Fri, 05 Mar 1999

Justice Minister Muladi urges creditors to settle feuds locally

JAKARTA (JP): Minister of Justice Muladi advised Indonesian creditors on Thursday to respect the country's judicial system and settle disputes with debtors in domestic courts.

He told reporters disputes involving business deals concluded under Indonesian law should be settled under the country's judicial system and not foreign ones, the approach taken by Bank Bali in the Singapore high court.

"Judges here are obviously the ones who have mastered the Indonesian laws," Muladi said.

He believed litigation involving Bank Bali and Bambang Sutrisno should be moved back to the Indonesian court system.

Muladi was responding to a reporter's question about the tendency of Indonesian creditors to settle disputes with debtors through the Singapore judicial system, renowned for the integrity of its judges.

Several legislators attacked Bank Bali last week for its move in filing the civil lawsuit against Sutrisno, a former shareholder of defunct Bank Surya and PT Surya Supratama Finance, over a loan default.

House members labeled Bank Bali's behavior unpatriotic.

Bank Bali's Hong Kong unit, Bali International Finance Ltd., together with eight mostly Hong Kong subsidiaries of Indonesian financial institutions, lent US$16.5 million to the Jakarta-based Surya Supratama in August 1997. The loan was personally guaranteed by Sutrisno, the company's owner.

The creditors filed suit in Singapore against Sutrisno when the loan went sour last year. The Singapore high court granted an injunction to the nine creditors to freeze assets of Sutrisno in Singapore.

Bank Bali's lawyer Hotman Paris Hutapea defended his client's action, saying the island-state was Sutrisno's most recent domicile and where most of his assets are located.

Sudjono, the attorney representing Sutrisno and also the deputy chairman of the Indonesian Bar Association, argued the dispute should have been arbitrated in an Indonesian court, as required in the indemnity and guarantee agreement between Bali International and Sutrisno.

Sudjono also contended Sutrisno had sold his entire stake in Surya Supratama and thus the company's liabilities were the responsibility of the new owners.

Lawyers here said creditors would usually attempt to ascertain the location of most of the debtor's assets before deciding where to file suit.

Sudjono challenged Bank Bali to prove its claim that the bulk of Sutrisno's assets were in Singapore.