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PT Indo RX secures legal victory in German international arbitration proceeding
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Photo Caption: The PT Indo RX factory is seen in Tangerang, Banten
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T Indo RX, which is engaged in the footwear components industry, has won an international arbitration proceeding held in Ludwigshafen, Germany.
The legal process confirmed that the actions of Rhenoflex GmbH and its parent company, Coats Group Plc — including the unilateral termination of cooperation, suspension of raw material supply and the usurpation of Rhenoprint footwear component market rights in Indonesia — constituted clear violations of international law and business ethics.
Tama S. Langkun, the legal counsel for PT Indo RX, stated that the matter has gone beyond a mere contractual breach and now falls under unlawful conduct. If allowed to continue, he explained, the losses suffered by PT Indo RX would only escalate over time. The company was forced to cease operations, lay off almost its entire workforce and undergo an international legal battle.
“There is real light at the end of this dark tunnel. We have finally prevailed against a corporate giant operating across Indonesia, Germany, China and the United Kingdom,” Tama added.
“We call on Coats Group plc and Rhenoflex GmbH to respect international law, uphold ethical business practices and adhere to the principles of sound corporate governance,” Tama concluded.
Established in 2010, PT Indo RX specializes in the production of shoe components such as heel counters and toe boxes. It currently employs around 179 workers and has collaborated with international footwear brands.
On Jan. 11, 2024, Rhenoflex GmbH through its CEO Kumar Shirish Shah unilaterally declared the termination of its cooperation agreement with PT Indo RX. In response, PT Indo RX immediately submitted a formal objection through a letter dated Jan. 22, 2024.
Both parties agreed to resolve the dispute through international arbitration in Germany, with evidentiary and witness hearings scheduled for early September 2024 in Frankfurt.
However, before the arbitration process fully commenced, Rhenoflex GmbH and the Coats Group Footwear Division halted the supply of raw materials essential to PT Indo RX’s operations. This occurred despite PT Indo RX issuing stern warnings via email correspondence with Phillipe Chatillon, Head of Customer Service EMEA & Americas of Coats Footwear, between May 8 and 21, 2024.
PT Indo RX claimed that Rhenoflex and Coats Group attempted to undermine its business position by spreading misleading information that the partnership had been definitively terminated — despite the arbitration process still being underway.
It also claimed that starting in July 2024, Rhenoflex / Coats Group resumed production and distribution of footwear components to the Indonesian market from China, specifically through Dongguan Rhenoflex New Materials Co., Ltd in Guangdong Province.
PT Indo RX claimed the action was a violation of its exclusive rights, as the agreement constituted Rhenoflex selling Rhenoprint powder material to PT Indo RX, as opposed to selling Rhenoprint footwear components to IndoRX’s customers.
(This material has been issued by PT Indo RX as part of its public legal disclosure. The content reflects PT Indo RX's position following a final arbitration ruling).
