. Thomas Lindblad, and Thee Kian Wie. The Emergence of a National Economy: An Economic History of Indonesia, 1800–2000. Honolulu: University of Hawai’i Press, 2002.

Dumberry, Patrick. “A Critical Analysis of the Work of the ILC on ‘State Succession in Matters of State Responsibility’: A Missed Opportunity.” Leiden Journal of International Law 38, no. 3 (2025): 550–69. https://doi.org/10.1017/S092215652400058X.

Dumberry, Patrick. “Investment Arbitration Awards Dealing with Recognition in the Civil War in Libya.” AJIL Unbound 119 (2025): 296–300. https://doi.org/10.1017/aju.2025.10041.

Dumberry, Patrick. State Succession to International Responsibility. Leiden: Martinus Nijhoff, 2007.

Feith, Herbert. The Decline of Constitutional Democracy in Indonesia. Ithaca: Cornell University Press, 1962.

Financial and Economic Agreement. Concluded at the Round Table Conference, The Hague, 2 November 1949. Arts. 25–27. Text consulted in International Bank for Reconstruction and Development, Public External Debt of Indonesia, Report No. E 119 (Washington, DC: IBRD, 1950), app. C.

Fuhrmann, Rémi, and Melissa Schweizer. “Ending the Past: International Law, Intertemporality, and Reparations for Past Wrongs.” German Law Journal 26, no. 8 (2025): 1539–59. https://doi.org/10.1017/glj.2025.27.

Furnivall, J. S. Netherlands India: A Study of Plural Economy. Cambridge: Cambridge University Press, 1939.

Gelpern, Anna. “Odious, Not Debt.” Law and Contemporary Problems 70, no. 3 (2007): 81–114.

Graf, Sinja. “Law, Time, and (In)justice after Empire: Germany’s Objection to Colonial Reparations and the Chronopolitics of Deflection.” International Theory 17, no. 1 (2025): 1–28. https://doi.org/10.1017/S1752971924000113.

Howse, Robert. The Concept of Odious Debt in Public International Law. UNCTAD Discussion Paper No. 185. UN Doc. UNCTAD/OSG/DP/2007/4. Geneva: UNCTAD, 2007.

Ibiam, Amah Emmanuel, and Hemen Philip Faga. “Indigenous Peoples’ Rights over Natural Resources: An Analysis of Host Communities Rights in Nigeria.” Lampung Journal of International Law 3, no. 2 (2021): 121–36. https://doi.org/10.25041/lajil.v3i2.2402.

Ibrahim, Johnny. Teori dan Metodologi Penelitian Hukum Normatif [Theory and Methodology of Normative Legal Research]. Malang: Bayumedia, 2006.

International Bank for Reconstruction and Development. Public External Debt of Indonesia. Report No. E 119. Prepared by Andrew C. Huang. Washington, DC: IBRD, 15 November 1950.

International Law Commission. “Draft Articles on Succession of States in respect of State Property, Archives and Debts, with Commentaries.” Yearbook of the International Law Commission (1981), vol. II, pt. 2. UN Doc. A/CN.4/SER.A/1981/Add.1 (Part 2), 20–73.

Kahin, George McTurnan. Nationalism and Revolution in Indonesia. Ithaca: Cornell University Press, 1952.

Khalfan, Ashfaq, Jeff King, and Bryan Thomas. Advancing the Odious Debt Doctrine. CISDL Working Paper. Montreal: Centre for International Sustainable Development Law, 2003.

King, Jeff. The Doctrine of Odious Debt in International Law: A Restatement. Cambridge: Cambridge University Press, 2016.

Koskenniemi, Martti. The Gentle Civilizer of Nations: The Rise and Fall of International Law 1870–1960. Cambridge: Cambridge University Press, 2001.

Lakra, Rudraksh. “Echoes of Empire in Wires and Waves: The Long Shadow of Colonialism in India’s Telecommunications Act 2023.” German Law Journal 27, no. 1 (2026): 108–33. https://doi.org/10.1017/glj.2026.10207.

Lienau, Odette. Rethinking Sovereign Debt: Politics, Reputation, and Legitimacy in Modern Finance. Cambridge, MA: Harvard University Press, 2014.

Lindblad, J. Thomas. Bridges to New Business: The Economic Decolonization of Indonesia. Leiden: KITLV Press, 2008.

Loefflad, Eric. “Unpartitionable: C. H. Alexandrowicz, Sovereign Divisibility, and the Longue Durée of the Polish-Lithuanian Commonwealth.” German Law Journal 24, no. 5 (2023): 912–38. https://doi.org/10.1017/glj.2023.51.

Ludington, Sarah, Mitu Gulati, and Alfred L. Brophy. “Applied Legal History: Demystifying the Doctrine of Odious Debts.” Theoretical Inquiries in Law 11, no. 1 (2010): 247–81.

Luttikhuis, Bart, and A. Dirk Moses, eds. Colonial Counterinsurgency and Mass Violence: The Dutch Empire in Indonesia. London: Routledge, 2014.

Marzuki, Peter Mahmud. Penelitian Hukum [Legal Research]. Rev. ed. Jakarta: Kencana, 2016.

