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.