Court insists on hearing Guthrie contract dispute

Dadan Wijaksana, The Jakarta Post, Jakarta

The South Jakarta District Court has rejected claims made by Kumpulan Guthrie Berhad that the trial against the Malaysian company over a disputed contract, cannot be held in Indonesia, a Court official has said.

"Via its provisional ruling, the court on Monday ruled that the trial case involving Guthrie and PT Adiyasa Saranamas is within its jurisdiction.

"Therefore, it does have the authority to proceed with the case," Ricar Soroindah, a court official told The Jakarta Post on Wednesday.

He added that the trial will continue on Oct. 12.

Guthrie earlier argued since it was a Malaysian-based company, any trial against it should be staged in a Malaysian court.

Adhiyasa has filed a law suit against Guthrie for an alleged breach of contract.

The former claimed that the later had used its financial and investment service in acquiring 25 oil palm plantation companies from the Indonesian government last year, via the Indonesian Bank Restructuring Agency (IBRA).

Trial documents, which were made available to the Post, showed that the two companies had reached an agreement, under which Guthrie would have to pay an agreed amount of money as a consultancy fee to Adhiayasa.

However, according to Adhiyasa, Guthrie has repeatedly refused to fulfill its duty, which has forced the former to file a law suit against Guthrie at the South Jakarta District Court.

It all started in November 2000 when Guthrie won a tender to acquire the 25 plantation companies, which covers an area of no less than 260,000 hectares in Sumatra, Kalimantan and Sulawesi.

The tender deal cost the Malaysian palm oil giant US$350 million.

The companies were formerly owned by the once powerful conglomerate Salim Group, who had to surrender its various assets to repay its huge debts to the government in the aftermath of the devastating financial crisis throughout the region.