A TALE OF TWO BANIS – INDONESIAN SUPREME COURT'S LATEST RULING FINDS AGAINST THE CURRENT GOVERNING BOARD MEMBERS OF THE ORIGINAL BANI

Since 2016, the international community has followed the disputes involving BANI (Badan Arbitrase Nasional Indonesia), one of the oldest and most established arbitral institutions in Indonesia, and the more recently established BANI Pembaharuan ("BANI-P"). In fact, BANI-P's establishment, registration and use of the "BANI" name led to the commencement of multiple lawsuits by members of the respective institutions and in February 2018, we reported on the status of those proceedings which were in various stages of appeals.

Between 2018 and early 2019, two out of the three proceedings were finally concluded and decided in BANI's favour:

• the Supreme Court affirmed the decision of the lower courts to nullify the constitution and registration of BANI-P with the Ministry of Law and Human Rights;
• the Supreme Court affirmed the decision of the lower courts to uphold BANI's right to use the trademark "BANI" (thereby invalidating the legitimacy of the use of "BANI" by BANI-P in its name).

We have learnt that the Supreme Court recently rendered its decision on the last outstanding proceedings: a civil claim brought by the heirs of the original founding members of BANI, represented by a prominent lawyer and founding member of BANI-P (who is also the chair of its supervisory board) against the current governing board members of BANI ("BANI Board"), for amongst others, unlawful acts.

By way of background, the civil claim was brought in 2016 in the South Jakarta District Court. The court found against the BANI Board, and issued, amongst others, the following:

• a declaration that the BANI Board has committed an unlawful act;
• a declaration that the operation and management/administration of BANI by the BANI Board is unlawful and lacking in legal standing; and
• an order directing the BANI Board to transfer the assets (including funds and premises of BANI), powers, operation and management of BANI to the heirs of BANI's founding members.

As indicated by the online case registry of the Supreme Court, the Supreme Court had issued its decision on 29 October 2019, rejecting BANI Board's appeal and affirming the decision of the South Jakarta District Court. While the decision of the Supreme Court is final and binding, it is our understanding that BANI Board has announced that it has yet to receive the decision and will nonetheless file a civil review against it (this does not affect the finality of the Supreme Court's final decision which is technically immediately executable).

In a statement to the Indonesian press, the legal representative of the heirs of BANI's original founding members has indicated that any continued operation and management of BANI by the BANI Board is illegal and amounts to a breach of court order. It is not yet clear to us if BANI / BANI Board will cease accepting cases, or how ongoing cases will be administered once the Supreme Court's decision has been served and become final and binding on disputing parties. It is also not clear if BANI or BANI-P will cease to exist or operate following this decision.

This is a developing story and we are closely monitoring the situation. We will provide further update as soon as we are able to.

For further information, please contact Alastair Henderson, Narendra Adiyasa, or your usual contact at Herbert Smith Freehills and Hiswara Bunjamin & Tandjung.