Legal battle over Adaro coal mine enters new phase

The long-running Adaro coal mine saga, which involves business tycoon Sukanto Tanoto, tycoon Edwin Soeryadjaya and Germany?s Deutsche Bank, has entered a crucial stage with Sukanto?s side claiming they are close to winning the ?war? following a recent Supreme Court decision, The Jakarta Post reported on Friday.

The claim, however, was quickly dismissed by a lawyer for the bank.

?We are very encouraged by the Supreme Court?s ruling,? said Todung Mulya Lubis, a lawyer for Sukanto?s Singapore-based vehicle, Beckkett Pte Ltd, recently.

Todung said the decision made the defeat of his client?s two adversaries imminent including in the ongoing lawsuit against them in Singapore?s High Court.

The bank?s lawyer, Amir Syamsuddin, however insisted to The Jakarta Post on Wednesday evening that the Supreme Court?s judgment did not have any legal implications for his client, although the opposition seemed to be convinced that it greatly strengthened their hand.

The Supreme Court in its decision of March 3, which was signed by the court?s junior chief justice for civil cases, Harifin Tumpa, upheld the earlier decision of the Jakarta High Court, which overturned 16 orders issued by the South Jakarta District Court on the sale of coal miner PT Adaro Indonesia and coal handler PT Indonesia Bulk Terminal to Edwin?s company.

Indirectly, Beckkett is the major shareholder of Adaro. Deutsche Bank provided a US$100 million loan to the coal mining firm with Adaro itself serving as the collateral. After Adaro?s failure to repay the loan, the bank then sold Adaro to Edwin?s company in February 2002 for $46 million.

At the request of the bank, the district court in December 2001 and February 2002, issued a total of 16 orders endorsing the sale of the two companies to PT Dianlia Setyamukti (DSM), which is owned by Edwin. Beckett challenged the decision in the High Court. The bank then appealed to the Supreme Court after the High Court overturned the 16 orders in February 2005.

?The High Court was not misdirected in law in over turning the aforesaid decision of the South Jakarta District Court,? Justice Harifin said in Supreme Court?s judgment.

The judgment also contained a ruling that the parties prejudiced by the South Jakarta District Court?s decision could bring claims against the relevant parties.

Todung said his clients reserved the right to bring further legal action. Edwin?s lead attorney, Adnan Buyung Nasution, could not be reached for comment on Thursday. (*)