Indonesia will hold a court hearing on Tuesday into a billion-dollar dispute between Goldman Sachs and a local tycoon, who says the Wall Street giant's unit unlawfully sold shares he owned, in the latest test for the country's legal system.
Goldman took the unusual step of counter-suing the tycoon - Benny Tjokrosaputro - for reputational damage. The hearing on Tuesday will give the retail-to-property businessman a chance to rebuff Goldman's assertion.
The dispute comes at a time when Indonesia, Southeast Asia's largest economy, is embarking on its biggest drive for foreign investment in a decade. Legal experts say the outcome could give an indication on whether the country's civil court proceedings will protect the rights of foreigners.
Goldman's prospects at the hearing could be affected by a general lack of transparency in Indonesian court proceedings, said Bill Sullivan, senior foreign counsel at Indonesian law firm Christian Teo & Partners.
"This lack of transparency can result in very surprising decisions, especially when you have a foreign party seeking recovery from a well-resourced and well-connected local party," Sullivan told Reuters in an email.