On July 14, 2025, the U.S. District Court for the Southern District of New York dismissed, with prejudice, PT Rahajasa Media Internet's attempt to enforce a $32.7 million Indonesian money judgment against the Republic of Indonesia and several ministries.
Judge Valerie Caproni held that the Foreign Sovereign Immunities Act (FSIA) shields Indonesia from suit in the United States, noting that the dispute, the contracts, and the alleged damages were all centered in Indonesia.
Background
In 2010, Rahajasa won five agreements to build and operate mobile internet access centers across Indonesia. Rahajasa completed the initial build-out, yet government officials froze payment pending parliamentary budget approval and later stated the contracts would not move forward.
Rahajasa brought the matter before BANI, the Indonesian National Board of Arbitration, obtaining a 2017 award of roughly US$17 million. The award was registered with the South Jakarta District Court, which, in 2022, issued an order that Rahajasa alleged constituted a money judgment. Accrued interest lifted the claim value to US$32.7 million.
In 2024, Rahajasa filed an action in the Southern District of New York seeking to recognize and enforce the Indonesian court order under New York's Uniform Foreign Country Money Judgments Act.
Sterlington represented Indonesia in the action. Partner Jesse Sherrett led the defense, persuading the court that:
- the arbitration clause contained no waiver of sovereign immunity;
- the alleged commercial activity had no "direct effect" in the United States; and
- none of the exceptions to sovereign immunity under the FSIA applied.
The Court's Analysis
Judge Caproni concluded that Rahajasa's claims fell outside the FSIA's commercial activity exception to sovereign immunity. The court emphasized that Rahajasa performed the contracts in Indonesia, the alleged breach occurred there, and the parties arbitrated before BANI in Jakarta. The alleged investment of project revenue in a New York bank account did not create the required "direct effect" in the United States. Citing the Second Circuit's 2010 decision in Swarna v. Al-Awadi, Caproni J stated that:
"Under the Foreign Sovereign Immunities Act ... foreign states are immune from district court jurisdiction, subject to certain exceptions that provide 'the sole basis for obtaining jurisdiction over a foreign state' in a United States court."
Finding no explicit or implicit waiver, the court dismissed the case and closed the docket. Following the court's dismissal, Jesse expressed his satisfaction with the court's thorough and well-reasoned decision:
"This outcome reaffirms a foundational principle of sovereign immunity and highlights the importance of rigorous analysis of the application of exceptions to immunity under the FSIA on the facts of each case. It was a privilege to represent the Republic of Indonesia and bring this matter to a successful conclusion."
Why the Decision Matters
Cross-border claimants often look to U.S. courts for foreign judgment and arbitral award enforcement. The ruling reinforces that U.S. jurisdiction ends where a foreign state's immunity remains intact. For clients facing sovereign-related disputes, early jurisdictional analysis can prove outcome-determinative and avoid protracted litigation.