PT BAT sued for terminating contract

PT BAT sued for terminating contract

JAKARTA (JP): A cigarette distributor has demanded that PT BAT
Indonesia pay it Rp 21 billion (US$9.2 million) in damages for
abruptly terminating their contract.

The distributor, FA Indonesia Jaya, through its lawyer
Sudirman Munir, is now seeking help at the Central Jakarta
District Court to deal with its dispute against PT British
American Tobacco Manufactures - Indonesia Ltd. (PT BAT
Indonesia).

Lawyer Munir told the court yesterday that the plaintiff is
seeking Rp 21 billion in damages for the financial loss his
client has suffered since August 1995.

The amount was for the loss of profit and service fees the
plaintiff has suffered, workers' salaries and severance pay and
immaterial losses, the lawyer said.

FA Indonesia Jaya said it had licenses for the distribution of
several cigarette brands produced by PT BAT Indonesia, such as
Ardath, Benson Hedges, Commodore, Escort, Kent, Lucky Strike and
555 since 1967 in Jakarta, Bogor, Tangerang, Bekasi, Karawang,
Cikampek, Purwakarta, Serang and Merak.

There were other distributors of PT BAT products at that time.

On Jan. 1, 1995, Munir said, PT BAT Indonesia and FA Indonesia
Jaya signed an agreement appointing FA Indonesia as the sole
distributor of its products until December 1996.

PT BAT Indonesia stopped supplying its products to FA
Indonesia Jaya in August 1995 without clear reasons. PT BAT
Indonesia chose another company, PT Wicaksana Overseas
International, as its sole distributor instead.

Munir said that the producer then halted the distribution deal
with his client on Oct. 23, 1995.

FA Indonesia suffered more than Rp 21 billion in financial
losses after the agreement was terminated, Munir added.

Presiding judge I.G. Ketut Sukarta suggested yesterday that an
out-of-court settlement be reached by both parties.

The trial was adjourned until Feb. 1 to hear PT BAT
Indonesia's defense.(29)