Name : Ainna Khairunnisa

Student ID : 1703101010279
Subject : International Investment Law
Task : Case Summary
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Rafat V. Indonesia

Araised out on 5 April 2011, ISDS lawsuit by Ravat Ali Rizvi (the British citizen) was
motivated by the Government's decision in the Century Bank bailout. The Government's
current policy of bailout and take over Century Bank to avoid the systemic and monetary
crisis Rizvi has been detrimental as the controlling shareholder in the Bank.

Ravat argued the government had violated the provisions of a bilateral investment agreement
between Indonesia and Britain (BIT) in saving Century Bank and demanded that the
government pay compensation of US $ 75 million.

Prior to the case submission, Rafat Ali Rizvi was arrested by the Indonesian National Police
for stealing assets from Century Bank, after the bank was rescued by the government from
bankruptcy in 2008. He committed corruption and money laundering. Rizvi was the greatest
investor of the bank, along with Hesham al Warraq, a Saudi citizen and Robert Tantular, a
local Indonesian businessman. Robert Tantular has been sentenced to prison for 5 years,
while Rafat Ali Rizvi was sentenced to prison for 15 years as a convict in case no. 339 /
PID.B / 2010 / PN.JKT.PST who was tried in absentia, whose decision has been submitted as
a substitute for permanent law.

However Rafat filed an arbitration suit against the Indonesian government through the
International Center for Investment Dispute Settlement (ICSID), on April 5, 2011 registered
by registering number ARB / 11/13.

Two reasons for the filing of this lawsuit. First, because of investment problems, where Rafat
felt disadvantaged over the disbursement of Century Bank's bailout funds of Rp 6.7 trillion at
the time. The second reason, Rafat returned the Central Jakarta court ruling that sentenced
him to 15 years in prison in an inententia manner, had been denied Human Rights. In his
lawsuit, Rafat, who positioned himself as the biggest shareholder of Century Bank, agreed
that the Government of the Republic of Indonesia had opposed bilateral investment
agreements between Indonesia and the United Kingdom (BIT) in saving Century Bank and
asked the Government of Indonesia to seek compensation in the amount of 75 million dollars.
However, ICSID actually cannot ask permission to break Rafat Ali Rizvi's lawsuit because:

The ICSID Convention can only approve ICSID arbitrations to allow disputes between
investors and countries relating to investments made in that country.

BITs made based on lawsuits require investment to obtain permits under the Act. 1 of 1967
(UU PMA) of the successor regulations.

Rafat Ali Rizvi's investment did not meet the requirements to obtain a BIT license, including
the right to request an arbitration lawsuit, because his investment in Indonesia did not obtain
a permit in accordance with the provisions of the Foreign Investment Law in force in
Indonesia, as well as regulating payments in the BIT.

On July 16, 2013, the ICSID Arbitration Council issued a ruling on the jurisdiction of the
Arbitrator Council and ICSID to examine and try the case of Rafat Ali Rizvi against the
Government of the Republic of Indonesia with a ruling:

1. Accepting the exception of the GOI's jurisdiction, Rafat Ali Rizvi's investment did not get
permission from the PMA Law, was approved by BIT and the investment did not get a BIT
permit between RI and the United Kingdom.

2. Reject Rafat Ali Rizvi's argument that uses the nation's most favored article to get BIT
protection. It states ICSID and the Assembly does not have jurisdiction for cases.

With this decision, the Government of Indonesia won the case. Therefore, Rafat Ali Rizvi
cannot sue the Indonesian Government in the ICSID arbitration forum related to saving
Century Bank. ICSID then won Indonesia and assumed that the investment made by Rizvi
was not in accordance with the provisions in the RI-English P4M.