Indonesian Supreme Court Rejects Telkomsel Bankruptcy Ruling

Jakarta Globe

The Supreme Court rejected a ruling declaring Indonesia’s biggest cell phone operator Telkomsel bankrupt on Thursday, overturning a controversial decision stemming from Rp 5.3 billion ($555,000) in unpaid debt.

The telecommunications firm, owned by Telekomunikasi Indonesia, filed an appeal with the Supreme Court after the company was declared bankrupt by the Jakarta Commercial Court on Sept. 14. The commercial court issued the ruling after finding Telkomsel guilty of failing to pay a debt obligation to plaintiff Prima Jaya Informatika.

The Supreme Court rejected the ruling on Thursday, siding with Telkomsel, according to Supreme Court spokesman Ridwan Mansyur.

Prima Jaya’s attorney told Detik.com that they planned to review the ruling.

“We haven’t received the ruling,” lawyer Kanta Cahya said. “We will study the consideration of the Supreme Court.”

Prima Jaya may ask for further review, Kanta said.

Telkomsel entered an agreement on June 1, 2011 to provide 120 million vouchers and 10 million SIM cards with a special sports theme to Prima Jaya.

Prima Jaya only managed to sell 524,000 of them.

In May, Telkomsel approved the purchasing order of more vouchers from Prima Jaya, but the former has yet to see any payment. Prima again placed a purchasing order in June, which was then rejected by Telkomsel on the grounds that the distributor had not fulfilled its obligation from the previous order.

Telkomsel proceeded to terminate the contract, a move Prima claimed was unilateral, and countered by filing a bankruptcy lawsuit, estimating a total loss of Rp 200 billion due to the termination.

BeritaSatu/JG