Central Jakarta Religious Court Decision No. 1182 of 2014: Sale and Labelling of Non-Halal and Shari'a-compliant Products

The plaintiff submitted that, since November 2012, it had worked with the first defendant in a gold investment joint-venture, the plaintiff as the investor and the first defendant as the funds manager. As the investor, the plaintiff maintained it was entitled to claim interest and capital returns. Moreover, that had the first defendant been punctual in providing the plaintiff its investment returns, the plaintiff could have invested those monies in the property market since 2013, thereby yielding a 20 per cent return (IDR 226,008,700) per annum. The plaintiff based other similar claims on other invoices to which it believed it was entitled to the resulting interest.

The third defendant was the Shari’a Supervisory Council (Dewan Pengawas Syariah) and acted as the halal certification body. It was also a share-holder in the first defendant, and worked with the first defendant. It had provided the first defendant with MUI (Majelis Ulama Indonesia) halal logos, which were placed on invoices between the plaintiff and first defendant. In an email to the fourth defendant, the third defendant had conceded that it had provided halal and shari’a labels to the first defendant, whereas the first defendant had already sold intangible investment products that were not halal and shari’a-compliant. While it knew about this, the third defendant continued to provide the first defendant with halal and shari’a labels. The fourth defendant, other than being the Economic and Halal Product Chair, and Chair of Yayasan Dana Dakwah Pembangunan (Proselytisation Funds Foundation), was the primary financial stake holder of the first defendant, as well as its accountant, and had already been negligent in managing its finances, resulting in a financial irregularity. The fifth defendant, as a 10 per cent shareholder, the plaintiff alleged, should also be held responsible for financial mismanagement because it received a 10 per cent profit from the first defendant annually.

The second defendant had transferred IDR 1 billion to the fifth defendant as a 'donation', establishing its involvement in the first defendant’s default, the plaintiff claimed. The plaintiff also asserted that the second defendant had spent approximately IDR 56 billion on the former management, not on customers or any new developments. As a result, the plaintiff lodged three warning notices with the first respondent to pay its financial obligations resulting from the invoices. The plaintiff alleged that the first and second respondents did not heed its warnings and, in bad faith, attempted to avoid their financial obligations vis-à-vis the plaintiff.

The plaintiff sought IDR 1,130,043,500 in actual damages, and a 4.5 per cent late fee per month, totalling IDR 50,851,957, calculated from March 2013. In compensatory damages, it sought IDR 10 billion. The court found, however, that as the plaintiff had failed to properly identify the first defendant, its claim had to fail.

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