Chennai: Polaris Software chairman and managing director and chief executive officer Arun Jain and senior vice-president Rajiv Malhotra have been detained by the Indonesian police for the past three days over a commercial dispute that Polaris has with Bank Artha Graha, Jakarta.

The Polaris team had gone to Jakarta to resolve a dispute with the bank, supposedly a front organisation for the Indonesian military. The bank had earlier served a notice terminating its contract. After writing to Bank Artha Graha on 3 December 2002, the Polaris team left for Jakarta and met the officials on 13 December, on which day the bank detained them for long hours before getting them arrested.

Upset by the arrest over a commercial dispute, the Indian government has lodged a strong protest with the Indonesian government. The Indonesian ambassador has been summoned by the ministry of external affairs to convey India’s strong protest.

The Chennai-based company had signed an agreement with the Indonesian bank in June 2002 and August 2002, covering central processing, disaster recovery and branch server related work. The contract was supposed to be completed by July 2003.

According to Polaris officials, Bank Artha Graha served the notice of termination on Polaris on 27 November 2002. Polaris responded on 3 December 2002 stating that the grounds for termination were incorrect and offered to resolve the issue through discussions.

The bank had demanded an exorbitant amount as compensation though there is a specific provision in the agreement for an arbitration to settle any dispute. “We are deeply shocked and saddened at the turn of events,” says Polarish acting CEO Govind Singhal.