The Indonesian entertainment industry was shocked to hear the news of Virgoun, an A-lister singer-songwriter in the country, divorcing his wife, Inara Rusli. The general public was especially surprised due to Rusli being the inspiration of his top hits, as what he mentioned publicly several times. However, Indonesian legal practitioners and academicians were specifically interested due to a totally different reason. This is because Rusli, in the lawsuit, demanded for Virgoun’s music royalties to be one of the assets to be shared between the then-spouses.
Indeed, this became a controversy. Royalty rights being an asset to be split during a divorce was unheard of in Indonesia, be it royalty from musical works or other kind of works protected by copyright. Hence, the news that Rusli won the rights upon a part of Virgoun’s royalty from some of his music was surprising.
As being stated in the decision of the Case 1622/PDT.G/2023/PA.JB, adjudicated in the Islamic Court of West Jakarta, Inara Rusli is given the right upon 50% of Virgoun’s royalty obtained from three songs: ‘Surat Cinta Untuk Starla’, ‘Bukti’, and ‘Selamat (Selamat Tinggal)’. With that being said, how does the Indonesian law view music royalties as a marital asset?
Copyright and Matrimony
There are two laws regulating Rusli’s partial right upon Virgoun’s music royalty, which are the Law No. 28 Year 2014 concerning Copyright (Law 28/2014) and the Law No. 1 Year 1974 concerning Marriage (Law 1/1974).
In Article 16 paragraph (1) of the Law No. 28 Year 2014, it is mentioned that “Copyright is a moveable intangible asset”, which signify that Copyright is transferrable. According to Article 16 paragraph (2), Copyright may be transferred or transferrable, partially or completely due to:
c. Waqf (benefaction)
e. Written agreements
f. Other causes deemed lawful according to applicable laws and regulations
The official elucidation of Article 16 paragraph (2) of the Law 28/2014 states that only the economic rights of a work can be transferred or transferable, while the Copyright itself shall remain being inseparable from the author of said work. The transfer of copyright should be conducted through vivid means of a written agreement, with or without a notary deed.
The transfer of complete or partial economic rights based on “other causes” referred to in Article 16 paragraph (2) letter (e) of the Law No. 28/2014 also includes transfers due to the dissolution of marriage. Regarding this, dissolution of marriage and marital assets are regulated under the Law 1/1974. According to Article 35 paragraph (1) of the law, assets obtained during a marriage shall be deemed as marital assets, in which both spouses are rightful owners to said assets. Therefore, as long as there are no agreement saying otherwise (pre-nuptial agreement), assets obtained through the work of the husband shall also belong to the wife, and vice versa.
Regulated by Islamic Laws
Article 37 paragraph (2) of the Law 1/1974 regulates that in the case of the dissolution of a marriage, marital assets shall be regulated according to “each couple’s laws”. In Indonesia, the marital laws applicable to each couple may be different, depending to their religion or choice of customary law (adat law/adat recht). In the context of this issue, the law regulating their marriage and divorce is the Islamic law, due to the fact that they registered their wedding in accordance to Islamic law and within the Islamic authority of registry. Usually, the dissolution of Islamic weddings in Indonesia are regulated by the Islamic Law Compilation (KHI). The KHI is a legal product in the form of a compilation of Islamic law taken from various sources, such as the Qur’an and fiqh. (KHI was first establish in 1991).
As reported by voi.id, Rusli’s attorney, Arjana Bagaskara, explained that their side demanded for Rusli’s rights upon Virgoun’s music royalty based on the provision in Article 91 of KHI. Accordingly, marital assets may be tangible or intangible, movable or immovable, or in the form of bonds and securities. According to the same article, intangible marital assets may be in the forms of rights or obligations.
In connection with the partial transfer of economic rights currently being discussed, it is to be recalled that as what have been previously mentioned, copyright (or economical rights, according to the elucidation of Article 16 paragraph (2) of the Law 28/2014) is a moveable and intangible asset. Hence, it is possible for the rights emerging from Virgoun’s works to be inserted into the list of marital assets which eventually became an object of assets segregation among the ex-spouses, as regulated in Article 91 of KHI.
