Legally unbound

Foreign banks have been on the sharp end of district court decisions in Jakarta this year annulling derivatives contracts they had struck with Indonesian exporters. The development raises questions about the sanctity of contract, the Indonesian judicial


It is estimated that as many as 50 derivatives contracts may be in dispute in Indonesia today, but seven stand out. Two involve the local institution Bank Danamon, which has found itself in litigation with PT Esa Kertas Nusantara, a paper manufacturer, and upstream oil and gas business PT Elnusa. The others all involve foreign financial institutions: HSBC has twice this year ended up in the South Jakarta District Court, once with PT Toba Surimi Industries and once with PT Fresh On Time Sea Food,

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