Court can't revoke SUEK-Dayaindo arbitration result

IDX-listed PT. Dayaindo Resources International Tbk (KARK) has recently denied attempt to revoke arbitration result concerning its dispute against Switzerland based SUEK AG. Panel of the judges declared that the Central Jakarta District Court has no authority to revoke the arbitration result.

Panel Chairman Marsudi Nainggolan stated that the court cannot revoke the London Court of International Arbitration (LCIA) arbitration result as Indonesia and England has ratified the 1958 New York Convention regarding Recognition and Enforcement of Foreign Arbitral Awards.

?The LCIA decision No 101655 is governed by the England Law and Central Jakarta District Court has no authority to adjudicate and or to revoke it,? he said quoted by Kontan.co.id

LCIA has on October 31 granted the exception filed by SUEK AG against Dayaindo, in which the decision requires Dayaindo to compensate SUEK AG with the amount of US$1.2 million.

Responding to the ruling, SUEK AG lawyer from Hadromi and Partners expressed his satisfaction and claimed that the decision was in accordance with the law. Dayaindo will have to consider whether to file an appeal or not. "We're giving it a further thought," Dayaindo lawyer Liston Sitorus said as he left the court room.

As previously reported, the case emerged as Indonesia Stock Exchange suspended stocks trading of Dayaindo as the coal company reportedly confronts a bankruptcy lawsuit. SUEK AG explained that the bankruptcy suit was filed after Dayaindo failed to cover debts of subsidiary PT Risna Karya Wardhana Mandiri, in which Dayaindo acts as guarantor.

Dayaindo claimed it has tried to resolve the dispute after Risna Karya failed to meet the agreement, but SUEK AG opted to bring the dispute to London Court of International Arbitration, accusing Dayaindo of breaching the contract. Dayaindo filed the motion to revoke the arbitration result on March 6, 2012. (*)