Execution and Challenges
As what is commonly known, economical rights in the form of music royalty shall be paid to the author of a work for as long as the work is still within the timeframe to receive royalties. For the e-media kapanlagi.com, Rusli’s attorney made statements regarding their plan to demand for her royalty rights to the Collective Management Agency (LMK) collecting Virgoun’s music royalty. The payment and collection of musical works’ royalties is regulated under the Government Regulation No. 56 year 2021 (PP 56/2021) concerning the Management of Song and/or Music Copyright Royalties.
According to Article 12 paragraph (1) of PP 56/2021, the National Collective Management Agency (LMKN) conducts royalty collection from people utilizing musical works in public services commercially to be distributed to Authors, Copyright Holders, and Related Rights owners that are listed as members of an LMK. Article 14 explains that the royalties collected by the LMKN would then be distributed to Authors, Copyright Holders, and Related Rights Owners.
However, as of now, there is yet to be any legal instrument regulating the distribution of royalty to Related Rights holders that are not within an LMK or parties that are not involved in the creation of a musical work. In Article 15 paragraph (2) of PP 56/2021, if within a certain timeframe the Author, Copyright Holder, or Related Rights owner are unknown and/or yet to be a part of an LMK, the Royalty would then be used as a reserve fund for the institution.
We are in the view that, with the assumption that Rusli is yet to be a part of the LMK distributing Virgoun’s music royalty, there is no strong legal basis for Rusli’s side to demand for said rights from the LMK of concern, and therefore further mechanisms regarding the partial royalty transfer is unclear and may give rise to new legal issues in the future. The 50% portion determined within the divorce decision may also become problematic, seeing the absence of a legal instrument regulating royalty distributions to parties that are not a part the artist’s respective LMK.
Aside from that, the partial rights to Virgoun’s music royalty may vanish if he decides that the copyrights or economic rights of his works shall be transferred completely to a third party. With said action, Virgoun may lose his rights to royalty at all, and therefore Rusli’s loss of rights to said income would follow. This is because the decision issued by the West Jakarta Islamic Court does not adjudicate the new form emerging from Virgoun’s transfer of copyright.
However, it is also to be noted that in this digital era, there is yet to be a legal instrument regulating the management of digital music royalty by LMKN or LMK. This means that there is no legal instrument hindering the partial transfer of royalty to an ex-spouse. With the categorization of music royalties as a marital asset, the execution of rights to said royalties should follow regulations regarding the general execution of divorce decisions.
Similar Foreign Cases
Although this case is a precedent in Indonesia, several countries had previously experienced the adjudication of royalty as a marital asset. For instance, New Zealand. In the known case of Palmer v. Alalaakkola, an ex-wife had to share the copyright to her artworks that were painted within her marriage will Palmer.
In its first level of proceedings, as adjudicated by the Family Court, it was determined that the paintings created were marital assets. However, the court also determined that the copyrights to said artworks shall be held by Alalaakkola, because said works emerged from her hard works and skills. However, in the High Court decision, it is determined that the copyrights do not exclusively belong to Alalaakkola. In the Property (Relationships) Act 1976 applicable in New Zealand, copyright is regulated as a proprietary right, and therefore shall be treated similarly to other proprietary rights, such as fishing rights. The Copyright Act 1994 applicable in the country also never identifies that a copyright should receive treatments that are distinguishable from other types of marital assets.
Music royalties as marital asset is a new phenomenon in Indonesia. In fact, as reported by the media, Virgoun’s case is the first in Indonesia where an author has to share their music revenues with an ex-spouse.
It may seem like a positive development within Indonesia’s legal discourse. However, this development should also be followed with comprehensive regulations regarding related rights as a marital asset. With the absence of law instruments, we are in the view that Rusli still has a long and challenging path to obtain her rights upon Virgoun’s music revenue.