Garuda Indonesia sues Rolls Royce for $43m

ASEAN+ September 19, 2018 01:00

By THE JAKARTA POST
ASIA NEWS NETWORK
JAKARTA

INDONESIA’S flag carrier Garuda Indonesia has filed a lawsuit against Rolls Royce Plc and Rolls Royce Total Care Service Limited for 640.94 billion rupiah (US$42.95 million) for alleged fraud concerning an agreement signed when Emirsyah Satar, who was later named a corruption suspect, was president director of the company.



The lawsuit was submitted to the Central Jakarta District Court on September 13, said Garuda Indonesia lawyer Ery Hertiawan in Jakarta on Monday.

“The agreement titled: TotalCareTM Agreement for the Trent 700 Engine Powered Airbus A330-300 Aircraft (Contract Reference: DEG 5496) No: DS/PERJ/DE-3236/2008 is null and void because of the fraud,” Ery stated in the lawsuit document, as reported by kontan.co.id.

The first hearing of the case is scheduled to be held today.

Garuda’s vice president of corporate communication Hengki Heriandono was not available for comment, as he said he was still in a meeting. From Garuda Indonesia’s financial report, it was known that the agreement had been amended several times. Amendments for tariff adjustments were made in 2012 and 2016, while a contract extension was made in 2015 until September 2017. 

On December 22, 2017, Garuda received an offer for a contract extension, but there has been no agreement up to date.

Emirsyah was named a graft suspect by the Corruption Eradication Commission (KPK) for allegedly receiving bribes allegedly to help smooth the procurement process of Airbus engines produced by Rolls Royce from 2005 to 2014.