For those of you who are still unfamiliar with buying and selling through auctions or have never done so before, you may often wonder whether an auction can be canceled before or after it takes place. If so, what factors could cause an auction to be canceled?

The answer is yes, an auction can be canceled. However, this can only be done by an Auction Officer and only on the grounds specified in PMK No. 122 of 2023 regarding Auction Implementation Guidelines.

Before the auction begins, the grounds for cancellation include a request from the seller, a court order or ruling, or other reasons specified in the PMK—for example, if the auctioned item is under seizure or the original ownership documents cannot be presented.

Once the auction has begun, cancellation can only occur due to unresolvable technical issues, force majeure, or if the winning bidder’s bid deposit is accidentally refunded due to a banking system error.

Legal Basis for Auction Cancellation

The legal basis for auction cancellation is Minister of Finance Regulation (PMK) No. 122 of 2023 on Auction Implementation Guidelines. This PMK takes effect on January 1, 2024, and revokes PMK 213/PMK.06/2020.

The provisions regarding cancellation are set forth in Articles 44 through 48, while the consequences for participants are regulated in Article 50. (source: jdih.kemenkeu.go.id)

Reasons for Canceling an Auction Before It Begins

Cancellation before the auction begins refers to the cancellation of the planned auction. There are three basic categories: a request from the seller, a court order or ruling, and other reasons specified in the Minister of Finance Regulation.

Seller’s (Consignor’s) Request

The seller may submit a written request for cancellation, accompanied by a reason, through the auction application, before the auction begins.

The request must be received by the Auction Officer no later than the start of the auction and announced to participants during the auction. Cancellation at the seller’s request is subject to a cancellation fee.

There are several common grounds for cancellation, including a reserve price that falls short of expectations, a sudden need to reclaim the item, or an unsuitable auction schedule.

Court Order or Ruling

An auction is also canceled if a court, through an order or ruling, directs the postponement or cancellation of the auction. Such a ruling must be submitted in writing and received by the Auction Officer before the auction begins.

A common underlying situation is when the auctioned item is the subject of a lawsuit or dispute, such as a dispute over ownership or jointly held property.

Other Reasons in the Minister of Finance Regulation

The Auction Officer may cancel an auction for several reasons, such as:

• Status of the auctioned item: the item is subject to seizure as collateral, seizure for enforcement, criminal seizure, or criminal asset freeze
• Legality and documentation: the formal legal requirements for the auction subject and object are not met, or the seller is unable to submit or present the original ownership documents to the Auction Officer
• Compliance of the announcement: the auction announcement does not comply with regulations, the reserve price in the announcement differs from the reserve price determination letter, or the amount of the bid deposit does not comply with regulations
• Physical Possession: the seller does not physically possess the auctioned item, which is a tangible movable asset, such as a vehicle
• Force Majeure (force majeure): technical disruptions that cannot be resolved during an auction without the presence of participants, or force majeure or acts of God

Reasons for Auction Cancellation After the Auction Has Begun

Once the auction has begun, only the Auction Officer may cancel it, and only due to one of the following three conditions:

• Technical disruptions that cannot be resolved by the end of business hours on the day of the auction, in an auction conducted without the physical presence of participants
• Force majeure or acts of God, such as natural disasters.
• The winning bidder’s bid deposit is debited back from the auction organizer’s account due to specific reasons related to the banking system, and is not re-credited by the winning bidder on the day of the auction despite having been notified by the organizer.

How to Ensure an Auctioned Unit Avoids Cancellation?

For consignors:

• Ensure that all original documents are complete and available for inspection, that the unit is free from liens and disputes, and that it is in the consignor’s physical possession before consignment
• Set a price limit from the outset and ensure that the information in the auction announcement aligns with that limit

For bidders:

• Choose an auction house that is registered and supervised by the authorities, and review the unit information and inspection results before bidding.
• Prepare sufficient funds for the bid deposit and pay attention to the organizer’s notifications on auction day.

FAQs Regarding Factors That Can Cancel an Auction

Can an auction that has already begun still be canceled?

Yes, but only by the Auction Officer and only due to unresolvable technical issues, force majeure, or if the winning bidder’s bid deposit is accidentally refunded due to a banking system error.

Who can request the cancellation of an auction?

The seller (consignor) may request cancellation, and a court may order it through an order or judgment. The cancellation itself is carried out by the Auctioneer.

When must the consignor submit a cancellation request?

A written request stating the reasons must be received by the Auctioneer no later than before the auction begins. Auction houses may have additional internal policies, so it is best to submit the request as early as possible.

Are there any fees if the auction is canceled?

Cancellations at the seller’s request are subject to a cancellation fee. Generally, this fee does not apply to cancellations based on a court ruling or those carried out by the Auction Officer, with certain exceptions specified in the Minister of Finance Regulation (PMK).

Can auction participants claim compensation if the auction is canceled?

No. PMK 122/2023 states that participants cannot claim compensation due to an auction cancellation.

Is PMK 213/PMK.06/2020 still in effect?

No. That PMK was revoked by PMK 122/2023, which took effect on January 1, 2024. Auction applications for which a schedule was set before the new PMK took effect will still be processed under the old PMK.

Choose a Safe and Trusted Auction House

A recommended safe and trusted auction house is IBID, a business unit of PT Serasi Autoraya (SERA), which is also part of the Astra Group. IBID regularly holds auctions for automobiles, electronics, scrap, heavy equipment, gadgets, and lifestyle items.

IBID is registered with and supervised by the Directorate General of State Assets (DJKN) and is ISO 27001 and ISO 9001 certified. IBID has auction branches in 10 major cities across Indonesia.

To experience the ease of buying and selling used cars at IBID, try the process yourself via the website www.ibid.astra.co.id or the app available on the Play Store and App Store.

Currently, the categories of auction items at IBID are becoming increasingly diverse, including real estate. So, whether you’re a seller or a buyer, you can feel safer and more comfortable.

Don’t forget to follow IBID’s official Instagram account @ibid_balailelangserasi to get the latest auction updates and other helpful tips.