Roche protests court's sequestration ruling

JAKARTA (JP): Drug company PT Roche Indonesia, an affiliate of Swiss firm Roche, protested on Wednesday the South Jakarta District Court's decision to sequester its assets at the request of drug distributor PT Perusahaan Dagang Tempo in a distribution rights dispute.

Roche's lawyer Todung Mulya Lubis said the sequestration ruling was illegitimate as the district court did not have the right to examine the dispute, given the fact that both parties had agreed to settle any dispute through arbitration.

"The district court is incompetent to try a dispute of parties bound in an arbitration agreement," Lubis said in a press conference, quoting Law No. 30/1999 on arbitration and alternative dispute settlement.

Lubis said the decision could kill whatever litte confidence foreign investors still had in Indonesia, which is anxiously seeking to woo back investors to the country.

The court decision, Lubis added, indicated "how uncertain and weak is our legal system, a factor which has forced most foreign investors to remain on the sideline despite the election of a legitimate government in Indonesia."

Tempo filed a suit against Roche at the South Jakarta District Court last October for annulling the contract that appointed the former as a distributor of Roche's generic and over-the-counter (OTC) drug products on the domestic market.

Generic and OTC products are drugs that can be consumed without a doctor's prescriptions.

Roche reportedly did not "give reasons" for annulling the contract, which, Roche said, was something allowed for in the contract.

Lubis asserted that the court should have turned down the lawsuit right from the outset because Roche and Tempo clearly stipulated in their distribution agreement that any dispute arising among them which cannot not be settled amicably shall be finally settled by arbitration to be conducted in English language to be held in Jakarta under the Rules of Arbitration of the Indonesian National Board of Arbitration (BANI).

Tempo asked the court to sequester Roche's assets, including its land and factory in Cimanggis, Bogor; its machines and all manufacturing equipment on the land and in the factory; as well as spare parts and half-finished and finished goods there.

Lubis said the court issued the so-called conservatoir beslag (sequestration ruling) on Oct. 26 without giving the chance for his client to defend itself in the first hearing of the case on Nov. 4.

"This is contrary to the principle of procedural law, namely audi ad alteram partem (listen to the other party)," Lubis said.

"The district court is obligated to reject and shall not interfere in any dispute settlement which has been determined through arbitration, except for certain matters determined by the law," Lubis quoted the arbitration law of 1999.

Swiss ambassador Gerard Fonjallaz who accompanied Lubis at the news conference said he had sent a letter to President Abdurrahman Wahid on Wednesday regarding the issue. (01/jsk)