PT Rahajasa Media Internet v Telecommunication and Informatics Financing Provider and Management Centre, Directorate General of Post and Information Administration, Ministry of Communication and Information, Republic of Indonesia - United States District Court Southern District of New York Case No 1-20-cv-11035 - Petition to Confirm Foreign Arbitration Award - 20 December 2020
Country
Year
2020
Summary
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THE ARBITRATION AWARD
22. The parties both voluntarily participated in the BANI proceedings, with Respondent stating preferences for a specific arbiter, and answering Rahajasa's application. Respondent fully submitted to the arbitration process.
23. The tribunal rendered its decision on July 27, 2017, granting Rahajasa's applications and finding Respondent in default of all five of the relevant agreements; ordering:
(A) Respondent to pay Rahajasa, IDR 205,138,307,244, the equivalent, today, of $14,540,941.72, for implementing the KPU/USO internet service;
(B) Respondent to pay the interest charges and fines directly to PT Bank Pembangunan Daerah Jawa Barat ("Bank BJB"), the bank which financed the KPU/USO Program Internet Service Provision Agreement, totaling IDR 15,742,182,401, the equivalent, today, of $1,115,862.56;
(C) Respondent to pay Rahajasa the difference in value of the U.S. dollar exchange rate against the Indonesian Rupiah currency, on the financing of the KPU/USO Program Internet Service Provision, totaling IDR 4,785,479,783, the equivalent, today, of $ 339,212.03;
(D) Both Rahjasa and the Respondent to pay one half each of the costs of the BANI arbitration case administration; and
(E) Declaring that the Arbitration Award is final and binding against both parties. See Exhibit B.
24. In rendering its decision, the BANI arbitrators calculated a rate of interest equivalent to 16.88% against the Respondent, in determining the amounts owed by Respondent directly to the Bank BJB, for interest and penalties owed to Bank BJB, on Rahajasa's defaulted loan.
25. The BANI arbitrators also ordered, in accordance with Indonesian law and the BANI arbitration rules, that this Award must be registered, by the BANI clerk, at the South Jakarta District Court within the given time period. The Award was so registered on August 15, 2017, at the South Jakarta District Court, in accordance with the law, including Article 59 of the Indonesian Arbitration Law. The Respondent had 30 days from that registration day to make any attempts to annul it or otherwise appeal. The Respondent never did so. In September 2017, the Award became final and binding.
26. Respondent, however, did not proceed to voluntarily pay Rahajasa, in accordance with the Award. On March 26, 2018, Rahajasa Director Roy Rahajasa Yamin, made a formal application for an order of execution, on the Award, at the South Jakarta District Court. See Exhibit C. The court has never rendered a decision on that application. Mr. Yamin has made formal requests on the application, in the past year, with no success.
27. In 2019, Rahajasa was forced into an involuntary bankruptcy, by Bank BJB, due to Rahajasa's defaults on the KPU/USO Program Internet Service Provision loan agreement, which were a direct result of Respondent's failure to honor the underlying contractual agreements to pay Rahajasa. A receiver was appointed, on behalf of Bank BJB, to oversee various assets of Rahajasa, including two items of real property which had been offered as collateral in the relevant loan agreements. Rahajasa company accounts were frozen by the Indonesian bankruptcy court, which appointed a receiver to control Rahajasa's company assets. The collateral real property was seized from Rahajasa and sold at public auction. The receiver for Bank BJB is still in possession of Rahajasa company assets to cover the remaining debt. The Award is outside the scope of the receiver's possession and control.
28. The bankruptcy proceedings have created a very difficult situation for Rahajasa, making it impossible for the company to pursue enforcement of the Award outside of Indonesia, for over one year. Respondent has still refused to pay on the Award to Rahajasa. Rahajasa's application for an order of execution is still pending, since March 26, 2018. Rahajasa has made repeated inquiries with the court, regarding the status of its application for the order of execution, with no success. Rahajasa's financial status was destroyed by the Respondent's failure to pay on the Award, and the subsequent involuntary bankruptcy.
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