Polaris to return $1,000,000 to bank

MUMBAI: Polaris Software Lab Ltd. has informed BSE that it was appointed in 2001 by PT Bank Artha Graha (BAG) to license, customize and implement the BankNow system for BAG. The appointment was subsequently formalized in various agreements including a Letter of Intent dated January 31, 2004, a Memorandum of Understanding dated November 20, 2001, a license agreement dated June 12, 2002 and an implementation agreement dated August 2, 2004. The Agreements were for various reasons, not successfully implemented.

Following the termination of the license and implementation agreements by BAG on November 27, 2002, police complaints were filed against Polaris and BAG in Jakarta. BAG commenced arbitration proceedings against Polaris in Singapore on January 23, 2004 under the SIAC Rules. Polaris brought counter-claim against BAG in the arbitration proceedings. Both BAG and Polaris have agreed to settle all their differences and/or disputes arising from or in connection with the agreements, as well as the arbitration proceedings.

Polaris has agreed to make full restitution to BAG in the sum of $1,000,000 received under the agreement. And BAG has agreed to return to Polaris all software provided by Polaris to BAG under the agreements, without admission of liability by either party and in full and final settlement of all disputes between parties and/or their respective officials.

As a consequence of the settlement, both parties will seek to have the aforesaid police complaints withdrawn.