The Supreme Court Tuesday refused to hear an appeal from a longshore workers' pension fund seeking to recover a $1.3 million judgment from an Indonesian shipping company that once served New York.
The company, P.T. Djakarta Lloyd, was owned by the Indonesian government and party to labor agreements between the New York Shipping Association and the International Longshoremen's Association.When Djakarta stopped operating in New York in 1985, it failed to make payments on unvested pension benefits owed to the trust fund.
In 1990, the fund won a judgment of more than $1.3 million against Djakarta, but it was unable to collect the money. The fund then tried to collect the money from five companies owned by the Indonesian government and operating in the United States.
But a federal appeals court said the pension fund could not collect from those companies, citing the Foreign Sovereign Immunities Act, which entitles a foreign state to immunity unless it falls into certain statutory exceptions.
The pension fund then appealed to the Supreme Court. It said the Djakarta case could set a precedent that would allow more than 30 state-controlled carriers serving U.S. trades to renege on their pension benefits.
"Indonesia and other foreign governments can now withdraw from multiemployer pension plans with impunity, knowing full well that the unfunded benefits they leave behind will not be enforceable against their other commercial enterprises in the United States," its lawyers said.
But the Supreme Court, without comment, allowed the appeals court decision to stand.