IBRA loses another legal fight against defaulters

IBRA loses another legal fight against defaulters

JAKARTA (JP): The Supreme Court has rejected a bankruptcy
appeal filed by the Indonesian Bank Restructuring Agency (IBRA)
against palm oil producer PT Sumi Asih, marking another failure
in the agency's legal battles against debt defaulters.

Sustaining the Jakarta Commercial Court's late April ruling,
the Supreme Court ruled that IBRA should file the law suit at the
district court instead of at the bankruptcy court.

"Because the case requires a complicated proving process of
evidence, it should be filed at the district court, instead of
the bankruptcy court," the Supreme Court's ruling said.

IBRA has, so far, filed bankruptcy suits with the commercial
court against five uncooperative debtors but none of the cases
have been won by IBRA .

They are PT Tirtamas Comexindo, PT Westkalindo Pulp Papermill,
PT A Latief Corporation (out-of-court settlement), PT Ometraco
Corporation and PT Sumi Asih.

The Supreme Court ruling, dated June 8, was signed by a panel
of judges chaired by Supreme Justice Paulus E. Lotulung.

The ruling stressed that there were differing views between
IBRA and Sumi Asih on the amount of matured debts Sumi Asih owed
to IBRA, adding, "It is beyond the jurisdiction of the bankruptcy
court to make a ruling on this issue."

The Supreme Court ruling stated the resolution on the dispute
about the different views in the amount of debts would take a
complicated and timely process of evidence proving, which is not
within the jurisdiction of the bankruptcy court, which has a
limited time frame in deciding a case.

The 1998 Bankruptcy Law stipulates that the bankruptcy court
must decide a case within a period of not more than 30 days.

The law also stresses that the bankruptcy court, unlike a
district court, adopts the principle of simply proving the
evidence.

IBRA filed a bankruptcy suit against Sumi Asih at the Jakarta
Commercial Court in late March for not paying matured debts worth
Rp 25 billion and US$6.2 million.

Sumi Asih, however, disputed the accuracy of the amount of
unpaid debts, saying it should be much lower than the above
claimed.

The Jakarta Commercial Court accepted Sumi Asih's dispute and
rejected IBRA's bankruptcy suit in late April. IBRA then filed an
appeal with the Supreme Court.

IBRA's legal division head, Agustus Sani Nugroho, said earlier
that IBRA, like many other parties, had expressed great concerns
against "funny" verdicts made by the country's courts on
bankruptcy cases.

"The point is not that the creditor always has to win the
case, but legal certainty is at stake here," he said.

Bankruptcy lawyer Andrey Sitanggang said creditors often lost
a case due to an "X" factor, not a legal factor.

"Creditors are often frustrated by illogical ruling," Andrey
said.

In another case at the Jakarta Commercial Court, majority
creditors of publicly listed PT Anwar Sierad voted to approve the
debt restructuring proposed by the company, but with a few
conditions attached.

The debt restructuring agreement involved a debt to equity
swap and a 15-year tenor bond issuance.

Set as prerequisites to the debt restructuring agreement by
the creditors are the completion of a planned merger between
Anwar Sierad with its sister company, PT Sierad Produced.

The creditors also said the debt restructuring agreement would
be automatically canceled if Anwar Sierad's other sister
companies, namely, Sierad Produce and Sierad Grain (currently
filed for bankruptcy) were declared bankrupt.

Still another case at the commercial court is state owned PT
Dok & Perkapalan Kodja Bahari, which managed to survive a
bankruptcy threat for the fourth time on Wednesday, when the
Jakarta Commercial Court rejected a bankruptcy suit filed by its
foreign creditor.(udi)