The Hindu : Polaris ready to face bank's charge in Singapore court

Online edition of India's National Newspaper
Wednesday, Feb 26, 2003

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Business

Polaris ready to face bank's charge in Singapore court

By Our Special Correspondent

CHENNAI FEB. 25. The Chennai-based Polaris Software Lab has challenged Bank Artha Graha of Indonesia to file a defamation suit against it in Singapore.

In an elaborate statement released here today, Polaris gave a blow-by-blow account of its version of the events that led to the arrest of its Chairman, Arun Jain, and his colleague, Rajiv Malhotra, on December 13 in Jakarta. Polaris asserted that "the bank and its officers tried to use deplorable tactics to extort $10 million". As it failed, "they have now commenced arbitration proceedings," the statement added.

The Polaris's assertion comes in the wake of a reported statement made by the bank that the "articles in the local and international publications are misleading, inaccurate and damaging to the reputation of BAG". Polaris said it stood by the narration it had given to the media on the events of December 13 and challenged the bank to file defamation case against the company in Singapore. Though the bank had claimed that the sum was demanded as a form of `security', Polaris maintained that the original contract did not provide for any such demand by the bank.

Polaris, the bank had said, indicated that the banking software could be implemented and go live within four months of the commencement of work in January 2001.

The bank had also claimed that there was a delay in implementation and that Polaris had failed to carry out the system integration testing on July 6, 2002. Further, the bank had accused Polaris of delivering software with numerous bugs and errors.

The statement released by Polaris refused to answer these points as it was in the midst of arbitration proceedings. Though reluctant, the bank had reportedly agreed for the December 13 meeting with Mr. Jain and his team only because of persistent requests from Polaris. The Chennai firm, however, insisted that it was the bank that was bent on Mr. Jain visiting Jakarta and personally resolving the issue. "Polaris officials did not expect the meeting would turn out to be an attempt by the bank and its officials to extort $10 million by the bank by detaining and physically assaulting Polaris' officers," it said.

The bank had said that it had referred the conduct of Polaris under the agreements to the local police in Indonesia for further investigation by lodging a report.

"The police investigative procedures controlled events from that point on," the bank claimed. Polaris, nonetheless, maintained that the dispute was entirely commercial and civil in nature and that there was nothing criminal about its conduct.

Even as the arbitration proceedings are on, the spat between the two appears to be turning murkier. Observers wonder why Polaris should play a reactionary role in the entire controversy.

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