GOLD COAST: Billabong International is being sued by its former Indonesian licensee, CV Bali Balance (CVBB), over the termination of its distribution licence.
CCVB alleges, among other matters, that Billabong's termination of the licence in 2005 was not valid. It is suing Billabong in Denpasar District Court for US$153 million, including a claim for compensation of US$53 million for a specific loss which CVBB claims to have suffered from the alleged invalid termination. The civil suit also includes a claim from CCVB for US$100 million for “unspecified” damages arising out of the termination.
Billabong said in a statement it does not believe the civil claim will have any material adverse effect on its business or operations outside Indonesia or on the revenue, profitability or financial condition of the Billabong Group as a whole.
It added that it terminated the licence with CVBB based on a right of termination that was included in the agreement between the two companies. Billabong said CVBB signed a deed acknowledging the validity of the termination at the time it was enacted.
“Billabong believes on the basis of the legal advice it has received that there is absolutely no basis whatsoever for CVBB's civil claim,” Billabong said.
“In Billabong's view, the civil claim is simply tactical litigation in Indonesia to attempt to influence the settlement discussions which are ongoing between Billabong and CVBB.”
Billabong's current operations in Indonesia are managed by its wholly owned subsidiary, PT Billabong Indonesia. Billabong said its business in Indonesia represented approximately 0.7 per cent of the Group's global sales in 2008/09.