McGregor, Katharine. “Silences and Memories of the Indonesian Revolution and Dutch Colonialism.” BMGN: Low Countries Historical Review 140, no. 2 (2025): 11–22. https://doi.org/10.51769/bmgn-lchr.19569.

Megliani, Mauro. “The Odious Debt Doctrine: The Equitable Rule.” German Law Journal 25, no. 5 (2024): 772–96. https://doi.org/10.1017/glj.2024.21.

Meijer, Hans. Den Haag–Djakarta: De Nederlands-Indonesische betrekkingen 1950–1962. Utrecht: Het Spectrum, 1994.

Michalowski, Sabine. Unconstitutional Regimes and the Validity of Sovereign Debt: A Legal Perspective. Aldershot: Ashgate, 2007.

Nacar, Abdulkadir. “Could VCLT 52 Block a Peace Treaty Entailing Territory Transfer After the Ukraine–Russia War?” Public and Private International Law Bulletin 45, no. 2 (2025): 459–95. https://doi.org/10.26650/ppil.2025.45.2.1662246.

Nesiah, Vasuki. “A Double Take on Debt: Reparations Claims and Regimes of Visibility in a Politics of Refusal.” Osgoode Hall Law Journal 59, no. 1 (2022): 1–36. https://doi.org/10.60082/2817-5069.3740.

Nurhartanto, Gregorius Sri. “The Functions and Importance of Representation of States in Their Relations with International Organizations of a Universal Character.” Lampung Journal of International Law 4, no. 2 (2022): 63–76. https://doi.org/10.25041/lajil.v4i2.2666.

O’Connell, D. P. State Succession in Municipal Law and International Law. Vol. 1. Cambridge: Cambridge University Press, 1967.

Ongiri, Elvis Mogesa. “Decolonizing Intertemporal Law through the Lens of the Mau Mau Reparations Campaign.” AJIL Unbound 119 (2025): 182–87. https://doi.org/10.1017/aju.2025.10017.

Oosterlinck, Kim, Ugo Panizza, W. Mark C. Weidemaier, and Mitu Gulati. “The Odious Haitian Independence Debt.” Journal of Globalization and Development 13, no. 2 (2022): 339–78. https://doi.org/10.1515/jgd-2021-0057.

Oostindie, Gert. Soldaat in Indonesië 1945–1950. Amsterdam: Prometheus, 2015.

Pahuja, Sundhya. Decolonising International Law: Development, Economic Growth and the Politics of Universality. Cambridge: Cambridge University Press, 2011.

Paparinskis, Martins. “Long Live Monetary Gold.” AJIL Unbound 115 (2021): 154–59. https://doi.org/10.1017/aju.2021.14.

Parmar, Swati S. “An Anticolonial Dream against the Disaffection and Dissonance: Teaching the (Other) International Law in India.” Jurnal Hukum Internasional 20, no. 2 (2023): 1–24. https://doi.org/10.17304/ijil.vol20.2.4.

Paulus, Christoph G. “The Evolution of the Concept of Odious Debts.” Zeitschrift für ausländisches öffentliches Recht und Völkerrecht 68 (2008): 391–412.

Perepolkin, Serhii, Tetiana Syroid, and Ievgen Renov. “Development of the Jus Cogens Concept by International Judicial Bodies.” Konstytutsiino-pravovi akademichni studii, no. 1 (2026): 1–12. https://doi.org/10.24144/2663-5399.2026.1.15.

Pirim, Ceren Zeynep, and Emre Öktem. “The Right of Meskhetian Turks to Return to Their Country.” Public and Private International Law Bulletin 44, no. 2 (2024): 433–86. https://doi.org/10.26650/ppil.2023.44.2.1494095.

Proklamasi Kemerdekaan Republik Indonesia. 17 August 1945.

Protschky, Susie, and Pepijn Brandon. “Forum on Decolonisation and Violence in Indonesia.” BMGN: Low Countries Historical Review 140, no. 2 (2025): 1–10. https://doi.org/10.51769/bmgn-lchr.19564.

Ratner, Steven R. “Reparations for Colonialism Beyond Legal Responsibility.” American Journal of International Law 119, no. 3 (2025): 507–29. https://doi.org/10.1017/ajil.2025.10077.

Reid, Anthony. The Indonesian National Revolution 1945–1950. Hawthorn: Longman, 1974.

Reinhart, Carmen M., and Kenneth S. Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton: Princeton University Press, 2009.

Ricklefs, M. C. A History of Modern Indonesia since c. 1200. 4th ed. Stanford: Stanford University Press, 2008.

Sack, Alexander Nahum. Les Effets des Transformations des États sur leurs Dettes Publiques et Autres Obligations Financières. Paris: Recueil Sirey, 1927.

Scarfi, Juan Pablo. “The IDI, the ILA, and Their Impact on the Institutionalization of International Law in the Americas.” AJIL Unbound 117 (2023): 226–30. https://doi.org/10.1017/aju.2023.37.

Shaw, Malcolm N. International Law. 8th ed. Cambridge: Cambridge University Press, 2017.

