British agro-group cries foul over court ruling
British agro-group cries foul over court ruling
Deutsche Presse-Agentur Jakarta
In what has been hailed as yet another blow to foreign investor confidence in Indonesia's judicial system, a British agro-group has appealed a court ruling that deprived it of a US$3 million- plantation, executives said on Tuesday.
A senior executive of Rowe Evans, which runs 33,500 hectares of rubber and palm oil plantations, employs 6,000 Indonesians and boasts total investments worth US$80 million in the country, has expressed "astonishment" over a recent Medan District Court ruling that annulled its $2.3 million purchase of a plantation in North Sumatra from a local politician named Rahmat Shah.
The court ruled that Rowe Evans should return shares in the plantation and its management back to Shah, overturning a contract signed between the buyer and seller in March, 2002.
Shah was not ordered to immediately return the money to Rowe Evans, the company's lawyer added.
"We were astonished and shocked and very concerned by the judgment that was handed down by the district court in Medan," said Philip Fletcher, executive chairman of Rowe Evans Investments Plc., which has been operating in Indonesia for the past 100 years.
"There is no legal basis to overturn this agreement and we are seeking the protection of the Indonesian legal system. We will be rigorously appealing against this decision, and seeking the assistance of the Indonesian government," Fletcher told a press conference.
The Medan court case follows fast of the heels of other dubious court rulings by Indonesia's judicial system, deemed one for the world's most corrupt.
Recent cases that have raised eyebrows include a bankruptcy ruling against Prudential Assurance, the local affiliate of a British insurance group, and the annulment of a bond agreement between Indonesian petrochemical company Tri Polyta and its mostly foreign creditors.
Indonesia has suffered a net outflow of foreign investment since 1997, when the Asian financial crisis hit the region, but from which other countries have by now recovered.
"The rule of law is the number one issue as far as the foreign business community is concerned and it has been for some time. Until these sorts of problems can be fixed then I'm afraid investment will continue to be slow to this country," said Gary Andrews, executive director of British Chamber of Commerce.