JAKARTA (Indonesia Today) ??? Legal battle between PT Dayaindo Resources International (KARK) and Switzerland???s company SUEK AG should proceed through the court process as the mediation between them failed to reach an amicable settlement.
Mediation judge discontinued the reconciliation process after the disputing parties failed to reach settlement in the 40-day mediation period which ended on Tuesday (Sep 18). With the failed mediation, the judge proceeds the dispute to the merits of the case.
Liston Sitorus, lawyer of Dayaindo, insisted with that his client will obey London Court of International Arbitration (LCIA) with paying the US$1.19 million obligation, as long as SUEK willing to continue the Contract for Sale and Purchase of Steam Coal agreement.
In the trial, SUEK stated its objection on absolute competence. According to SUEK, Central Jakarta District Court has no authority to overrule the arbitration result, since it should be decided in state court where the arbitration proceeds based on the New York Convention.
The case emerged as Indonesia Stock Exchange (IDX) suspended stocks trading of PT Dayaindo Resources International (KARK) two weeks ago. The action was taken as the coal company reportedly confronts a bankruptcy lawsuit.
Lawyer of SUEK AG explained that the bankruptcy suit was filed after Dayaindo failed to cover debts of PT Risna Karya Wardhana Mandiri, its subsidiary. Dayaindo, whereas, in the agreement, acts as guarantor of Risna Karya.
Responding to the bankruptcy lawsuit, Dayaindo claimed it has tried to resolve the dispute after Risna Karya failed to meet the agreement. SUEK AG, however, brought the dispute to London Court of International Arbitration and accused Dayaindo of committing breach of contract. The arbitration result requires Dayaindo to compensate SUEK AG amounting US$1.2 million.
The breach of contract report to the arbitration board, according to Dayaindo, is an explanation containing deception against its company. The arbitration result, therefore, should be void by law. Dayaindo has filed the motion to revoke the arbitration result to the Central JAKARTA District Court on March 6th, 2012. (indra@theindonesiatoday.com)