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)