Shenoy, Amritha Viswanath. “Economic Rights under the UN System and the Creation of a Newer International Economic Order.” Asian Journal of Law and Policy 1, no. 1 (2021): 1–16. https://doi.org/10.33093/ajlp.2021.1.

Shkabaro, Veronika N. “Succession of State Territory.” Alfred Nobel University Journal of Law 1, no. 8 (2024): 113–20. https://doi.org/10.32342/2709-6408-2024-1-8-12.

Simanjuntak, Calvin Paulus Marcelito. “Actio Popularis in International Accountability: A Case Research of the UAE.” Lampung Journal of International Law 7, no. 1 (2025): 1–14. https://doi.org/10.25041/lajil.v7i1.3965.

Soekanto, Soerjono, and Sri Mamudji. Penelitian Hukum Normatif: Suatu Tinjauan Singkat [Normative Legal Research: A Brief Review]. Jakarta: RajaGrafindo Persada, 2015.

Statute of the International Court of Justice. 26 June 1945. 33 UNTS 993.

Theurer, Karina. “Minimum Legal Standards in Reparation Processes for Colonial Crimes: The Case of Namibia and Germany.” German Law Journal 24, no. 6 (2023): 1146–68. https://doi.org/10.1017/glj.2023.81.

Tinoco Claims Arbitration (Great Britain v. Costa Rica). Award of 18 October 1923. 1 RIAA 369.

Treaty of Peace between the United States of America and the Kingdom of Spain. Signed at Paris, 10 December 1898. 30 Stat. 1754.

Triyana, Heribertus Jaka. “Relevance of the Remedial Secession Theory for Indonesia’s Territorial Integrity.” Jurnal Hukum Internasional 21, no. 1 (2023): 1–26. https://doi.org/10.17304/ijil.vol21.1.5.

Ulum, Muhammad Bahrul. “The Changing Notion of State Sovereignty and Legal Personality.” Lampung Journal of International Law 4, no. 1 (2022): 25–38. https://doi.org/10.25041/lajil.v4i1.2517.

Undang-Undang Dasar Negara Republik Indonesia Tahun 1945.

Undang-Undang Republik Indonesia Nomor 13 Tahun 1956 tentang Pembatalan Hubungan Indonesia-Nederland Berdasarkan Perjanjian Konperensi Meja Bundar [Law No. 13 of 1956 on the Abrogation of the Indonesia–Netherlands Relationship Based on the Round Table Conference Agreement]. Lembaran Negara Republik Indonesia Tahun 1956 Nomor 27. https://peraturan.bpk.go.id/Details/51096.

Undang-Undang Republik Indonesia Nomor 86 Tahun 1958 tentang Nasionalisasi Perusahaan-Perusahaan Milik Belanda [Law No. 86 of 1958 on the Nationalisation of Dutch-Owned Enterprises]. Lembaran Negara Republik Indonesia Tahun 1958 Nomor 162.

United Nations General Assembly. Resolution 1514 (XV), “Declaration on the Granting of Independence to Colonial Countries and Peoples.” 14 December 1960. UN Doc. A/4684.

United Nations General Assembly. Resolution 1803 (XVII), “Permanent Sovereignty over Natural Resources.” 14 December 1962. UN Doc. A/5217.

United Nations Security Council. Resolution 1483 (2003). 22 May 2003. UN Doc. S/RES/1483.

United Nations Security Council. Resolution 67 (1949). 28 January 1949. UN Doc. S/1234.

United Nations Treaty Collection. Status of Treaties, ch. III. https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=III-12.

Van der Eng, Pierre. “Marshall Aid as a Catalyst in the Decolonization of Indonesia, 1947–49.” Journal of Southeast Asian Studies 19, no. 2 (1988): 335–52.

Vienna Convention on Succession of States in respect of State Property, Archives and Debts. 8 April 1983. UN Doc. A/CONF.117/14. Not in force.

Vienna Convention on the Law of Treaties. 23 May 1969. 1155 UNTS 331.

Villiger, Mark E. Commentary on the 1969 Vienna Convention on the Law of Treaties. Leiden: Martinus Nijhoff, 2009.

Waibel, Michael. Sovereign Defaults before International Courts and Tribunals. Cambridge: Cambridge University Press, 2011.

Widodo, Hananto, Intan Lovisonnya, Fradhana Putra Disantara, Ruetaitip Chansrakaeo, and Uzodinma Yurriens Ezenduka. “Balancing National Constitutions and International Trade Commitments: Comparative Insights from Indonesia, Thailand, and India.” Lampung Journal of International Law 7, no. 2 (2026): 103–18. https://doi.org/10.25041/lajil.v7i2.4813.

Zaki, Muhammad Reza Syariffudin, Muhammad Haykal Armanto, Rafsi Azzam Hibatullah Albar, and Stefan Koos. “Safeguarding Sovereignty: Indonesia’s Solution to the Raw Materials Case in WTO.” Jurnal Hukum Internasional 20, no. 4 (2023): 1–22. https://doi.org/10.17304/ijil.vol20.4.5

DOI: https://doi.org/10.33756/eslaj.v8i2.41353