Billabong sued by Indonesian distributor for $168 million

Surfwear retail giant Billabong has been sued by its former Bali-based distributor seeking $168 million in damages regarding the cancellation of its licence in 2005.

The incident is just the latest in a string of battles for the Gold Coast-based company in Indonesia.

CV Bali Balance, which is owned by Australian entrepreneur Suzi Burke Suwenda, has lodged a claim in a Bali court for $168 million in damages after Billabong cancelled its license.

Billabong awarded the licence in the early 1990s, giving it to surfing veteran Wayan Suwenda. While he worked closely with Billabong over the following decade, the cancellation of the distribution license following his death in 2005 has become the main point of contention.

While Billabong says it purchased all licensees and aimed to distribute product themselves, Suwenda has said she only agreed to this plan “under duress”. CVBB has even taken out advertisements in Bali to promote its view, and has taken legal action against the company before.

The claim is the latest in a string of legal wrangles for Billabong in Indonesia.

In December last year a Denpasar court found former Billabong Indonesia sales and marketing manager Wayan Suanda guilty of embezzling company materials after he was found to have violated a ban on using materials belonging to CVBB after the license was terminated in 2005. Suanda is appealing the decision.

In a statement yesterday, Billabong said the company could not have recorded damages anywhere near the legal claim alleges, and that CVBB only had three years remaining its original license agreement.

“It is not possible that CVBB could have incurred any loss remotely like what it now claims, even if the termination was invalid, which Billabong denies,” said the company.

“Billabong believes, on the basis of the legal advice it has received, that there is absolutely no basis whatsoever for CVBB’s civil claim.

“In Billabong’s view, the civil claim is simply a tactical litigation in Indonesia to attempt to influence the settlement discussions which are ongoing between Billabong and CVBB.”

The company also said any consequences from the judgement would have no impact on its global operations. Its Indonesian business accounted for less than 1% of the company’s global sales total in 2008-09.