Fri, 16 Jun 2000

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)