Polaris Software Lab Ltd and Bank Artha Graha of Indonesia have agreed to settle all their disputes, with the Indian software company agreeing to make full restitution to the bank for a sum of $1 million.
Polaris, on Monday, informed the Bombay Stock Exchange that BAG has agreed to return all software provided by Polaris without admission of liability by either party, and in full and final settlement of all disputes between parties and/or their respective officials.
This marks the close of a long drawn controversy, the highlight of which was the arrest of Arun Jain, chief executive officer, Polaris in Jakarta by the Indonesian Police on December 13 when he had visited that country to settle the commercial breach of contract with BAG.
Polaris had signed pacts with BAG in June 2002 and August 2002 for central processing, disaster recovery and branch server related work. The contract was scheduled to be completed by July 2003.
However, BAG served notice of termination on Polaris Software on November 27, 2002. Polaris responded to this on December 03, 2002 stating that the grounds for termination were incorrect and offered to resolve the issue through discussion.
Polaris had offered to pay BAG $.6 million, which it had received for the deal. The proposal was, however, turned down by BAG and they asked Polaris to pay $10 million.
When Polaris declined, BAG commenced arbitration against it in Singapore on January 23, 2004 under the Singapore International Arbitration Centre rules. Polaris brought counter-claim against BAG in the arbitration proceedings.
BAG is a private bank run by Army Foundation of Indonesia, which holds 30 per cent stake.
